Real estate information that was once almost impossible to get without the help of an agent is now available online, in yet another sign that the business of selling homes is rapidly changing.
Carefully guarded data on home appraisal values – once the private preserve of real-estate industry insiders - has been posted by a listings website backed by Rogers Communications Inc., which has tapped private databases to give people an instant estimate of a property’s value.
The move is significant for buyers and sellers from coast to coast because it is another step in weakening the position of real estate agents, who have long used their privileged access to data about local housing markets as a tool for getting customers – and for justifying commissions that usually cost about 5 per cent of the value of a home. Last year, the federal Competition Commissioner Melanie Aitken loosened the grip of property agents on home sellers by taking on a case against the Canadian Real Estate Association, arguing that restrictive rules for using the Multiple Listing Service, through which most homes in Canada are sold, were anti-competitive. The two sides eventually settled the case after CREA agreed to make it easier for sellers to list their homes on that website without using an agent through the entire sales process and paying a full commission.
Now Zoocasa.com has partnered with property valuation company Centract Settlement Services to make local market information available to anyone with a Web connection. By entering any address in the country and providing a few additional details, such as the number of bedrooms and bathrooms in a house, a user can get an instant price estimate. It can give them a better idea of what their own house is worth - or something to gossip about around the dinner table as they discuss the net worth of friends, family members and neighbours.
“That’s one of the fun things about this service,” says Butch Langlois, president of Zoocasa. “It’s not necessarily your own home that you are interested in pricing.”
The service is the latest assault on the traditional real estate model, which has often kept information in the hands of agents to ensure they are an integral part of any sale. As the Internet catches up with the industry, more and more services are being offered individually by smaller companies looking to fill niches.
“Hoarding data has been a crutch that has hurt agents,” Mr. Langlois said. “It’s a commodity and they have treated it as though it were not. And that has taken the focus away from their more valuable services.”
The industry has opened up considerably since the Competition Commissioner’s case. The decision caused a proliferation of flat-fee agents, who will post a house on the MLS site and then leave the consumer to handle the rest of the sale on her own, rather than pay a commission to be guided through the entire process.
As the industry evolves, a new host of à la carte services such as Zoocasa’s appraisal site are popping up to help consumers with specific portions of a deal. The service, which Zoocasa has coined a Zoopraisal, is modelled on similar features offered by American websites such as Zillow.com.
Zoocasa doesn’t charge for the appraisals – it makes its money by charging real estate agents fees to have their ads pop up along with the data. The business is a portfolio company of Rogers Ventures, the business development arm of Rogers Communications.
Mr. Langlois said his site’s estimates aren’t perfect – they don’t take into account improvements such as granite countertops, for example – but they will continue to improve as the service evolves. He also believes the information will ultimately drive business to the country’s real estate agents, as consumers make faster decisions based on better information.
The estimates are based on data collected by Centract, an appraisal company owned by Brookfield Residential Property Services that has inspected more than 4 million Canadian homes on behalf of banks and other financial services companies in need of valuation data before writing mortgages.
“This information isn’t meant to replace a professional appraiser by any means,” said Rob Soja, vice-president of business development at Centract. “But it’s a pretty fun tool that can give people a pretty good idea of a property’s value.”
While Mr. Langlois said he’s been surprised by the generally warm reception the service has received from agents since quietly launching last week, there are some who feel the site could give homeowners an inflated sense of worth.
“Homes that are priced too high to start have a good chance of selling for less than they would have if it had been priced right in the first place,” said Sara Hamilton, a Century 21 agent in Unionville, Ont. “It also encourages people to not have adequate representation, which can make them more susceptible to being taken advantage of by a buyer looking for a deal.”