Real estate board awaits leave to appeal sold data decision
TREB hopes Supreme Court will overturn ruling favouring competition commissioner
The Toronto Real Estate Board (TREB) will learn Thursday whether the Supreme Court of Canada will hear its appeal of a lower-court ruling last December that some online brokerages could publish selling prices of homes.
The Federal Court of Appeal decided last year in favour of Canada’s commissioner of competition, who has been arguing for more than seven years that some online brokerages, which are members of the board, should be allowed to publish sold data on their password-protected websites.
If the Supreme Court agrees to hear TREB’s appeal, the prohibition on publishing that information will continue until the case is decided. But if the court decides against hearing TREB’s case, some companies could begin publishing the data immediately.
The real estate board has vigorously defended the traditional practice of agents providing the selling price of properties to their clients directly. The competition commissioner maintains that is stifling competition in the industry.
TREB’s lawyer told the Toronto Star last year that the competition commissioner failed to prove that publishing sold information would create more competition inside the industry.
William Sasso said the case is about competition among real estate board members who have access to the same sold information. Publishing that data online could violate privacy laws and leave consumers vulnerable to the misuse of that information, he said.
The top court receives about 500 applications seeking leave to appeal lower court rulings each year. It grants about 10 per cent of those. Once an applicant is granted the right to appeal, it takes seven to nine months on average for the Supreme Court to hear the case, and another four to six months for the court to issue its decision.
The appeal decision comes at a time when there are new players entering the real estate industry.
British flat-fee upstart Purplebricks recently announced the purchase of DuProprio/ComFree for $51 million. DuProprio holds about 20 per cent of the Quebec real estate market and ComFree only about 2 per cent of the Ontario market, with a similar presence in Western Canada.
For a fixed price rather than the traditional agent commission, DuProprio/ComFree claims to save consumers money by supporting the listing, pricing and negotiation of their home sale. The company reported about 39,000 listings last year, with $45.6 million in Canadian revenue.
In June, U.S. online giant Zillow announced a deal giving it a direct feed to Century 21 Canada’s 26,000 listings. Zillow’s revenue model is based on selling ads next to real estate listings. Although it publishes sold information in many U.S. markets, it is unclear whether that will be available for the Canadian homes listed on its websites.
But even new, non-traditional competitors, and a Supreme Court ruling in TREB’s favour that would trigger the release of sold data, won’t upend real estate practices, say industry insiders, who note the longstanding publication of sold data in the U.S. hasn’t cut real estate agents’ role.
Consumers will still count on realtors to play the role of trusted adviser, said Re/MAX regional director Christopher Alexander.
“I don’t think the fundamentals of the industry are going to change, but what’s concerning is that a lot of information that consumers don’t ask for in today’s marketplace, because they don’t need it, is going to be public,” he said.
Alexander said he is particu- larly worried about buyers having access to the price of sales that are still pending.
“If you sell your house and it hasn’t closed and you post the sale price and for some reason the deal falls apart, now consumers can see what it sold for. I have a hard time believing that sellers are going to get what was previously offered now that a buyer will have that information,” he said.
But the reality is that when real estate agents and consumers are considering what to pay for a house, they’re looking at what sold yesterday, said Toronto broker John Pasalis.
“They’re basing their analysis on pending sales, not what sold a year ago or six years ago,” he said, adding that some websites such as HouseSigma find ways of extracting sold data and posting it even without access to the real estate board’s live feed.
“They’re going their own ways in pulling the data from TREB, but TREB is not giving it to them,” said Pasalis, who uses it to research local housing trends. The Bank of Canada cited his report on neighbourhoods that were most vulnerable to speculation and subsequent decline in the Torontoarea housing bubble from 2016 to early 2017.
“The advantage (of sold data) is how companies use it and what they do with it. The differentiation happens when people use it in innovative ways,” he said.
If the Supreme Court declines to hear TREB’s appeal, Pasalis said he doesn’t think the big brokerages will move to immediately post sold data, but “in theory” they could and some companies will.