This year’s wireless spectrum auction should usher in a whole new wave of mobile applications. That’s where several Alberta developers come in, all vying to be the next RIM (more…)
Brad Haines, 28, seems like a normal guy. He’s tall, has slight features and never leaves home without his favourite hat. One more thing. Haines is also a “white-hat hacker” who knows a thing or two about computer security and he’s ready to talk shop (more…)
Local business directories could be the next old-style business consumed (and empowered) by digital networks. The prize is big and the competition is already fierce
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Five years ago, James and Nicole Schutz bought a new home in Summerside, a subdivision then staking claim to southeast Edmonton farmland. They enjoyed the neighbourhood, populated largely by young couples like themselves.
By Scott Messenger
Illustration Michelle Thompson
But with work, church and close friends a half hour drive into the city, the Schutzes (now three with one-year-old Nathan) decided last May to shorten those commutes, and listed their home with the for-sale-by-owner company ComFree.
“We knew the real estate market was hot,” says James, co-owner of Edmonton advertising firm, The Met Agency. “We found a house we really loved and put an offer on it – without the condition to sell our house. I wish I would have done that differently, but we had heard that if there are multiple offers that condition of having to sell your house is the first thing they’ll throw out. We just wanted our offer to be taken seriously. The good news is it was and we got the house.”
The bad news is that after about six weeks with ComFree their Summerside house still wasn’t sold. That’s when they decided to hire a licensed agent.
“The ComFree people delivered what they promised,” says Schutz, “and that’s marketing your house. They don’t claim to be Realtors; they don’t claim to handle the transaction. If the market would have stayed hot I probably would have stayed with it a little bit longer.” Based on his understanding of agents’ commissions, he figures he could have saved as much as $14,000.
Even after weeks with the agent, however, the house remained unsold. And like many Albertan homeowners, Schutz remains resentful of the near-monopoly agents hold over the residential market. He questions whether they truly earn their often five-figure commissions.
“What’s really frustrating for me is that Realtors do, in my estimation, a fairly limited amount,” says Schutz. For him, the value of Alberta’s more than 10,000 Realtors – an overworked trademark describing only those agents with paid membership in any of the province’s 11 real estate boards – is a network composed of other agents and the Multiple Listing Service, the online database and marketing tool. But, with commissions inflated by average house prices around the half-million-dollar mark, this may not be enough. “Especially,” says Schutz, “because the market has been so hot it’s easier to sell a house.”
No agent will equate a hot market with easy money (fast money, maybe), considering the many evenings and weekends sacrificed to rush closings. But sympathy for overtime workers is hard won in Alberta, especially when they’re as well compensated as top agents, with 35% of them earning between $75,000 and $225,000 a year, according to the Alberta Real Estate Association. “I’m just not convinced it’s worth the money they get in this market,” says Schutz. “Three or four years ago maybe they were making the right amount. They’ve just gotten a huge raise without having to increase performance.”
Though Schutz speaks from under the burden of double house payments, his resentment of agents reflects a shift in consumer attitudes toward a long unchallenged industry. And he isn’t alone in his frustration. This summer, over 1,000 Albertans a month listed their homes with do-it-yourself “dot-com” marketing companies like ComFree, Housemaxx and Property Guys. But are consumers like Schutz right to suspect the price of agent services has exceeded their value? Either way, that thrifty Prairie ethic, combined with spenders’ fatigue and (particularly Albertan?) cocksureness, are changing the real estate market. In the resulting struggle for market share, consumer allegiance might lie simply with whoever can sell. So far, the dot-coms have made steady gains, ComFree in particular. But, if days on the market begin to pile up, will online customers stick it out or join Schutz in turning, however reluctantly, to agents happy to forgive, forget, and just get back to business as usual?
That battle for market share has gotten ugly. After years ignoring the competitive threat that the dot-coms posed, last August the Alberta Real Estate Association (AREA) filed a complaint on behalf of its 10,000 Realtors with what was then Alberta Government Services, questioning the claims made in the Edmonton ComFree franchise’s marketing. They disputed the running tally of commissions saved by do-it-yourselfers, ComFree’s claim of 30% of the Edmonton residential real estate market, and its online statement that “agents work for themselves” rather than in the best interests of clients. The story made the Edmonton Journal’s front page and, in doing so, may actually have boosted the challenger’s fortunes.
“We were growing at a steady little pace,” says Erin Holowach, ComFree Edmonton co-owner with her husband Travis since December 2002. “But last August completely changed our business. We went from 30 to 70 staff in under four months.”
Chalk it up either to Edmontonians’ love of an underdog or just of anybody who’ll save them a buck, ComFree Edmonton’s listings climbed 20% that August, further solidifying its position as the company’s most successful franchise. (Holowach says Edmonton accounts for around 85% of every
thing ComFree, which has franchises in three provinces and in Australia; head office in Winnipeg claims it isn’t counting.) This summer’s monthly listings ranged from 1,100 to over 1,200, double that of a year earlier. With AREA’s complaint still unresolved, due perhaps to government reshuffling following Premier Ed Stelmach’s coup, there hasn’t been much need for ComFree to fix what Holowach doesn’t see as broken anyway. After all, the company, market share questions aside, is arguably the most significant competition the real estate industry and its sacred cow, the MLS, has faced to date.
While we were busy toasting the energy boom, another could-be big technology slipped away to Silicon Valley. Will the brain drain ever be staunched?
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Your competition’s pouring money into digital marketing. Should you? Start by looking at your business and your customers. Then do the math
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Technological advances meant to raise efficiency and decrease stress don’t necessarily turn out the way we planned
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Raj Narayanaswamy has his sights set on a billion-dollar bottom line–no wonder the CEO of Replicon Inc. isn’t satisfied with merely exponential sales and staff growth.
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SuperNet presents new possibilities for distance learning: six schools in Fort Vermilion are now connected and teachers can instruct up to four classrooms at once.
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Total Care Pharmacy is banking on the fact that mail-order pharmacies still occupy a legal grey area, and that desperate and disgruntled American drug-buyers are numbering in the millions.
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