Tag Archives: real estate

Real Estate as Platform: Canadian Real Estate Industry looking for developers

As some readers know, I’ve been asked from time to time by members of the real estate industry to comment on the future of their industry, how technology might impact it and how open data (both the government variety, and the trend by regulators to make the industry’s data more open) may alter it.

It is with some interest that I point readers, as well as software vendors and others, to this Request for Information (RFI) issued by the Canadian Real Estate Association yesterday. The RFI is titled: A National Shared Development Platform and App Marketplace and this line from the RFI is particularly instructive:

This Request for Information (RFI) is issued by The Canadian Real Estate Association (CREA) to qualified service providers who may be interest in creating a National Shared Development Platform where certified, independent software vendors (ISVs) and data providers could develop, extract and combine data to generate new tools and services for REALTORS® and their clients.

In other words, from my reading it looks like the industry is seeking a data sharing portal that can serve as a platform for internally and externally driven innovation. It is very aligned with what I’ve been suggesting, so will be interesting to see how it evolves.



When Industries Get Disrupted: Toronto Real Estate Boards Sad Campaign

As some of my readers know I’ve been engaged by the real estate industry at various points over the last year to share thoughts about how they might be impacted in a world where listings data might be more open.

So I was saddened to read the other day about this misleading campaign the Toronto Real Estate Board (TREB) has launched against the Competition Bureau. It’s got all the makings of a political attack ad. Ominous warnings, supportive polling and a selective use of facts. You can check it out at the Protectyourprivacy.ca website. (As an aside, those concerned with online issues like myself should be beating ourselves up for letting TREB snag that URL. There are literally dozens of more compelling uses for that domain, from Bill c-30 to advocacy around privacy setting in Facebook or Google.)

The campaign does, however, make a wonderful mini-case study in how some industries react when confronted with disruptive change. They don’t try to innovate out of the problem, they go to the lawyers (and the pollsters and marketers). To be fair, not everyone in the Real Estate industry is behaving this way. Over the past several months I’ve had the real pleasure of meeting many, many real estate agents across the country who have been finding ways to innovate.

Which is why I suspect this campaign is actually quite divisive. Indeed, since the public doesn’t really know or care who does what in the real estate industry, they’re just going lump everyone in together. Consequently, if this campaign backfires (and there is a risk that if anyone pays attention to it, it could) than the entire industry could be tarred, not just those at TREB.

So what is the big scary story? Well according to TREB the Competition Bureau has gone rogue and is going to force Canadians to disclose their every personal detail to the world! Specifically, in the words of the Protectyourprivacy.ca website:

The Competition Bureau is trying to dismantle the safeguards for consumers’ personal and private information.

If they get their way, your sensitive personal home information could be made publicly available to anyone on the internet.

Are your alarm bells going off yet? If you’re like me, the answer is probably yes. But like me it not for any of the reasons TREB wants.

To begin with, Canada has a fairly aggressive Privacy Commissioner who is very willing to speak her mind. I suspect she (and possibly her provincial counterparts) were consulted before Competition Commissioner issued her request. And like most Canadians I likely trust the Privacy Commissioner more than TREB. She’s been fairly quiet.

But of course, why speculate about issues! Let’s go straight to the source. What did the Competition Bureau actually ask for? Well you can find all the relevant documents here (funny how TREB’s campaign website does not link to any of these), but check it out yourself. Here is my breakdown of the issue:

1. This is actually about enabling new services – TREB essentially uses MLS – the online listing service where you look for homes, as a mechanism to prevent new ways of looking for homes online from emerging. I suspect that consumers are not well served by this outcome. That is certainly how the Competition Bureau feels.

2. The Competition Bureau is not asking for information like your name and street address to be posted online for all to see (although I actually think consumers should be given that choice). Indeed you can tell a lawyer was involved in drafting the protectyourprivacy.ca website. There are all these strategically inserted “could’s” as in “your sensitive personal home information could be made publicly available.” Err… that’s a fair degree less alarming.

What the Competition Bureau appears to want is to enable brokers’ client to browse homes on a password-protected site (called a “virtual office website”). Here they could get more details than what is currently available to the public at large on MLS. However, even these password protected site might not include things like the current occupants name. It would however (or at least hopefully) include previous sales prices, as knowing the history of the market is quite helpful. I think most consumers agree that a little more transparency around pricing in the real estate industry would be good for consumers.

3. Of course, anything that happens on such a website would still have to comply with Privacy Laws and would, ultimately, still require the sellers consent.

According to TREB however, implementing these recommendations will lead to mayhem and death. Literally. Here is a quote from their privacy officer:

“There is a real possibility of break-ins and assaults; you only have to read the headlines to imagine what might happen. You hear stories about realtors getting attacked and killed. Can you imagine if we put that information out there about consumers? You can only imagine the headlines.”

Happily the Globe confirmed that the Toronto Police department is not aware of realtors being targeted for attack.

But here is the real punchline. Everything the Competition Commissioner is asking for already exists in places like Nova Scotia or across the entire United States.

Here’s what these lucky jurisdictions have not experienced: a rash of violence resulting from burglars and others browsing homes online (mostly because if they were going to do that… they could JUST USE GOOGLE STREET VIEW.).

And here’s what they have experienced: an explosion in new and innovative ways to browse, buy and sell homes. From Trulia to Zillow to Viewpoint consumers can get a radically better online experience than what is available in Toronto.

I suspect that if consumers actually hear about this campaign many – including most under the age of 40 – are going to see it as an effort by an industry to protect itself from new competition, not as an effort to protect them. If the story does break that way, it will be evidence to many consumers that the gap between them and the Real Estate industry is growing, not shrinking.


And Now… Another Message on Open Innovation for Realtors

Over the past few months I’ve given a number of talks on open data and open innovation to groups of realtors around the country. During these talks I have cautioned that the more the real estate industry tries to protect (e.g. not share) its data, the more it risks making access to data (control) be the source of competition as opposed to accessibility with the data (allowing others to create value-added services).

Consequently, recreating already existing data sets will become the goal of competitors if working with the real estate industries data to innovate new services is not possible or prohibitively expensive. Competition on this axis has, I believe, two possible outcomes: One is a winner take all world where the person with the biggest data set wins, or put another way, either the current monopoly maintains its grip or a new monopoly takes over. The other is that there ceases to be, in a meaningful way, a single data repository on real estate and market place data gets broken into lots of different silos. This implications of this outcome are less clear, but there is a risk it could be bad for consumers as, essentially, market information would be fragmented. In either case, both outcomes carry significant risks for organized real estate.

Despite this, many realtors don’t believe it is likely to happen, because they don’t believe their data can be duplicated, no matter how much I try to tell them otherwise.

But…. whoops! Look what happened!

Today, as if to hammer home what I believe is the inevitable, the Globe and Mail has an article today on a new service that allows one to get an estimate on the assessed value of one’s home by accessing an alternative data set (one essentially created by the banks). It is basically a data set that is outside of any owned by organized real estate (that found in MLS). Look! Someone has recreated what was previously seen as a data set that could not be replicated!

Of course the counter is: “It isn’t as good.” Well, two things here. First, it may not have to be. If it offers 80% of the accuracy and 20% of the cost then it will probably be good enough for at least part of the market. And once it is established, I’m confident the owners of the website will find ways to make their service better and the data more accurate.

The real estate industry has an opportunity to shape its future or be shaped by the future. The market (and the competition bureau) isn’t going to give them for forever to make up their minds.


What Canada’s Realtors could learn from Canada’s Lawyers

Lawyers aren’t generally known to be the most technologically forwarding looking group – but here in Canada they have done one thing really, really well. Making radically efficient the transaction costs around sharing critical information regarding their industry.

CanLII – the non-profit managed by the Federation of Law Societies of Canada has the goal “to make Canadian law accessible for free on the Internet.” In essence CanLII copies all of the materials produced by the courts, organizes it and makes it searchable and re-usable by anyone. For realtors wondering about their future, looking over this service might be a good place to start.

Consider MLS.ca (now rebranded as realtor.ca) the website run by the Canadian Real Estate Association (CREA) that shares information on what homes are for sale where. A few of you may also know that the Competition Bureau and CREA have recently been tangling over access to MLS. While the it is now easier for people to list properties on MLS, the data within MLS is very restricted. Much of the data only realtors can see and re-use of the data appears strictly verboten. These restrictions cause Canadians to suffer from what I like to call the Hulu Syndrome – they can see what a more open system would look like by surfing the various property websites in the United States – but they are stuck using MLS when trying to browse for a home to buy.

Canadian realtors wanting to know what the future looks like for a professional service in a world where data and information is widely available, CanLII offers both a window and a model. Unlike MLS, the great thing about CanLII is that it serves everyone, not just lawyers. It isn’t hard to imagine a world where lawyers insisted that only they can access the cataloging system they pay for (lawyers pay a small annual fee to support CanLII) much like only realtors can access the full database of MLS. In such world if you wanted to read a judgement, or view court documents on a specific case, only a lawyer could access it for you, and then they would interpret it for you, and, to carry the analogy to its logically conclusion, you would rarely or likely never see the original documents.

Thankfully for both the legal system, the market place for legal services and for our democracy, CanLII doesn’t work this way. As mentioned anyone can search, find and download all the information. Indeed, look at CanLII’s Terms of Use:

Subject to the following paragraph and the below conditions pertaining to prohibited use, legal materials published on the CanLII website, such as legislation, regulations and decisions, including editorial enhancements inserted into the documents by CanLII, such as hyperlinks and information in headers and footers, can be copied, printed and distributed by Users free of charge and without any other authorization from CanLII, provided that CanLII is identified as the source of the document.

Compare this to MLS’s terms of use:

This database and all materials on this site are protected by copyright laws and are owned by The Canadian Real Estate Association (CREA) or by the member who has supplied the data. Property listings and other data available on this site are intended for the private, non-commercial use by individuals. Any commercial use of the listings or data in whole or in part, directly or indirectly, is specifically forbidden except with the prior written authority of the owner of the copyright.

(Side note, I’m pretty sure you can’t copyright data – so not sure what the legal rights being exercised here are).

Of course, even though CanLI makes legal documents are freely available, many people still want to use lawyers because they don’t have time or, just as often, realize they need expert advice in this complicated field.

The same would be true of MLS. Many, many buyers will still want to use a realtor, although the buyers and sellers in the market place would be smarter and more informed – but this would probably lead to a better marketplace and happier customers. There are of course, a number of buyers and sellers who will simply freeload off MLS’s data to sell or buy their home on their own (much like some people probably “freeload” off CanLII to represent themselves or do research). But these are probably clients who would prefer to be doing it this way anyway – giving them full access to the database may cause them to a) realize they do need professional help or b) remove customers who don’t really want to use a realtor in the first place and are thus… terrible customers.

This isn’t to say that sharing MLS data won’t be disruptive, I suspect that some people will automate the buying/selling process which a percentage of the market place will prefer to a handheld process – but I suspect that, at some point, this will happen anyway (someone will figure out a model to make it work) at which point CREA and the realtors will have been firmly entrenched in the minds of Canadians as the obstacle to a better, more efficient marketplace, not the leaders who helped foster it.

Lawyers aren’t often known for clarity and simplicity, but clearly when they get it right, they get it right. I hope other professional services will look at what they are up to.