Real estate industry loses battle to keep sales data to itself
Top court sets stage for a transformation in how we shop for homes
Canadians might soon be able to find out how much the house down the street sold for, without getting up from their couch.
The Supreme Court of Canada has announced it will not hear an appeal from the Toronto Real Estate Board, which has been arguing for years that its housing sales prices, broker commissions and pending sales do not need to be publicly disclosed.
Some say that decision, announced Thursday, will send tidal waves not just through Toronto, but the entire country’s real-estate industry, and could empower home buyers and sellers alike by putting relevant pricing information at their fingertips.
One industry observer said he expects it will open the door to the creation of websites that list recent and historical sales prices for all to see through simple searching. If a conditional offer has been placed on a specific home, that information could also be available, though personal information such as names of buyers and sellers would not be available.
Such services have been available in the United States for years.
“This has significant ramifications across Canada,” said John Andrew, a professor of real estate in the Smith School of Business at Queen’s University. “(The information) should be freely available. It should all be there within a week or two of the transaction happening.”
But, it should be noted, the interpretation of the day’s news depends on whom you ask.
Until now, the data in question has largely been the purview of realestate agents. Agents collect final sale-price data as they negotiate with buyers and sellers. That information is recorded in real estate databases that are routinely accessed by agents. Homebuyers looking to find out the information would often seek it from agents.
The Toronto Real Estate Board (TREB), the largest board in Canada with close to 50,000 agents, has been fighting an order from the Competition Bureau since 2011. At the heart of its arguments, it claimed posting such data online, even behind private websites, would violate consumer privacy and copyright.
That argument was rejected, as the bureau said TREB’s rules prevented competition and stifled digital innovation.
The Competition Bureau order was upheld by the Federal Competition Tribunal and later the Federal Court of Appeal. TREB’s attempt to have the case heard before the Supreme Court of Canada was the final stop for the board’s fight.
The Ontario regulatory council for the real-estate business cast the Supreme Court news in a very specific light, rather than as any kind of industry game-changer.
“Today’s ruling did not apply to advertising,” the Real Estate Council of Ontario’s registrar, Joseph Richer, stressed in a statement.
“Since this decision specifically applies to TREB and the use of their data, the existing (Real Estate and Business Brokers Act) rules regarding advertising continue to apply,” he said.
“In order to include the ‘sold’ price in advertising, the brokerage must obtain written consent from both the buyer and the seller.
“Advertising such information without written consent would continue to be a breach of (the act) and (the council) would deal with it accordingly.”
Ralph Shaw, president of the Ottawa board, said: “Obviously, the devil is going to be in the details. The sales price information is only one aspect of a real estate agent’s role. In the bigger picture, this isn’t a game changer. Even with the data in hand, a lot of people will need the real estate agent to disseminate that information and see how it’s applicable.”
In fact, housing sale prices have been available to the general public for years, but getting the information has required that a person go to one of the province’s 50 land registry offices during business hours to search through property records.
There were fees to access that information.
There is also specialized software called Teranet, which has a partnership with the provincial government to provide property records online for a fee.
However, real-estate agents have long argued they should be able to bring the housing sale-price data to the fore, and to use it as a marketing tool to help attract new customers.
According to Andrew, the information can be used to show price trends in a particular neighbourhood or better help a homeowner decide what price to ask for their house, before they reach out to a real estate agent.
Similarly, homeowners could use the information to monitor the selling price of homes in their neighbourhood over a given period, allowing them to more easily verify property assessments provided to them by the Municipal Property Assessment Corp. (MPAC), which form the basis for municipal property tax levels.
Homeowners who challenge MPAC assessments need to provide sales price data on similar homes when arguing their case.
“It’s already publicly available information. It just isn’t widely disseminated,” Andrew said. “Realtors have been asking why they can’t make this data available to their customers and prospective clients. If this goes through, there is nothing to stop a real estate agent from canvassing my neighbourhood and saying, ‘Did you know that six houses sold in your neighbourhood for these prices?’
“That’s going to spread to others boards across Canada,” Andrew said. “They are no longer going to try to resist this kind of demand from their own members who would like to release this kind of information and other kinds.”
The Competition Bureau’s interim commissioner, Matthew Boswell, called the ruling “a decisive victory for competition, innovation and for consumers.”
Realtors have been asking why they can’t make this data available to their customers and prospective clients.