Real estate website Zoocasa to shut down June 22
Online real estate brokerage Zoocasa will cease to exist as of June 22.
The website, a wholly owned subsidiary of Rogers Communications, began as a listings website before expanding in 2013 into linking up buyers and sellers with realtors.
Zoocasa-recommended realtors would sometimes offer customers sales commissions a few percentage points lower than the industry standard, which is about 2.5 per cent for both the buyer and seller.
Earlier this year, the Toronto-based company ran afoul of the local real estate board by mailing clients a list of sale prices for nearby homes every day. Previously, it was much harder to get that sort of proprietary information about how much houses sold for — not just listed for — which encouraged would-be buyers and sellers to work with a realtor directly.
The Toronto Real Estate Board took issue with that practice, citing concerns with customer privacy, and sent warning letters out in February to Zoocasa and a number of other online services that were sending out similar data. Some ignored the threat and kept mailing out the data. But Zoocasa complied with TREB's request.
It then registered as a licensed brokerage, giving it access to MLS information that it included on a relaunched website and sent to clients. TREB asked the company to stop sending out sales info when Zoocasa agreed to get its licence at the start of March.
A spokesperson with Rogers told CBC News "the business overall is shutting down — so we will be closing down the website and the mobile app and the operations of the business as of June 22nd, 2015."
"We made this decision to no longer continue our investment as Zoocasa as the business is no longer a fit with our (Rogers) overall plan for the company at large and our core areas of focus."
John Andrews, a professor of real estate at Queen's University, said Zoocasa was the most likely of alternative agencies to succeed and its demise points to the dominance of the MLS system.
"I'm not really surprised by the [shutdown.] The MLS system really had a very strong market share and the various alternatives to listing don't necessarily provide the whole host of agent services to their markets," he told CBC News.
Selling or buying a home through a service such as Zoocasa can take a lot of legwork and relies on the homeowner or buyer knowing their local market, Andrews added.
"The fees they were charging were really very low, so unless they were able to penetrate that MLS market to a great extent, their revenue was pretty limited," he said.