Hey there, time traveller!
This article was published 28/9/2010 (2130 days ago), so information in it may no longer be current.
Canada's niche for the sale-by-owner real estate market got a new major player Tuesday after Power Corp. of Canada made a bet Canadians will embrace a nationally branded version of the concept.
Through its Quebec-based subsidiary bytheowner.com (duproprio.com in Quebec), which it owns by way of holding company Square Victoria Digital Properties, Power Corp. has bought four smaller companies in the no-commission space in Alberta (ComFree), Saskatchewan (Skhomes4sale.com), Manitoba (ComFree) and Ontario (PrivateRealEstate) for an undisclosed amount. The company now lists 12,000 properties for sale across Canada.
With this move, the diversified management company, with a market cap of more than $12 billion and interests in businesses such as Great-West Lifeco Inc. and Investors Group Inc., joins Rogers Communications Inc. and its online real estate search engine Zoocasa as major conglomerates taking a chance on consumers moving away from the traditional real estate model.
"(Power Corp.) shares the same vision we do that the real estate marketplace will be very different in the next few years," said Martin Rygiel, general manager of bytheowner.com.
Craig Fehr, an analyst with Edward Jones, said it should be thought of as a minor advertising company in Power Corp.'s portfolio.
"On a subsidiary level, this (expansion) just made sense from a diversification perspective," Fehr said. "It offers another little bit of exposure to the online space. But I would never envision it becoming a material portion of Power's overall earnings."
The for-sale-by-owner concept takes out the real estate agent, allowing a consumer to save as much as five to six per cent in commissions by listing their home online and then selling it independently.
The downside is a consumer loses access to the vaunted Multiple Listing Service, an online home listing controlled by the Canadian Real Estate Association. Only licensed Realtors can post on MLS, which is a problem for alternative services, as the service dominates the market to such an extent it has been under the investigation of the Competition Bureau.
Most non-MLS home-sale websites lack size and brand-name awareness as a result, but a nationally branded company with a billion-dollar backer may have enough presence to become a threat.
"The key here is scale," Phil Soper, chief executive with Royal LePage, said in an interview. "The strategic rationale here is to desperately amalgamate costs to make it a going concern."
However, Soper does not see bytheowner.com and other such sites as a threat to established Realtors.
-- Postmedia News