A recent decision of the Federal Court of Appeal will have a significant impact on the real estate industry in Canada. The decision was specifically directed to the Toronto Real Estate Board, but ultimately it will affect the entire country. The Toronto Board has more than 50,000 realtor members, all most one-half of the total realtors practicing in Canada.
Specifically, the decision of the Federal Court ordered the Toronto Board to release information to its realtor members that in turn can be released to the buying and selling public. Before the order, under the guise of privacy, realtors and brokerages could not post sold and other information on their websites. The Toronto Board deemed the release of sold information to the public as a breach of its rules and regulations and would prosecute any offending member. The Competition Bureau, Canada’s competition watchdog, saw this stance as anti-competitive and took the Toronto Board to task. The Toronto Board appealed the Federal Court’s decision to the Supreme Court of Canada, but the highest court in the land refused to hear the appeal.
That’s how we got here, legally. The important question now is what does this mean to the consumer and what impact will it have on the industry?
Brokerages, including Chestnut Park, have begun showing the sale price of properties. In Chestnut Park’s case, we have begun by showing sold prices of our listings. The Toronto Board is still having difficulty supplying brokerages with its sold data. The amount of data is enormous, and it will take some time for it to be meaningfully and effectively delivered to brokerages and to agents. But it will happen.
When it does the sold data will not be available to the consumer without the consumer “signing in” to the brokerage’s website. This will require the consumer to provide an email address. The same will be true if the consumer is on an agent’s website and wants to access sold data. This may change. The Canadian Real Estate Association, which administers Canada’s largest real estate portal (Realtor.ca), has indicated that it will provide sold data without the need for consumers to sign in. It would be counterproductive to have the largest real estate portal providing sold data freely while brokerages like Chestnut Park are forced to use a password-protected method in allowing the consumer to access the same data.
Whether access is password-protected or not, what does this change mean for the consumer? Clearly, the consumer will be better informed. Without the intervention of a realtor the consumer can access sold, and other information, about properties and neighbourhoods, that are of interest. An informed consumer is a more intelligent consumer and can make decisions about buying and selling real estate without any concerns about being fully informed.
Will this change the industry? We are not without precedent in this regard. Information like what is now available to the Canadian consumer has been available in the United States for more than a decade. Realtors have not disappeared. What the consumer has discovered is you still need the industry. Buying and selling real estate is not like booking airline tickets online. Brokerages and realtors continue to provide insight, interpret market conditions, and guide the consumer through the process of negotiating agreements to purchase a property. Realtors continue to expose properties to their networks and through MLS and related services to the broadest possible marketplace, not to mention the mundane but necessary tasks such as showing properties, staging properties, and preparing them for sale.
There will be some who feel that with all this new information available to them they can sell their homes without the need for realtors. Both the American and Canadian experience has shown that this process is not as easy as it may seem. Information is only one part of the complex and complicated buying and selling process. There is a lot more involved in selling a property for the highest price that the market will bear. Most consumers are happy to pay a commission to know that they have been well served and because of that service achieved a successful end result that even with all the new information available to them they would not have been able to do so on their own.
Written by Chris Kapches, President and CEO of Chestnut Park Real Estate Limited, Brokerage