REAL ESTATE, REFINED
Online brokerages and splashy startups are using technology to improve the often hellish act of buying property and change the role of Realtors
THE DISRUPTION of Canada’s real estate sector has long been more a fantasy than a reality—something discussed by industry players over drinks, while the actual experience of purchasing a property remained the same as it ever was. But 2017 might be the year that the speculation comes to an end. In 2012, investors spent $300 million on real estate technology businesses globally; in 2015, that number rose to $1.5 billion, and experts expect the number to continue to grow. More importantly, the companies they’re investing in could actually make home-buying a less stressful experience.
Thanks in large part to the rise of Big Data, technology is both helping
consumers find the right agents and helping everyone be better informed about the actual state of the market. As a recent report by PwC Canada about the evolution of the Canadian real estate sector noted: “Nearly endless information is available thanks to the Internet, so customers are more informed than ever before.” That, coupled with an expected easing of industry restrictions related to how it can distribute information about previous property sales, is enriching the quality and volume of data available, and savvy companies are pouncing on the opportunity.
A number of Canadian businesses are rushing to capitalize on the trends. Zoocasa, previously an online-listings service owned by Rogers Communications (which owns Canadian Business) was sold in the summer of 2015 to Toronto-based entrepreneur Lauren Haw. Haw was already well-versed in online data-driven real estate ventures—her other company, ScholarHood.ca, offers buyers data on different Toronto school districts, to help inform their search, and she set out to rebuild Zoocasa from the ground up. The new website has neighbourhood-focused search capabilities and an online brokerage with a dozen in-house agents. The goal of the company, which secured a $1.35-million round of funding this October, is, as Haw puts it, to become a “technology-forward brokerage that could capture the online market, build intuitive features and tools, and pair that technology with a full-service offline team.” The site’s advanced search functions allow a would-be homeowner to do some granular searching (i.e., more than what’s available on MLS.ca) before even meeting with a broker. It’s like researching a purchase on Amazon, but for homes.
This kind of digital recon is what buyers—especially young buyers— expect. As Tarik Gidamy, co-founder of Toronto-based brokerage and online listing database TheRedPin says, the smoke-and-mirrors secrecy of traditional agents won’t cut it. “With houses selling in a day or less, you need to be able to make decisions based on what you see in a full and complete picture,” he says. TheRedPin supplements comprehensive data on preconstruction and resale homes in such white-hot markets as Toronto and Vancouver with a regularly updated blog, aimed at giving digital natives valuable market intel.
Such services may soon prove even more appealing to consumers. This past summer, the Toronto Real Estate Board announced it was considering lifting restrictions on how brokers can distribute data about previous property sales online. If that happens, it would unfurl reams of previously hidden sale data and set a precedent for other industry bodies to follow suit—all of which would produce much more accurate information.
And while some startups purport to take people out of the equation altogether—most notably, Californiabased app developer Reali, which aims to make buying a home as simple as ordering an Uber—industry consensus is that the most promising prospects are in technologies that complement, not replace, the work done by humans. Unlike travel agents, who saw their work made obsolete by the rise of Expedia and similar websites, Realtors are unlikely to disappear: Purchasing a home is the largest investment most people make, and few want to do to it alone.
Gidamy sees technology changing the role of the Realtor—and he thinks that’s a good thing. “Instead of being door-openers and hand-holders, Realtors are now going to be experts able to formulate data in an appropriate way for clients,” he says, “That will improve the experience the customer has.”
In 2014, CIBC economist Benjamin Tal wrote that “the gap between the importance of the real estate market to the economy and the lack of publicly available information on it is mindboggling”