Are Zillow, Zoocasa heralding in the Uberization of Real Estate?
The long running battle between the Toronto Real Estate Board and the Federal Government’s competition bureau has culminated with a new ruling that TREB has engaged in anti-competitive acts. TREB was accused of anti-competitive restrictions on the use of MLS information.
We’re wondering about the future of real estate in Canada and whether TREB, the MLS, and major brokerages will survive an uberization of real estate? Are the major brands in jeopardy? Will more competition mean online listings will become the new battleground for customers? How will realtor’s sales and commissions be affected?
Lawrence Dale, a Toronto lawyer and founder of Realtysellers initiated an action against TREB in 2011 after battling them for 10 years.
“Finally, the market will open up. It will not be so easy any more for TREB and the Canadian Real Estate Association (CREA) to abuse their control over the MLS to prevent competitors to the traditional model from operating as they have to date done so successfully.” said Dale.
Apparently, according to a Toronto Star report, Dale had been put out of business by TREB. He had launched a virtual office website business with Bell. Bell valuated that business at $1.4 billion indicating how lucrative new online real estate businesses can be. You may see brokerages entering the digital marketing sphere in earnest soon. In fact, I’m looking forward to putting listings right here on my blog! Very exciting times.
Dale had launched Zoocasa with Rogers as partner. Last summer, a group reportedly paid about $350,000 for the zoocasa.com domain name and the technology behind the zoocasa.com site, which had been losing about $1.5 million a month under Rogers. It looks like a pretty sweet deal for the smart thinking investors (reminds me of the provincial government’s sale of the 407 a few years back).
Zoocasa’s on the hunt for new agents in case you’re interested! I’m unconvinced that their technology is anything more than common IDX feeds, but you can always check them out.
Lengthy Drawn Out Battle Ends as Competition Board tries to Sink their Teeth in
Dale and Canada’s Competition Tribunal originally launched the case in 2011, when TREB had restricted its 40,000 member agents from providing information from the MLS database such as home pricing and agent’s commissions. The tribunal is asking both sides for an acceptable remedy. Since TREB wants to retain control over real estate in the GTA, a compromise likely won’t be forthcoming too quickly. Ultimately, TREB’s continued resistance could lead to stronger sanctions, fines, and requirements to meet Canada’s competition policies.
Will the ruling lead to competing databases of homes for sale and sold in Canada? TREB’s resistance could show they believe the organization will eventually fall against competitors such as Zillow, Zoocasa, Trulia, Redfin, Yahoo homes, and possibly the re-emergence of Google in the real estate sector.
Is the Realtor Market Dam About to Burst?
TREB’s resistance may reveal their concern that this will all lead to the Uberization of real estate. Some feel that a boom in real estate tech innovation is about occur. Online real estate lead generation firms including Zillow are eager to grab a share of the new open market. Intense competition will likely erode traffic to realtor.ca.
Other MLS associations across the country will be forced to obey the same rules thus leading to more open markets in Vancouver, Toronto, Calgary, Edmonton, Saskatoon, and Montreal. From a report in the Globe and Mail, Bill Bill Madder, CEO of the Association of Saskatchewan Realtors was quoted as saying “Anyone that does have an MLS system could be affected by it. We’re watching it and, obviously, if it’s been deemed to be a legal requirement, we’ll make the changes.”
With more competitive practices in the real estate sector enforced, new types of real estate businesses will evolve to compete directly with real estate agents across Canada. How will Canada’s realtors adapt to the coming free for all environment?
Let’s talk digital marketing for realtors. Where are you getting leads and hoping you’ll find them for the 2016/17 seasons? Are you moving to lead generators, outdoor and transit advertising, or hoping your brokerage will deliver more leads to you? Do you feel 2016 is going to be the best year yet? See how the US real estate forecast looks like.
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