For seven years, Canada’s largest real estate board has been battling to maintain the status quo on what data can be publicly released, in relation to property transactions.
In 2011, the Competition Bureau, an independent Canadian law enforcement agency, took action against the Toronto Real Estate Board (TREB). In the Competition Tribunal, the bureau argued that keeping certain data points behind locked gates — including sold information — contributes to a lack of competition in the real estate marketplace and harms a consumer’s ability to make better-informed decisions. In late 2017, a decision was made to allow sales data, among other information, to be publicly shared. The ruling stated that there were no privacy concerns for the public and that TREB was preventing healthy competition among property brokerages by restricting access to this data.
By January 2018, TREB filed yet another appeal, this time to the Supreme Court of Canada. Their argument: The Bureau’s assertion that restricted access to sold data hurts competition lacked any substantial proof. TREB continued by re-stating that keeping sold information and other details private means protecting the privacy of property owners. Now, brokerages, agents and the general public must all wait to to see if the Supreme Court will hear the case.
Zillow spearheads democratization of real estate data
For American Realtors, this court battle should feel eerily familiar. Back in 2005 and 2006, similar court cases were launched by Trulia and Zillow. (Since then Zillow bought and now owns Trulia).
At that time, the technologists that launched Zillow were fresh off their success with Expedia, a travel deals aggregator that dramatically altered how people find and buy vacation products. Like with travel, the Zillow founders wanted to disrupt how the business of real estate was being done in America. They wanted to give consumers direct access to information and pricing, thereby levelling the information playing field and enabling buyers and sellers to make more informed decisions. Of course, there was a lot of blowback from Realtors when the court case was launched.
By 2008, things started to change when the U.S. Department of Justice came to an agreement with the National Association of Realtors (NAR) — the trade association that represents all brokerages and licensed agents in the U.S. and also manages and controls the U.S. Multiple Listing Service, the online database for all property transactions. The agreement would enable low-cost online brokerages access to MLS data and this paved the way for more transparent data-sharing sites, like Zillow to start publishing data that was previously only available through a licensed agent. As we all know, this 2008 arrangement fundamentally changed the way Realtors do business in the United States but it didn’t kill the profession of a real estate agent. In 2014, just six years after the democratization of real estate data, more than 92% of all U.S. housing transactions were still being completed using a Realtor.
In the U.S., the decision to release sold data, along with other information, essentially meant the role of the agent had to change and adapt. The agent was no longer the gatekeeper of information. Instead, the Realtor’s role morphed into becoming a professional real estate advisor. Good agents use their years of accumulated knowledge and professional experience to help the buyer or seller to make the best decision.
Potential impact on Canada’s real estate market
While TREB is Canada’s largest real estate board, serving more than 49,000 real estate agents, its members are only in the Greater Toronto Area. But a ruling that would force them to release data publicly would prompt similar actions from other board’s across the country.
David Fleming, a Toronto-based agent and broker, shares this currently protected data with his clients, but in a private manner. “I am in full support of agents being able to provide more data,” he says. However, he feels the Competition Bureau’s demands are unreasonable and he agrees with TREB’s decision to appeal. President of Zolo, Mustafa Abbasi, shares Flemings concerns; the release of personal information, such as names and direct contact information of home buyers and sellers, should never be made public.
For now, we wait. If the Supreme Court decides to hear the case then it will be another six months before a final decision is reached. If not, then the Federal Court of Appeal decision is upheld and TREB must release the data. For many, this will be the moment when a step is taken to improve Canada’s real estate industry. The argument being that competition weeds out inefficiencies and creates innovation. It’s why Zillow is suddenly interested in entering the Canadian real estate marketplace — only this time, Zillow is the Goliath and Canadian tech-disrupters, such as Zolo and Zoocasa, are the proverbial “Davids.” Of course, if the Supreme Court hears the case and rules for TREB, it will mean the status quo is preserved and Zillow won’t want a piece of our multi-billion dollar industry.