Like any sales profession, a salesperson would often seek out opportunities to provide value to clients that makes their services more valuable. And since the creation of the internet in the mid 1990’s, many Realtors would use sales data as a way to connect with potential clients- but today, there are apps like HouseSigma.
You’ve likely seen it: logging onto a Realtors website or an ad on social media offering to send you recent sales data in return for your email address. You then end up on a Realtors mailing list and receive regular updates. There’s nothing wrong with this if you agree to it- after all, you’re both getting something of value.
But now, that information is widely available through a number of apps and websites like House Sigma that have watered down a Realtors competitive advantage of providing “just sold” data. After all, if everyone has access, how valuable is it?
Toronto Real Estate Board Releases Data
It all began in 2011, when the Competition Bureau sued the Toronto Real Estate Board (TREB). Then, in 2016 TREB was ordered to make sold data available to the general public. Through a series of back and forth appeals, in 2018 the data was finally made available.
This information hurt a lot of Realtors who relied on this “under the cloak” information to get them new clients. If someone has something that you want, it puts you in a position of power. Now, consumers had the ability to research their own data and make their own decisions.
What is HouseSigma?
HouseSigma a very popular site in the GTA for consumers, is just one of a number of sites that helps consumers make better decisions. According to their website, House Sigma “uses artificial intelligence technology to estimate home value for all available listings in the GTA. Buyers can obtain an estimated home valuation and identify similar nearby sold listings, to help when determining their final offer price!”.
The CBC News also posted an article in 2017 on HouseSigma indicating sales data is “What buyers and Sellers have been looking for: Sold prices for Toronto Homes now online after court ruling”. As Realtors, our jobs are to evolve into what customers and clients need, not what WE think they need.
This sort of artificial intelligence is great for using sold data to compare different aspects of a home based purely on date. But buying a home is so much more than that. Buying a home is a very personal experience. Has the home had recent renovations? New cabinetry or paint colours are not captured with artificial intelligence. Even the smell of a home cannot be captured by the artificial intelligence of apps like HouseSigma.
HouseSigma isn’t the only game in town- there are many other American models like that of RedFin, Zolo or Zillow that have been around for years. These home buying apps help people find, research and estimate sale prices or trends within areas. They compile the same information that Realtors have access to, in different formats.
Sometimes these sites can create what’s known as “paralysis by analysis”. There’s a fine line between basing decisions on facts and figures- remember, real estate is a very emotional decision that can’t be determined by an app.
How do we feel about apps like this as Realtors?
We’ve never believed in providing Guelph homes sales data in return for your information. In fact, if you want it just get in touch and we’ll send you what you want!
These apps also put pressure on Realtors who relied on traditional public open houses to meet with potential clients. They would provide information on the market but also try to gain new clients. No open houses, no new clients. Since open houses came to an abrupt halt in March 2020, with COVID they haven’t really re-surfaced in a meaningful way.
We encourage our clients to use these sites to come up with their own conclusions. This includes market prices, sold data and neighbourhood trends. The more educated a consumer is, the better decisions they will make.
Part of the challenge for Realtors is this once coveted information on sold prices, or “comps” was key to meeting with a client. In many cases in the past, this coveted sold information was the sole marketing a Realtor would use for business.
Clients do their own research
Now that consumers have access to sites like House Sigma, they can do some of their research. They don’t need to request it from a Realtor. In fact, some sellers may say “why do I need a Realtor?” if I can get the data myself- and in some cases, that’s a valid concern.
The role of a Realtor is not (and should never be) an order taker, or comparable provider like HouseSigma. The role of a Realtor should be:
- an advisor- to advise clients on the right pricing strategy, the right time of years to sell a house, the right price
- a marketer- to ensure that they have a proper marketing mix and promote your home effectively
- a negotiator- ensuring that they’re working to get you the best deal, whether you’re a buyer or seller
- to provide you the ins/ outs of a real estate contract and ensure that you have protected yourself legally
The Bottom Line: Sold Prices are just a piece of the puzzle
Beth and Ryan encourage their clients to use apps like HouseSigma. But these are only a piece of the puzzle- seeing homes in person cannot be replaced by artificial intelligence.
Your Realtor should add value in real estate the same way you get value from a financial advisor, lawyer or mortgage broker. Not just in providing you with comparable, recently sold pricing.
Beth and Ryan Waller are Guelph Real Estate Agents. You can contact them here for more information.