PUBLIC 1 CT -2011-003 COMPETITION TRIBUNAL IN THE MATTER OF the Competition Act, R.S.C. 1985, c. C-34, as amended; IN THE MATTER OF an application by the Commissioner of Competition pursuant to section 79 of the Competition Act;
AND IN THE MATTER OF certain rules, policies and agreements relating to the residential multiple listing service of the Toronto Real Estate Board.
BETWEEN: COMMISSIONER OF COMPETITION Applicant
AND THE TORONTO REAL ESTATE BOARD Respondent
AND THE CANADIAN REAL ESTATE ASSOCIATION and REALTYSELLERS REAL ESTATE INC. Intervenors
WITNESS STATEMENT OF EVAN SAGE SAGE REAL ESTATE
I, Evan Sage, of the City of Toronto, Province of Ontario, state as follows: 1. I am a Vice President and Sales Representative at Sage Real Estate.
PUBLIC 2 2. I have been in the real estate industry for the past :; 10 years. I began my career as a Sales Representative at Royal LePage Real Estate Services Ltd. Central Branch and then was a Sales Representative at the Johnston & Daniel Division of Royal LePage Real Estate Services Ltd. 3. I am a member ofTREB, and am- was a member ofTREB's initial VOW Task Force. Sage Real Estate Business Model 4. Sage Real Estate was founded in 2010 by myself, my father Larry, and my brother Brad. We currently have approximately.g.Q 90 real estate agents. 5. We are an innovative brokerage that is ahead of the curve in incorporating technology into the delivery of real estate services. We have been called "the most philosophically and technologically advanced brokerage in the city of Toronto." 6. Today's consumer is web focused, and consumes media through the internet. 87% of Buyers use the web during their home search. Consumers expect a better online experience when searching for a home, and our brokerage uses new technology to deliver just that. 7. Homes listed for sale by Sage Real Estate enjoy a property-focused integrated marketing campaign to ensure maximum exposure by leveraging both traditional and digital tactics. Because 87% of buyers use the web during their home search we focus an incredible amount of time and effort making sure our listings get maximum exposure online. Every home listed by Sage Real Estate has its own website hosted on its own domain name i.e. www.218CottinghamSt.com. On this website we are able to provide comprehensive information about the home as well as the neighbourhood where the home is located. The website features a detailed description of the property, professionally taken photographs, a 2
PUBLIC 3 YouTube Video, 3D tours, floor plans, contact information for the sales representative, a map of the area, and information about the neighbourhood. When buyers purchase a home they are not just buying 4 walls and a roof they are buying into the lifestyle that home in that location provides. And that is what we want to convey through our marketing efforts and particularly on the individual listing websites. The home's website is also optimized for the most relevant keywords related to the home to help it show up high in Google search results. 8. Sage Real Estate provides the home seller with analytic reports showing how people are engaging with their home's individual listing website. These reports deliver statistical information about the results of our marketing strategies. These reports will identifY exactly how many people came to visit the site, where they came from and how engaged they became with the site. This allows Sage to focus their marketing efforts on what works and where the potential buyers actually come from. 9. Sage Real Estate also promotes its listings through Facebook, YouTube, Linkedln, , Pinterest, SlideShare, Postcards, Feature sheets, Lawn signs, Google Pay Per Click, Kijiji, Craigslist, QR Codes, our brokerage website, Zoocasa, Realtor.ca, RealtyStock, and e-mail. 9.1 Since the initial hearing Sage Real Estate has deployed some additional social media tactics to market homes listed for sale with our salespersons. We coach our agents to get their clients involved in leveraging their own social network by promoting the listing through the client's own social media accounts (Facebook and Twitter, for example). Also, for some listings Sage Real Estate now uses paid Facebook advertisements, and paid Y ouTube advertisements.
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PUBLIC 4 10. Our integrated marketing approach gets results for our clients. Our analysis shows that houses listed by Sage Real Estate are on average on the market for -1-1- lJewer days as compared to the TREB average days on market, and when you compare the percentage of asking price Sage get its clients 4% 2 % more as compared to the TREB average. ¥()W-datu-feed 11. 'V)I'/e currently are not subsce-rribed to TREB' s VOW feed. We--aa-re waiting te-see-hew-th-e ffiarlH~Heaect-st-s--t-et-et-ht-he-e¥-O¥-OW-We-petipet-frer.,n-,-a-nadn-dp-apratritci-euullaF-wh-ether-there-i-ss--ccu-sutsotmoemHeeHmefmfainld-for ¥QWs.;-Our---uunndeerrstanding is that VOW's were a moot point-in the US and \ve are careful about-w-hhaatt----w--e--··iinv-est-BUf--timrne--a-nand-df-fmiOonneeyy--i&i&.-.-It--is-.-.s soomeetthhiing--tthat--wwee--rmnaa--Yy--€Be-fnl-ssiideerr--iif-we-f-ee-l it-would be valuahlle---4teo- ...-.o tur· consuffiefS-; Redesign of the Sage Real Estate Website 11.1 Since the initial hearing, there has been a complete re-design of the Sage Real Estate website2 geared towards generating more home buyer leads. The Sage Real Estate website currently has as its main feature a property search tool with an extensive collection of real estate listings from Toronto, and across Canada. The interface of the property search tool is somewhat similar in concept to the interface for Realtor.ca and some of the VOWs currently being used by our competitors. 11.2 Sage Real Estate's proper!): search tool is currently populated by listings from TREB's IDX feed, and from CREA's Data Distribution Facili!): ("DDF") feed. Both of these feeds are permissions-based feeds, which means that we obtain listings information of all of the brokerages that are part of the TREB IDX and CREA DDF, and all of those
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PUBLIC 5 brokerages also receive listings information for properties listed for sale by Sage Real Estate. 11.3 Having access to CREA's DDF has allowed us to expand our scope beyond Toronto. We currently have a referral network set up throughout Canada with various local brokerages. [confidential level A start] [confidential level A end] 11.4 Sage Real Estate's current website is a good tool for generating buyer leads, and it is also a good tool for attracting new salespeople to the brokerage. ~1.5 Sage Real Estate is currently working on the next generation of our website, whic~ will expand and improve on our current property search tool. During the course of this upgrade, we will consider adding additional data feeds, including data feeds from the City of Toronto (which has a wealth of data feeds covering such things as transit lines, school locations2 distance to hospitals and fire houses, etc) and we will also consider incorporating TREB's VOW data feed at that same time. Access to MLS data 12. Sage Real Estate salespersons, myself included, establish a relationship with a potential client before we provide someone with listing information from the TREB MLS, or provide them with Comparative Market Analyses for properties. To protect the privacy of our clients anonymous people cannot just walk off the street and obtain MLS data from our salespeople. 5
PUBLIC 6 13. We think that in order to access any information on a VOW the consumer should enter a legitimate email address and name. 14. We think that the individual seller should be able to decide if they want their information made available through the VOW feed or not. This could be permitted in the listing paperwork, or not. 15. We think that if the consumer grants informed permission to use the information, then everything should be accessed, including listings that are sold, pending sold (however they would have to be removed if the deal doesn't close), withdrawn, expired, terminated, suspended and the cooperating brokers offer of commission. Market Re:Qort 15.1 During the initial hearing, I gave evidence about a Market Re:Qort newsletter that Sage Real Estate emails out, if requested, to the existing contacts of our sales:Qeo:Qle. The Market Re:Qort :Qrovides statistical trends over the :Qrevious month for a variety of neighbourhoods in Toronto. The Market Re:Qort newsletter contains aggregated statistics for the neighbourhood, as well as some individual transaction-level information about :Qro:Qerties that sold in the neighbourhood. 15.2 At the time of the initial hearing, one of the :Qieces of information that Sage Real Estate :Qrovided in its Market Re:Qort was a chart including the street address of :Qro:Qerties that had sold in the neighbourhood the :Qrevious month, as well as the list :Qrice and sold :Qrice for those :Qro:Qerties. 15.3 We are of the view that the version of Market Re:Qort we sent out at the time of the initial hearing was com:Qliant with our requirements under RECO and :Qrivacy legislation. 6
PUBLIC 7 However, we developed the sense that there is a high degree of uncertainty about what is specifically allowed by RECO and under the privacy legislation. Based on the view that it is better to be safe than sorry, in 2013 Sage Real Estate removed the street number from its Market Report, and instead included just the street name for sold properties. After further consideration of the issue, and becl!use we want to be absolutely c~rtain that we are on the right side of the privacy laws and RECO rules, we are planning on completely eliminating the address column from our Market Report going forward. A reader of the new version of Market Report will know that all properties in the chart were sold within a given neighbourhood, but there will be nothing to pinpoint where those properties are located within the neighbourhood. Commissions 16. Sage Real Estate is a traditional full service Real Estate Brokerage and our salespeople have complete discretion to negotiate their commission rates with clients on an individual basis. 17. In my experience, the amount of commission is something that is negotiated between the salesperson and the client. Commission is not a flat rate. 18. In my experience, the amount of commission to the listing salesperson varies widely. 19. In my experience, the amount of commission to the cooperating salesperson also varies widely. 20. The cooperating salesperson's commission is almost always paid out of the commission received by the listing salesperson. However, the cooperating salesperson's commission is addressed in the buyer representation agreement. If the cooperating salesperson does not get paid the full amount as agreed in the buyer representation agreement from the listing 7
PUBLIC 8 salesperson, then the buyer is responsible for any deficiency. This clause is always contained in a buyer representation agreement, and the amount of comm(ssion is subject to negotiation between the buyer and the salesperson.
SIGNED THIS, this15th day of May, 2015.
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PUBLIC 9 CT-2011-003 COMPETITION TRIBUNAL THE COMMISSIONER OF COMPETITION Applicant - and-
THE TORONTO REAL ESTATE BOARD Respondent - and-
THE CANADIAN REAL ESTATE ASSOCIATION AND REALTYSELERS REAL ESTATE INC. Intervenors
UPDATED WITNESS STATEMENT OF EVAN SAGE SAGE REAL ESTATE
AFFLECK GREENE McMURTRY LLP 365 Bay Street, Suite 200 Toronto, Ontario M5H 2V1
Donald S. Affleck, Q.C. LSUC#: 10420B David N. Vaillancourt LSUC#: 569691 Fiona Campbell LSUC#: 60383V Tel: (416) 360-2800 Fax: (416) 360-5960
Counsel for The Toronto Real Estate Board