September 4, 2018
Past Sold Data is Here. What Does This Mean for Buyers and Sellers?
It’s a new era for Toronto real estate: on August 23rd, the Supreme Court of Canada announced its refusal to hear an appeal from the Toronto Real Estate Board (TREB) to prevent real estate agents and brokerages from sharing historical home sale data with the public.
The SCC’s decision marks the end of a seven-year legal fight, following both a 2011 ruling from the Competition Tribunal and 2017 ruling from the Federal Court of Appeal that the board must allow its member agents to release the data on a broad scale.
At the heart of the issue is information about previously sold homes, including their original asking price, final sale price, whether a listing has ever been terminated and re-listed, as well as a snapshot of previous transactions.
No Longer a Gate-Keeper
Until now, this information could only be shared by TREB member agents directly to their clients via phone, fax, or in person. It could not be shared online with the general public, nor could it be used by online real estate brokerages in the creation of new home search tools and other innovations.
TREB’s argument was that allowing the broad distribution of sold data would violate the privacy of real estate clients, as well as infringe on the board’s proprietary copyright. Those arguments were dismissed by the Competition Tribunal, which found blocking online brokerages from leveraging the data was both anti-competitive and stifled technological innovation.
That the data will be shared directly with users on password protected sites to view past sold data) is a victory for online brokerages who wish to use it to enhance their sites’ functions and tools. But what implications will this move have for real estate buyers and sellers in the Greater Toronto Area?
Better Transparency for Buyers
One of the largest pain points for real estate shoppers is a lack of transparency around asking prices. It’s a common listing strategy to price condos or houses for sale in a range much lower than the intended selling price; lowballing the initial asking price helps generate interest in the home, prompting multiple offers and effectively driving the price above and beyond the seller’s desired range.
This tactic is especially prevalent in hot markets, especially for MLS listings in Toronto. Not only is it frustrating for buyers who thought they were making an offer within their intended budget, it makes it challenging for them to set realistic expectations for their home purchase.
Having direct access to sold data means these buyers will glean insight to how much comparable homes in the neighbourhood are selling for, whether their desired home is fairly priced, and how to adjust their offer strategy accordingly.
Improved Pricing Strategy for Sellers
One of the greatest anxieties for sellers is deciding on the best time to list; doing so when the market is soft could result in receiving a lower-priced offer, or the home listing lingering for an extended period of time. With past sold data, prospective sellers will have insight into whether comparable homes in their neighbourhood are selling, and for how much. Not only will this help sellers gauge whether it’s the right time to sell, they’ll be able to price their home accurately on the first try, and attract solid offers from qualified buyers.
Accurate Day-On-Market Metrics
The number of days a home remains on the market is a valuable metric for both buyers and sellers – but this data can be skewed when home listings are terminated and relisted under a new MLS number.
This tactic is commonly used to remarket homes that have gone stale by removing the listing from the market altogether, and re-listing it later with a new MLS number. The new listing may re-introduced during a busier buying season with a different price, designed to attract a new pool of buyers. For buyers just entering the market, a re-listed home looks like a fresh listing; they could be put at a disadvantage if there are issues or red flags that other buyers have passed over.
This will no longer be the case, however, as buyers will be able to see just how many times – and for how long – a home has been listed for before. This offers valuable insight into the desirability of the home, and whether there may be hidden issues to investigate before an offer is made.
A New Age for Innovation
Access to sold real estate data will make it easier for buyers and sellers to make informed decisions about the market – and now they’ll have new tools to make the process even more intuitive. Online real estate brokerages, including Zoocasa, will be able to use this information to create features that better focus the search for real estate, pinpointing homes within a user’s budget and desired neighbourhood with even greater accuracy.
In fact, such innovations have already existed for a decade south of the border, with U.S. firms like Zillow publicly posting past sold data online. Now, Canadian tech will have the opportunity to provide similar services, and create exciting new ones.
What Won’t Change: Your Relationship with Your Agent
While real estate agents were the exclusive source of this data for clients in the past, their services won’t be of any less value now that it’s publicly available. Lauren Haw, Zoocasa Realty’s broker of record, says the role of an agent goes far beyond the gatekeeper of data, and that having better-informed clients will benefit all sides of the real estate transaction.
“By sharing more information, we are able to make for a more transparent buying and selling process. Agents will provide value by interpreting price points, market trends and fluctuating data for their clients,” she says.
“Zoocasa’s users are researchers and come to our site looking for relevant information to influence their home purchase – such as school boundaries and rental options. Past-sold data will help them make more informed decisions.”