This whole brouhaha with the CREA and the Competition Bureau has had me thinking for a long time about what I (we) would like to see happen in the real estate industry.
Personally, I'd like to see open and transparent property related data, freely available (not to be confused with free as in no money exchange for data) and accessible to the general public. The sales industry protects this information with an invisible pay wall - want to see sales price history and other deemed important information about a property? Hire a REALTOR®.
It's true that you can get some of this data by popping round to your local land titles office and paying to see it, but this exercise becomes very cost intense if you're like me and you're wanting it not for the exercise of purchasing one property but for the exercise of trying to better understand how a segment of the market has performed or is performing. Sure Landcorp can get you data series too, but if you're not going to make money off of purchasing it from them then it's a pretty bad investment right?
There's been a transition of reality regarding the housing market in the past 30 years. Previously owning a home provided a family with a stable foundation - owners worked for the same company their whole careers and their home's market value mattered little because buying and selling was never in their medium term plans. The 1980s, 1990s and especially the 2000s ingrained the "property ladder" construct into the boomer generation and their children so much so that the five year plan is considered long term planning by most, both in their career and home ownership dreams. Because of these phenomena, the market is so much more important today, yet the information needed to accurately apply macro data to individual properties and neighbourhoods remains behind an obstructive pay wall. The agreement between the CREA and the Competition Bureau did little to change this.
I think the TSX model would be a great example for the real estate industry to follow. If I'm interested in buying a stock or ETF, I can Google the existing data and make an informed decision. I can track market segments, I can track preferred shares of GM too if that's my prerogative. I don't have to pay the TSX a dime to do so either. Until I pull the trigger and put some skin in the game. Then they get theirs. And who pays 'em? The companies that charge me money to conduct the transaction and the companies that use them to get their investment dollars. Sounds eerily similar to the way the real estate industry already works doesn't it? And that's my point.
The members of the CREA protect data because it makes their phones ring. When their phones ring they have the opportunity to convince you to use them to conduct your transaction. They charge a fee for this service, as they should. Many Canadians believe they charge too much. Some don't, and are happy to pay full commission believing it's in their best interests. Choices existed before the agreement was made, new choices will exist moving forward, perhaps catering to consumer demand, perhaps not.
So what do you want to see? If a real estate brokerage wanted to be forward thinking, driven by the belief that if they treat their customer with openness, transparency and respect, they can build a profitable and sustainable business model, what would you expect them to offer you and how much is a reasonable charge for these services?