The pace of change we live with can be mind numbing, yet things will never move this slowly again.
Technological innovation is often the catalyst, yet the reason the future is so hard to predict is that it is heavily influenced by changes in global politics and shifting consumer demands. Let me begin by stating that sustained success in business comes from acting with the client’s interests in mind. Period. Your personal needs will be satisfied in due course.
We in Canadian real estate have flourished for many years by building an industry infrastructure that services consumers like no place on earth. Through our remarkable, nationwide listing management system, anchored by Realtor.ca, homebuyers and sellers are able to see virtually all listings in the country. And this may come as a surprise to many – Canadians pay much less for brokerage services than American consumers.
Realtor.ca is a trusted service provided to consumers by the nation’s real estate professionals. Today there is no equivalent in America. Our unique advantages go further. In Canada, national brands invest millions to build highly advanced websites such as royallepage.ca and we share our listings with each other. When a consumer is house-hunting, do they really care which company has the listing? No! Go to a national brand site south of the border and you see only that company’s listings. It is no wonder that third-party, non-Realtor websites dominate America.
In addition to serving Canadian consumers, realtor.ca and national brand sites attract hundreds of thousands of international homebuyers each year. Nine per cent of realtor.ca traffic comes from outside the country and half are U.S. residents. If our American cousins want to invest in a pristine recreational property to escape the craziness that has enveloped their land, they are well-served too!
We know from experience that choice is a good thing. Competition keeps us sharp and spurs us to improve and innovate. In my company, we acquire technology and services from around the world in order to grow and prosper. Still, you have to be a smart shopper to succeed in business. I would advise Realtors to be cautious when considering offers that appear too good to be true. As my dad once told me when I begged for help to buy a car, “a too-good-to-be-true opportunity is just that, Phil. Too good to be true.”
Let’s examine the plans of the American online advertising company, Zillow, which has announced that they intend to enter the Canadian market. If Canadian Realtors are willing to give their listings to Zillow, the company promises to advertise the properties to Americans for free on their site, potentially creating leads. Our research leads us to believe that while step one appears “free” (assuming that hard-won listing of yours that you are about to give away has no value, which of course is absurd), there is a cash-cost to the agent in order to extract real value.
Like the “free app” you download to your phone that immediately asks for your credit card in order to access the truly useful features, we assume that once Zillow is up and running, Canadian agents will be paying for leads. Zillow.com amassed US$761 million in revenue from the sale of online leads to U.S. agents last year.
Spending on an advertising service like this would be fine if Canadian agents needed Zillow to ensure that consumers saw their listings. If your company is doing their job, they don’t.
I began by explaining how different the American situation was. U.S. Realtors made terrible blunders in the early days of online commerce and have been paying for it ever since. They are trying to fix the long-standing flaws and may finally be succeeding. Brokerages and national Realtor companies recently launched the Broker Public Portal, known to consumers as Homesnap.com. It offers consumers comprehensive, real-time MLS data from those who list and sell homes, not ads. In other words, the Canadian experience. Already some 900,000 American Realtors are using the system. We wish them well.
Some of your colleagues may choose to experiment with third-party listings aggregators such as Zillow. If they have their broker’s permission, that is their choice. But is it a sound business decision? I suggest you ask yourself, do I want to deal with the consultant who asks to borrow my watch, and then charges me to tell the time? (Update, July 19, 2018: Zillow’s Alexa Fiander wrote to REM to say this column alludes “to Zillow selling leads to listings agents in the U.S. This is incorrect. Listing agents are not charged for leads on their own listings.”)
Here’s where I believe we in the real estate industry can offer Canadian consumers the best possible value:
- Double down on innovation. CREA needs to step up and drive realtor.ca to the next level. And companies like us that operate the major Realtor portals like royallepage.ca need to embrace the challenge and get the job done. We need to introduce home valuation technology; to leverage artificial intelligence and data analytics; and build recommendation engines to help families find their ideal home. Plans are in place.
- Subscribe to CREA’s DDF (data distribution facility) via the RealtorLink website or your local board site. It’s easy to do and a significant contribution to our industry’s success.
- Embrace Realtor reciprocity. It makes clients happy! Most brokerages are already co-operatively sharing listings. If your brokerage is not, it is time to participate in CREA’s DDF National Shared Pool and National Franchisor Pool.
Realtor.ca, working in tandem with Realtor company websites, are a unique Canadian success story. There will be no need to spend millions on third-party advertising services if we are doing our jobs. Let’s do our jobs.