Are We in the Dark with Real Estate Statistics?

Some real estate brokers in Nova Scotia have built an online database of open-access market information which allows prospective buyers to get property information such as sales history and number of days on market without going through a Realtor®.

This has caused some waves, especially with the Toronto Real Estate Board, who is set to face Canada’s Competition Tribunal this December to discuss whether Realtor®s should be allowed to build online databases of information open to clients. Because Toronto boasts the largest real estate market in Canada, the Competition Bureau is hoping that changes to their market will ripple to others.

The Toronto Real Estate Board fears that making these data public will put privacy at risk, so much so that they have created a website, www.protectyourprivacy.ca, to help prevent the information from being spread.

On the other hand, the Competition Bureau feels that raw statistics that affect the country’s economy should be available for everyone. And, in response to fears of privacy being invaded, the Competition Bureau states that the information would be password protected with the privilege given to those working with Realtor®s.

In addition to home buyers looking to make their own assessments and home sellers looking to see what their house may be worth, researchers and economists also believe that the information should be public.

Many feel that CREA fudges the numbers a bit when it comes to stats. When calculating the total sales for local boards, CREA aggregates those numbers. So, the same listing, posted on three separate boards, gets calculated as three sales. But CREA says that while this is sometimes the case, it accounts for a mere 0.8% of sales. It also seems that these numbers aren’t regulated or cross-referenced by a third party for accuracy.

Randy Dyck, British Columbia Realtor® and President of the Eximus Real Estate Brokerage, doesn’t believe that CREA cooks their books.

“I am okay with the data being opened to the public. It will certainly change the dynamics of the Realtor® business as we know it today. However, the good agent will still be sought after for the deal” he says.

He believes that, more than ever, people will be looking for Realtor®s to negotiate the deal. Researching properties and their statistics is one thing; presenting an offer and negotiating it is another.

A comparison is often made between real estate and online travel booking and how it has taken business away from travel agents. Randy feels this is a poor comparison, “Real estate is big dollars, complicated, and requires much advice and guidance. So many potential issues can arise in even the most simplistic deal. Think of the potential problems with strata corporations, negotiating, financing, protection for both by parties, title issues, management of the deal, and even real estate counselling”.

With travel, the ability to book your own travel has become more convenient and easier in many ways. However, if I screw up in booking a flight, hotel, a holiday package, it isn’t life changing other than I had a bad experience or I over spent by a few hundred bucks. If I screw up on a real estate purchase or sale and it could change my lifestyle. It could end up costing me $100,000’s.

So, what are the pros and cons of public information?

Pros:

• Buyers will be able to get the necessary information to make a more informed, comfortable decision.
• Buyers will be able to pull their own comparables on properties, helping them decide on an offer.
• Sellers will be able to find information on their own home, helping them with the selling decision.
• Sellers will be more susceptible to fair market value as the comparables will be public knowledge.
• Investors will have easier access to market stats.

Cons:

• Realtor®s won’t have the “added value” of market statistics.
• Sellers will have a harder time over pricing homes.
• Privacy may be an issue as the purchaser and sellers name will appear with information.
• Without talk of “regulations,” still a change that the numbers could be cooked.

What do you think?

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