Knowledge is power. “Data” is not the plural of “anecdote.”
Most investors will have heard these clichés a thousand times, but residential real estate firms continue to keep close tabs on the data they share with clients and the public. Statistics are closely guarded by the major real estate associations, with licensed agents holding on to information the real estate associations considers proprietary.
It’s a different story in the U.S., where sales statistics, property tax information and myriad other datapoints about a property are readily available to the public.
“Canadians are some of the worst-served consumers of real estate when it comes to public data related to real estate. I think it’s the worst in the developed world,” said Ross McCredie, principal of McCredie Investments, served as chief global strategist to San Francisco-based Pacific Union International Inc. and CEO of its subsidiary, The Mark Company, from 2016 to 2020 following his sale of Sotheby’s International Realty Canada Ltd. in 2015.
While he was aware of just how much data was available to U.S. buyers, the direct experience of the U.S. real estate market sparked his interest in how to make the system in Canada more transparent. This sparked a partnership with Axiom Zen, a Vancouver innovation studio focused on machine learning, virtual and augmented reality, blockchain and distributed ledger technologies.
“What I was really interested in was creating a transparent platform,” he said. “The brokerage business is going to change a lot over the next 10 years, and those that have technology and have access to data are going to be well-positioned.”
The result was a project called the Cornerstone platform, a real estate data and transaction platform.
On Dec. 7, McCredie Investments took its next step: announcing the acquisition of Sutton Group Realty Services Ltd., founded in 1983 and currently handling $35 billion in real estate sales nationwide through 200 franchised offices.
“It was an opportunity to bring some of that technology and information that I learned into the Canadian marketplace,” McCredie said, adding, “I thought the idea of buying a Canadian brokerage and keeping it Canadian was important.”
Terms of the deal were not disclosed, but it marks a step up from Sotheby’s, which McCredie introduced to Canada and eventually expanded to 30 markets across the country and more than 900 agents. Sutton Group, by contrast, has more than 6,000 agents. Sotheby’s owned all its offices and handed sales of $25 billion in its first decade in Canada.
Being a franchised operation, Sutton Group will require less travel and allow McCredie to focus on the technology that supports the local franchises.
“Right away, I’m doubling the staff we have in Vancouver,” he said, noting that he’ll have support from many of the same people who supported the launch of Sotheby’s and have worked with him on other ventures, such as development of the Parq casino in Vancouver.
New branding, a revamped website and app will follow, as well as other improvements – investments he said add up to double what he paid to acquire Sutton Group.
“It’s really us supporting the franchise owners with new technology, refurbish the brand and have a strong voice in the Canadian marketplace in terms of advocating for homeowners,” he said.
The connection with residential clients is important. Most of the big strides in real estate tech have helped commercial and residential owners manage properties better, increasing the efficiency of building systems and reducing costs.
McCredie sees the potential for technology to empower buyers and sellers and enhance the ability of real estate agents to fulfil their fiduciary duty to clients. This may involve advising them against a sale if it’s not in their best interests, or giving them the data needed to close a deal smarter.
“It’s not about selling, it’s about actually managing from a wealth management point of view,” he said. “It’s building customer relations, but if you can’t add value to a transaction, then I think you’re going to be out of the business.”
