'Danger Report': Real estate pros fret court could break lock on secret sales data
Final decision coming on Toronto Real Estate Board releasing coveted sales data
There's little doubt Canada's real estate industry feels under siege these days.
Just check out the recent Danger Report commissioned by the Canadian Real Estate Association (CREA), which analyzes "negative game changers emerging in real estate."
Top threats include people selling their homes without an agent, consumers pressuring agents to reduce their commission, and the prospect of making inside information — such as past selling prices of homes — widely available.
"It kind of shows you what their fear is, and open data is really behind a lot of this," says broker John Pasalis with Realosophy Realty in Toronto.
"They're worried the agent is going to get cut out."
Pasalis argues that worry is what's driving the Toronto Real Estate Board (TREB) in its long and bitter battle with Canada's Competition Bureau to keep certain sales data under lock and key.
Federal Appeal Court steps in
In April, the Competition Tribunal ruled that TREB was stifling competition by limiting access to information — including a home's final selling price. Currently, Toronto real estate agents — and most agents across the country — control and provide this information to clients at their discretion.
The tribunal's decision would enable brokers to make past sales prices and other data, like how long a home has sat on the market, widely available on Toronto real estate websites.
TREB, however, appealed the tribunal's ruling. Federal Court of Appeal hearings in Toronto wrapped up on Tuesday, with no word yet on when the court will reach a decision.
One of the board's main arguments is that openly posting a home's final selling price compromises the privacy of sellers and buyers.
The ruling "opens the door to misuse and abuse of their sensitive personal financial information," said TREB CEO John DiMichele in a statement in July.
But industry critics argue this case has nothing to do with privacy concerns. Instead, they believe this is TREB's last gasp at trying to protect its 45,000 member agents from the digital era where consumers want more power and easy access to information.
Already in Nova Scotia, homebuyers can access price history for properties online.
"It's about who controls the flow of information, and TREB wants it to be them and Realtors," says Pasalis.
Toronto broker Fraser Beach agrees, calling the privacy argument "a smokescreen, a red herring that the real estate board keeps dragging in."
'It's not private'
Since 2011 Beach has been supplying anyone who signed up with daily online reports featuring the final selling prices of Toronto homes.
But he shut it down in September after receiving a cease-and-desist letter from TREB's legal counsel.
Beach argues that since Toronto agents can currently supply clients with past sales prices, the information is already out there.
"If [45,000] people have access to information which they can give to anybody they care to, it's not private. There is no privacy issue."
That's not how realty consultant Ross Kay sees it. He claims a real estate agent handing over a few sold listings to a client is not the same as making the information widely accessible online.
"What that means is that every single personal detail in a home's listing would be available to any major corporation or bank to download" and to mine for data, says Kay who lives in Burlington, Ont.
Critics point out that anyone can go to the land registry office and find out what a home sold for. But Kay argues that at least that access won't include sensitive information like revealing photos of the home included in the sold listing.
"You won't have access to photographs of the little girl's bedroom, you won't have access to what kind of TVs that family purchases."
Toronto domino effect?
The Canadian Real Estate Association also claims privacy is a legitimate argument.
In its submission to the Federal Court of Appeal, CREA sided with TREB's position. It also repeated its argument that if the tribunal's ruling stands, it should be limited to the Toronto area.
"Competitive and regulatory conditions vary across the jurisdictions of boards," stated CREA in a court document.
Regardless of the arguments, real estate expert John Andrew believes the Competition Bureau will eventually get its way — and the effects will be widespread.
"The writing's on the wall," the Queen's University professor says. "It will be difficult to overturn the Competition Tribunal's decision."
Andrew also believes the tribunal's ruling will have a domino effect across Canada, with other real estate boards starting to voluntarily release once-guarded sales data.
"Toronto will be precedent-setting — no question about it," Andrew says.
'Evolve or get left behind'
Even with more access to information, Andrew believes many people will still opt to hire an agent.
"Most Canadians really want an experienced person to hold their hand and guide them through the process," he says.
However, he warns that the real estate industry needs to move with the times and embrace the idea of making more data easily accessible online, because that's what consumers want.
He compares the situation to the taxi industry which ignored the technological revolution — until Uber came along and started stealing market share with electronic billing and an app to order your ride.
"You either evolve or you get left behind."