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This story broke last week, but I was too busy writing uninformed, uneducated, ramblings about the Gardiner Expressway to really give this story its fair due.
The reaction to the announcement that Zoocasa is shutting down has been mixed, but whether you ask Realtors, or consumers searching for real estate, you’ll find both those who celebrate the announcement, and those that lament it.
Napster may have been shuttered in 2002, but it eventually paved the way for Limewire, Frostwire, Kazaa, and you might argue Netflix as well.
Perhaps one day we’ll look back at Zoocasa as a trail-blazer that never got its due…
Let me start this blog post with a bang, just in case anybody is skimming.
What do I think about Zoocasa?
It’s the most uninformed real estate buyers in Toronto hiring the worst Realtors in Toronto.
But unlike many Realtors out there, I’m not celebrating the demise of Zoocasa. In fact, I loved having them around.
Competition, in any industry, is a good thing.
We have some of the worst service, and highest prices, for cellular telephone service on planet earth, and perhaps it’s because there are only three major carriers in Canada.
If there was only one hot dog stand outside Rogers Centre on days when the Blue Jays were playing, those dogs would come at a massive premium, and the vendor might substitute for a lesser product.
I’ve always maintained that having competition in the real estate industry is a good thing, and the public, absolutely, positively, needs access to various business models.
Fact: I work for a full-service brokerage, and I am a full-service agent that charges the “standard” 5% fee for service when I list a property.
But that doesn’t mean that I was “cheering” when Zoocasa shut down.
Last week, I was astounded by the stupidity of Realtors who posted on Facebook and other social media sites, praising the shut-down of Zoocasa. It makes them look like feeble, pathetic losers who were always threatened by the existence of competition, and a different business model.
I was embarrassed for these Realtors. It demonstrated their lack of awareness. Anybody cheering Zoocasa’s demise clearly has a low opinion of their own skills, and the public will take notice. Realtors saying things like, “This is Awesome!” and then posting the article from the Globe or The Star end up looking so spiteful.
When a member of the Toronto Blue Jays is watching sports highlights at night, and sees that a member of the Boston Red Sox tore his ACL and MCL, and is out for the year, does that baseball player start jumping up and down, thinking, “This is great! Now we won’t have to play against him!”?
The public wanted, and continues to demand, access to various real estate business models, and that’s what Zoocasa was able to provide.
Whether it’s a “discount brokerage” that takes listings at 3%, or an online brokerage that offers you a 15% rebate of the buyer-agent’s commission, the public wants to make up their own mind about who to hire, and that’s what the free market is about.
Choice, and competition, are necessary in every industry.
Property Guys & Zoocasa ensure that “full service” Realtors don’t become complacent, and continue to refine their services and skills.
Now before I sound like I’m a Zoocasa-supporter, let me state unequivocally – I welcome the competition they provide, but I think the idea is awful.
I’m a firm believer in “you get what you pay for,” and it’s true of many, if not, most industries.
I’ve always maintained, “You wouldn’t seek a discount on laser eye surgery because there’s too much at stake. It’s your eyes! You want to hire somebody who is the best at what they do, and who you can trust.”
Well, I think the same theory applies to real estate.
I’ve seen, time and time again, sellers cut corners and lose money. They’ll never know in the end. You can only sell your home once, and you can’t quantify with absolute certainty what “Agent-A” can get for the house versus “Agent-B.”
But I’ve been on the other side before, representing buyers. I’ve worked with some of the worst discount listing agents in the city, and seen them sell out their own clients. I’ve worked with the “for sale by owner” sellers as well, and I love the opportunity to negotiate with a seller, and not their agent!
Well that’s on the sell side, right?
What about the buy side, like Zoocasa?
It’s very simple, folks. These “top agents” that Zoocasa advertises, are anything but.
I think it’s fair to say that if an agent is kicking back their commission, and paying a fee and a split to Zoocasa, they’re doing that because they have to.
None of the top agents in the city woke up one day and said, “I think I’ll join Zoocasa so I can take home about 40% of what I’d make if I were doing this with another brokerage.”
And it’s this that I’d expect the public to see. But you know what? They didn’t. Not all of them, at least.
I don’t understand a buyer who goes to Zoocasa to get a 15% rebate on the buyer-agent’s commission.
This buyer clearly thinks that all Realtors are the same, and none of them have any value, and thus the 15% rebate is found money.
But Realtors aren’t all the same.
There are good ones, and bad ones.
And it would seem that most of the agents associated with Zoocaza were agents that “needed” to make money, and had no choice put to look for a real estate pimp.
I tried Zoocasa a few times, just to see what would happen.
I registered with a Gmail address, and filled out the search profile. I said that I wanted an agent who was an “expert” in Leaside, and low and behold, the agent they “referred” to me was somebody who worked for Century 21 on Highway 7 in Markham.
Yes, that’s an “expert” in Leaside.
The issue, of course, is that none of the top-20 agents in Leaside are affiliated with Zoocasa, and for good reason, of course.
But Zoocasa isn’t going to say, “Sorry, we don’t have any ‘top agents’ for this area, so please go to a competitor.”
I wouldn’t expect them to, and I wouldn’t do that if I owned the site, but nonetheless, these are not “top agents.”
I will admit – there are a few decent agents on there, and some that used to be big players. But for the most part, these are people that have no choice but to sign-up.
In any event, I don’t think it was the lack of real top agents that did Zoocasa in.
I think they just befell the same fate as just about any business that doesn’t work: too many expenses, not enough revenue.
The money they spent was outrageous. We’ve all heard the incessant radio ads, and along with the billboards, that adds up!
But I don’t think they were making nearly enough money from real estate sales either. And even if they didn’t spend that whack of cash on radio ads, eventually, the business probably still would have failed.
Yes, there are people out there that think all Realtors are the same, and welcome the opportunity to buy a $500,000 condo through a crappy agent, and get an $1,875 rebate.
But clearly, there aren’t enough of those people on which to build a successful business.
I also suspect that the affiliation with Rogers might have soured people.
We all hate Rogers. That’s a fact. Like life, death, and taxes.
So how would people feel about essentially buying a house or condo through Rogers?
Here is a snapshot of the comments in the Toronto Star article about Zoocasa shutting down:
I found their radio ads to be screaming “Rogers,” although they were also done in the same vein as those awful bank ads that pander to the lowest common denominator.
You know those bank ads, something like, “Honey, guess what? I found a thousand dollars today! No, silly, I don’t mean I found a stack of bills, but I mean our local RBC/TD/CIBC account specialist/guru/expert/superhero was able to look over our accounts and save us $1,000!”
I hate those ads. The ones on television are worse. It’s always some clueless couple that looks at eachother with shock and awe as a person behind a desk points to a stack of paper with a pen.
The radio advertisements for Zoocasa were worse than both combined.
They reeked of a Rogers/TD/CIBC or some other multi-billion-dollar conglomerate, and most of all, they were overplayed. I think people just started tuning them out.
So what’s the one big positive to come out of all this?
Why did I compare Zoocasa to Napster at the onset?
Well ever since I’ve been in the business, I’ve been thoroughly unimpressed with the resources available to the public, whether from organized real estate, or third parties.
I know that many of you believe that organized real estate is a monopoly that is conspiring to keep the amount of information the public receives to a minimum, and to be honest, I can understand why you think that.
I don’t know if all of this is done deliberately, with malice, but I do know that www.mls.ca and www.realtor.ca are websites that are a decade out of date.
I don’t know what CREA, OREA, and TREB spend their fees on (as an example, TREB gets about $40,000,000 per year from us), but I can guarantee it’s not the public version of MLS!
When my buyer-clients send me listings, I’d estimate that 40% of the time, it’s a link from www.realtor.ca, but the other 60% of the time, it’s a link from www.zolo.ca or www.zoocasa.ca.
The interface on Zolo blows MLS out of the water, and when there are alternatives to something that doesn’t satisfy demand, then people are going to find it, and use it.
Zolo & Zoocasa are exactly that.
And while Zoocasa will be shutting down because their business model doesn’t work, that doesn’t mean that “a better mousetrap” can’t be built to rival the piece of sh!t that CREA gives to the public to search active listings.
Even my brokerage, Bosley Real Estate, was able to put together a better property search feature than MLS, and we have a pittance of the financial resources that CREA does.
Simply put, organized real estate has not kept up with technology, and that leaves an opportunity for somebody else.
Don’t get me wrong – I do believe that MLS is owned and operated by CREA, and as a result, they should have full control over it, and the information contained therein. I mean, your daughter’s softball team can’t complain that they want to play against the New York Yankees, so it’s foolish for the public to think that they should be able to use a private company’s data and resources.
But in 2015, the public is demanding more information, and better access to it. CREA hasn’t provided it, and Zoocasa & Zolo were up to the challenge.
Maybe there will be another Zoocasa in the future, who knows.
Their impact for now will be seen as negligible, and people will use their name as the brunt of real estate punchlines. But down the line, we might look back at Zoocasa as something that opened a door or two. I’ll be curious to see, what, if anything, comes through that door…
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In a sellers’ market buyers will frequently find themselves in competition with other buyers to purchase a home. Obviously this is great news if you are the seller, but it can leave the prospective buyer in a fear-driven flummox.
In these circumstances, a property’s asking price and its selling price can vastly differ, where the actual selling price can be well above and beyond the original listed price.
Often in this scenario, homeowners strategize with their real estate agent to under-price a property in order to generate a lot of interest and ultimately create a bidding war. The seller chooses to consider offers on a certain date, in a timeframe that works for them. This allows the property owner, in conjunction with their agent, to hold open houses on the weekend so that many prospective buyers can see the home at once, and then they deal with the offers several days later.
This positioning of a property to garner multiple offers creates anxiety and can make a buyer feel less in control. Logic tends to go by the wayside in multi-offer situations. As a buyer, you need to be prepared, by doing all of your homework upfront with a strong understanding that you may not get the property in the long run.
The seller will obviously want to get the best price they can for their property, but the offer they choose or not choose could also have to do with subjects and conditions that go along with it.
If offers are withheld until a certain date, here are a few things you as a buyer can do to feel in control of the situation and will assist you in your bid:
- Make sure your home financing is secure.
- Make sure the property title is in order. If you know in advance there aren’t any easements or rights-of-way that exist, it's one less "subject" you have to include on your offer. Fewer subjects make more appealing offers to sellers.
- If you can, do an advance home inspection. The buyer could consider your offer more readily, if it doesn’t include a “subject to inspection” clause.
- Work with your agent and to assess the competition. Are you competing against one family or a dozen? This will help you gain perspective on the situation.
- Establish the price you are willing to pay and just how much you want the home, so you make an offer you feel confident about. Then if you lose the home by a mere $1000 you won't agonize over it afterwards.
If all else fails you might want to consider a bully offer, where you present your offer via your agent before the indicated date. The hope when doing this is that the seller will consider your offer without seeing any other offers that may come forward on that date.
If you decide to make a bully offer, we suggest that you make an enticing offer with few, if any conditions. Know that bully offers are risky as you may end up paying an unnecessary premium for the property -- what if it ends up that you never had competition in the first place? You’ll never know. You can also risk alienating the seller, as they may not be impressed by your aggressive approach and direct you to submit your offer on the day they originally chose.
Finally make sure you get everything in writing. Don’t engage in oral agreements. Write everything into the contract. Your offer to purchase a home becomes a binding contract when the seller signs and you need all of your terms and conditions within in.
By: Sarah Daniels via Home and Garden Television
Thank you to everyone who came out for our Mother's Day Flowers event. It was a wonderful success and we got to meet some amazing mothers and great people. Thank you to my team, our brokerage RE/MAX Professionals, and Leah Alexander Ambler — our Broker — for the help and support. Looking forward to our next event.