124
|
SUMMER
2016
MARKET
watch
ESCARPMENT
®
real estate
Theonlyconstant ischange.
I have said it before (in
this forum Ibelieve)and Iam sure Iwill say it again. Inmost cases, Iam
talkingabout changes in technology,orchanges inconsumerpractices
orchanges in themarket. In thiscase, I’ll talkabout changes in theway
consumers receive information.
Real estate isa favourite topic fornewsmedia thesedays. Explosive
growth inplaces likeVancouverandToronto seem tobe in thenewsal-
mostdaily. This,ofcourse, ISbignews. People’sbiggest investmentap-
preciatingat seemingly dizzying rates inVancouver and the ensuing
lackof affordability.
Whatmayhavegotten lost formany isHOWwe findoutabout these
salepricesandwhen.
Abit of news that all REALTORS
®
werepayingcloseattention to, but
generally got lost in thewhite noise of double digit annual growth in
places likeVancouver, is the recent case involving theTorontoReal Es-
tateBoardand theFederalCompetitionTribunal. This isacase thathas
beenongoing formanyyearsandcalls intoquestion thewayacritical
pieceofdata isbeingdisplayed. Theprice that an individual homeac-
tuallysold for. Inaseaof information, thissmall,but important tidbithas
beenkept from thepublic inameaningfulwaybyMLS
®
rulesand reg-
ulations. Well…thecompetition tribunal hashad their sayand theysay:
“nomore”.
Traditionally, theperception has been that REALTORS
®
havebeen
thegatekeepersof that information. This ispartially true. Afterahome
transactioncloses, thesalepricebecomesamatterofpublic recordand
is fed into the land registry system inOntarioand tootherquasi-provin-
cialagenciessuchasMPAC (Municipal PropertyAssessmentCorpora-
tion) where thedata is used to help set the valueof your home for the
purposesof taxation.
Many regional andprovincial rules for thepublishinganddissemi-
nationof this data to thepublic exist. For example, the salepriceof a
property in thisareacannotbeadvertisedunlesspermission isobtained
from theBuyer AND the Seller before the transaction is completedor
closed. Is thisaprivacy issue? Sure it is. AsREALTORS
®
,wegetasked
all the timewhat thesaleprice isona recent transaction. Butuntila trans-
actionhasclosed,wearenotallowed todivulge this. Itdoesmakesome
sense. Forgetprivacy foramoment. What ifa transaction fails toclose
andwe hadalready disclosed the sale price? If the property comes
backon themarket,does thatdisadvantageaSellerpotentially? Itmay
well. However, this is rare.
Muchmore to thepoint, not too terribly longago, the control over
this datawas oneof the key valuepropositions for aREALTOR
®
. And
we didn’t just act as gatekeepers for solddata, but for listingdataas
well. In thepre-internetandpre-MLS.CA
®
days,youneeded toseesome-
one ina real estateofficenot just aboutwhat salepriceswere, but you
needed to talk to us about what was available tobuy, because that in-
formationwas not public, and it was not easy toget. Informationwas
KEY to the serviceweoffered. That changed. Now the information that
isavailable to thebuyingpublic isalmost staggering. Does thatdiminish
thevaluepropositionof theprofession? No…itchanged it tobesure,but
Iwouldargue that the sheer volumeof informationavailable toushas, I
think,made thevalueofa trustedadvisormoreapparent thanever.
Youcandisplay the soldpriceof ahome to thepublic, butwithout con-
text all youhave isoneadditional pieceof information floatingaround
in theether.
Theopportunity thiscreates isprettystaggering. The firstREALTORS
®
tostop resisting thechange in theway listingsweredisplayed to thepub-
licdid something that seemsmundanenow,butwas,at the time, revolu-
tionary. They started their ownwebsites, published their own listings
books andgenerally screamed from the rooftops that the information
was there, itwascomprehensive,and itwas free. Thebenefit to thecon-
sumer isobvious inhindsight. Thebenefit to thoseearlyadoptersof the
newwayof doing things is that theywereable tobe the local expert.
Theyaddedcontext to thisnew information stream. Insteadof thegate-
keepersof thedata, theyused it tomarket themselves,andmore impor-
tantly, tomarket their listings on behalf of Seller clients. Theones that
lamented thechangeanddidnoting toadapt? Predictably, theydisap-
peared. They lostwhat theyperceivedasoneof their keyvaluepropo-
sitions,and insteadofmaking themselves relevant in thenewparadigm,
they faded intoobscurity.
Causechangeand lead. Accept changeand survive. Resist change
anddie.
Fast forward20years,andTheCompetitionTribunal rulingwill likely
create thesamekindofeffect. Therewillbehiccups. Howdoweprotect
an individual’sprivacy rightsandbalance itwith thepublic’s insatiable
demand for more, free, andaccurate information? When those deci-
sionsaremade,whatwill thenewparadigm look like? What opportu-
nities will there be for the consumer and for enterprising individuals
looking tocapitalizeon this?
In theUS, theyhavebeendealingwith this for years. Behemoth real
estateportals likeZillow, TruliaandMove.com’sMLS.COM havebe-
come togo-to consumer sites for real estate information. Automated
home-valuationwidgetsabound,asdokick-assconsumerexperiences.
Theyareyearsaheadof us southof theborder in this respect. Andyet,
lastyear, it isestimated that less than10%ofall realestate that changed
hands, did sowithout the helpof aREALTOR
®
. You see, more, better
andeasier access to informationdoes not makea consultant less rele-
vant. Often, itmakes theneedmorepronounced thanever.
Bottom line: If our keyvalueproposition iswhat thehousenext door
sold for,weareprovidingnovalueatall. Wemustbe trustedadvisors,
marketers,negotiators, localexperts. Weneed toknowabout taxation,
contract law, landplanning, construction. We need toadd value to
every transactionbyadding expertise that manypeopledo not have.
Ifyoudon’tneedus,don’tpayus. Ifyoupayus,wemustadd real value
to theprocess, not just haveaccess to information that youdonot.
Wewill allwatchand seehow thecompetition tribunalwill enforce
the ruling. Wewill seewhatdatabecomesmoreopen-sourceandwhat
ruleswillbeattached. Theprogressiveamongst uswillbe ready tohar-
ness thenext opportunityandkeepaddingvalue to theprocess forour
clients.
DesmondvonTeichman
Broker of Record, Owner, Royal LePage
LocationsNorthRealty, Brokerage
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