The Toronto Real Estate Board has been arguing for years that sale price information is private and that in order to access that information, you need to go through a licensed Realtor. Here’s what we think.
Different people consider different things private. You undoubtedly know some people who seem to be an open book, revealing all sorts of information about themselves and their lives. It’s also likely that you know some people who only share the private details of their lives with those they consider very close.
In real estate, privacy issues abound. While it is a business transaction, the sale of a home involves seeing the private residence of the sellers, looking at how they live, how they maintain their home and where they spend their money. Buyers are often required to reveal financial details about themselves, including income, debt levels and savings, all of which can be considered very private.
One of the most hotly contested privacy issue has to do with the sale price of properties.
We started off December with a ruling from the Federal Court of Appeal that upheld an April, 2016 decision by the Competition Tribunal. Nothing says the start of the holiday season like a ruling that upholds a year and a half old decision by a federal body!
The decision from back in 2016 said that the Toronto Real Estate Board (TREB) must allow its members (i.e Realtors) to share the sales histories of listed properties online.
The case itself has been going on for about six years, which shows that TREB is pretty damn interested in this not happening. They have already said they will seek a Supreme Court of Canada appeal to fight this ruling.
The crux of TREB’s argument is that publishing sensitive data such as the price a home sold for would violate the privacy of those sellers.
Proponents for sharing the data say that TREB is simply trying to keep a competitive advantage for their members, so that the public must use Realtors to get this critical information.
There is no doubt that some sellers would rather not have the sale price of their home made public. The key point as it stands right now, however, is that that data is already not private. Realtors can look at that information and if they have a client (as defined by TREB), share that information. In fact, most Realtors do already share that information with their clients.
While TREB may make the distinction between the general public and Realtors, it doesn’t change the fact that over 40,000 individuals have access to this sales data already. If you want to keep the sale price of your property private, the only option is a non-MLS sale. Even then, the sale price will eventually go on the land registry, which is searchable by lots of people, including:
- Real estate professionals: real estate boards, realtors, appraisers, surveyors, planners, developers/architects, engineers and more.
- Government and utilities: municipalities, provincial government, federal government, private and public utilities and more.
- Investigation and Collections: tax consultants, collection agencies, private investigators, law enforcement and more
The general public not being able to access sale price data is far different from that data being private. There are many people and organizations who can access that data already – you just need to go through them.
Here are three points to consider in this issue.
Sales data is critically important.
On both the buying and selling side, if you don’t know what comparable properties have sold for, it hampers your ability to accurately assess price.
We occasionally help clients purchase or sell outside of the TREB district area. This means we need to utilize a data sharing portal to see sales data. It is a very different format than the Toronto MLS system and it takes considerably longer to get to the data.
Regardless of how long it takes or if we need to call colleagues in those areas to help gather data, going without the data simply isn’t an option. We can’t do a pricing analysis without having sales data.
It is understandable that a non-Realtor would want to have access to this sales data. Anyone who is trying to sell their home without a Realtor or buying a home without relying on the listing agent providing everything they need is severely hampered without this data.
The reason this issue has continued to be raised again and again is the simple fact that sales data is a crucial part of buying and selling homes. As the industry evolves and different models compete, access to sales data remains of tremendous value. That being said, access to data is not the only consideration here.
Having data isn’t the same as understanding data.
There is a term that originated in I.T. and ended up in consulting – the data dump. A data dump is exactly what is sounds like. Lots of information dropped on you at once.
Some of the most valuable companies in the world have access to tremendous amounts of data. It isn’t this access alone that gives them value – it is what they do with the data. As an industry, Big Data is booming as we continue to gather large amounts of data.
It takes a number of years and hundreds of hours reviewing sales data and analyzing what the data means to be able to quickly and accurate disseminate the critical points from a pile of data.
Giving sellers access to sale information is, in itself, not overly valuable. It needs to be combined with analysis and place that data in context.
If your sole claim to value is access to data, you ain’t adding much value.
It is clear that having access to sales data is the starting point for Realtors. It allows us to place a home in context for our clients. It allows us to compare apples with oranges, to do our job to make sure that our clients are not underselling or overpaying for a property.
With any large amount of data it is not about the data itself, but what the data means. Analysis and interpretation goes hand in hand with making data useful.
It is likely that TREB will continue to fight this battle and that it will take a few more years before sales data is definitively available to the general public. When that happens, data analytic companies will charge the general public money to make sense of this data. Just like Realtors charging for their service, these companies will start with the data and make it useful.
The same companies will provide Realtor versions of their service, offering subscriptions that allow Realtors to add value to their clients with this analysis. Some basic aspects will be automated and provide insights into the market and some elements will continue to require curation by experts in the field.