Monthly Archives: October 2018

Real Estate Franchises are Losing Stock Value

Remax and Realogy Stocks Tank Amidst a Changing Industry

No one seems to be talking about this. Large Real Estate Franchising Groups are Losing Stock Value, and Fast.

The two largest conventional bricks and mortar brokerage conglomerates stocks are tanking. Remax and Realogy have lost close to 50% of their stock value in the past 52 weeks.

On the other side of this news, private investments are fueling over $2 billion in new funding into efficient/scalable broker concepts. $2 billion in market cap lost on one side, $2 billion in market cap gained on another.

Remax and Realogy Stocks

Royalty Fee Models Don’t Align With Franchisor and Agent Member Long-Term Growth

Brokerage Holding companies such as Realogy and Remax rely on incremental individual contributions from their Franchisors agent base. These royalties flow upward from the Franchise to the Holding Companies. The challenge with this model is that both the Franchisor and the Holding Companies are not truly aligned with the agent members due to the conventional cap system. The cap model sees contributions diminish, if not disappear, once an agent member hits certain annual milestones. Low producing agent members (of which form the majority of membership base) contribute a royalty through their Franchise to the Holding Company, in an amount that is very similar to that of a top producing agent member.

In an industry where consumers are demanding efficiencies, the bottom is being weeded out and the 2-10 annual transaction type REALTORS® are finding it harder to justify their value. It is only obvious that the days of mass agent membership are under pressure and the result will be disastrous to the large franchise brands of the past.

Large Real Estate Franchises are Losing Stock Value, and Fast

If this opinion proves to be correct, unless these large franchise holding brands can divert their strategic resources into acquisitions of emerging counterplays, this trend will continue with the steep and aggressive slide that is becoming of a fragmented industry. Paving way for a bright future for forward-thinking scalable, agile operations and technologies, such as DigiRealtyTechnologies.com and others.

These large brands are proving to be the authors of their own misfortune. The brands in the position to stand out as industry stewards became balance sheet adjusters and profit wielders, as opposed to innovators. The results will be obvious.

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Zillow in Canada

Is there an equivalent to Zillow in Canada?

Zillow Group has become known for providing American Real Estate Searchers with a fast and easy to use, map-based real estate search platform. Along with their easy to use search platform, their website displays an abundance of property data, as well as their custom Zestimate™ feature which provides searchers with a quick and effortless way to research home prices. This allows Real Estate Consumers to do their own research by browsing real estate listings and sales data, prior to engaging with a professional of their choosing or with one of the Realtors® paying for Premiere Agent™ advertising space on Zillow’s platform. Is there currently a Zillow in Canada, or an equivalent that is trying to fill in the gaps?

To dive into whether there is a Zillow in Canada let’s first delve into Zillow’s monetization model. Their model is structured by collecting Premier Agent™ fees from REALTORS® paying to appear on listings within geographic regions of interest. This allows Premier Agents™ an opportunity to receive Buyer side leads on property listings that were supplied by another REALTOR®. With their acquisition of Mortgage Lenders of America, Zillow is also looking to collect orientation fees when they provide mortgage leads submitted through their platform to external lenders. These orientation fees may play into their home buying angle as well.

Update on Zillow in Canada

With regard to Zillow in Canada, the group recently made a move to display Canadian listings on their platform and they are in the process of adding more listings via alignments with Brokerages on this side of the border. The UX of the website is classic Zillow and very clean, but the listing inventory is low and the high-value data sets (sales data, Zestimate™ etc.) available stateside are not currently present.

Comparable Platforms to Zillow in Canada

In Canada, all the real estate boards feed their listings to the national website, Realtor.ca. Realtor.ca is operated by CREA, the Canadian Real Estate Association. This website has a national presence but is missing many of the features Zillow offers such as providing solid data and ease of use to search on their platform. Realtor.ca is typically referred to as clunky, dated and old.

On the surface level, DigiRealty.com would be the best Canadian listing provider with a similar user experience to Zillow. DigiRealty’s focus is to provide searchers with the most intuitive, fast and easy to use real estate search site. DigiRealty.com and Zillow also have similarities and differences in their monetization model. DigiRealty.com is operated by DigiRealty Technologies, which also owns and operates a wholly owned subsidiary real estate Brokerage. This entitles the company to monetize both commissions and advertising placements from aligned Agent Advertisers.

For readers that are unaware, here is a high-level overview of how some of these platform models are organized. Start off by viewing the sales channel as a funnel. Consumer traffic is in the top of the funnel (pageview etc.), consumer inquiries are in the middle of the funnel (leads, profiles and inquiries received by the Agent Advertiser), and a successful conversion/sale is at the bottom of the funnel (a closed deal). Obviously, the more deals that make it through the funnel, the more the platform can charge their Agent Advertisers for placements.

All things considered, Digirealty.com is likely the closest platform to Zillow in Canada

DigiRealty has an advanced map-based UX, fine-tuned advertising, placement and lead routing systems and a dynamic ‘go-to-market’ plan that will not be burdened by the bottlenecks that are existing for the established first movers. Where DigiRealty intends to excel, is always increasing the top of the funnel, along with focusing on reinventing the middle of the funnel activities centred around speed and thoughtful in market alignments. The already existing monster platforms know there is a problem with response speed and responder market knowledge alignment. Unless a multi-year revenue dip is okay with shareholders, they will be stuck with legacy premier placements and the associated downfalls.

DigiRealty believes that in-market, knowledgeable, lightning fast response speed and on-the-ground Agents will drive conversions. As a result of not having legacy booked revenue (that must stay on the books) from a potentially depleting premiere agent advertiser pool and a slow to response placement routing system that will bottleneck conversions DigiRealty is able to be more agile.

I wonder if the legacy, single player agent advertisers will leave platforms due to increases in response speed pressures that their small business cannot meet? If this is the case and we assume that qualified teams can nurture more middle to bottom of funnel leads to a conversion, will the resulting revenues offset the lost revenues? How does this transition look? It seems hard to imagine a case whereby a platform can service fast trigger teams and slow-moving placement agent advertisers at the same time. On a platform level, the teams likely provide better funnel to conversion movement, it will just be interesting to see how the shake back takes place.

In short, maybe the question should be, is there a Digirealty.com model in the states?

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Pain Points Faced by the Real Estate Industry

What are some of the biggest pain points and problems faced in the real estate industry today?

Some of my Coles notes on the biggest pain points and problems faced in the real estate industry today are as follows:

At current, real estate industry professional (Agents, Lawyers, Mortgage Brokers, Appraisers, etc…) make up the largest collective interest group attempting to monetize the economic derivatives of a given real estate transaction. The problem with this is that each of these independently self-interested professionals is also spending their marketing, advertising, and product development dollars in silos (to serve themselves/their individual businesses). The cumulative value of this independent spend would likely, if gathered in a collective, be multiple times greater than even the largest platforms development and operational expenditures.

The following statements combine to describe the industry’s largest pain points as I see them today:

  1. Fragmented industry professionals & digital spending: The largest interest groups spend in silos, which results in a product that is too small to fix industry challenges or to truly innovate.
  2. In the examples of unified spending we see today (at national associations/boards) the existing leadership groups have little to no foresight on how to spec, develop, monetize, deliver on and protect or grow digital products that will benefit their professionals; transactions, user search, compliance, etc… Unified spending on products that are innovating in this space is where these leadership groups should be concentrating to make an impact on the professionals they serve.
  3. Nimble digital groups are finding product-market fit by actually selling to their customers and needing to provide value to maintain their recurring revenue. Boards and associations are drowning in a cyclical pool of collect, misspend, collect, misspend, collect, misspend, compounded over years of this repetitive and unchallenged behaviour.

“On the other side of addressing the pain points of conventional industry, we must also open up the true/productive conversation – What does the industry look like in 2,3,5,10,20 years and what opportunities will emerge for forward thinking interest groups as a result. There are many… many… many products to look into. The serious groups are actually trying to organize while addressing the market, finding product market fit with future thinking professionals and building the bridge between industry and consumer”. – Jeff Mziray – CEO – DigiRealty Technologies

Side note, some of the large digital platforms/interfaces/media companies are lacking some on-the-ground-intelligence and practical application of process-based real estate knowledge that will be vital to providing a fulsome and innovative real estate technology product that will be able to scale with the industry.

The conventional industry has the opportunity to come together with technology to help shape the Real Estate industry of the future. However, if the industry does not ban together soon, we could be facing another industry disruption that will change the face of the real estate industry as we know it today… Think Blockbuster > Netflix, Think Taxi > Uber. Can industry conventional hit back? If yes, it will be fun to see what it looks like!

My two favourite search portals on the US side are Trulia and Zillow. My two favourite Canadian platforms are DigiRealtyTechnologies.com (biased built-in) and Zolo. As of October 14th Zillow has officially launched real estate listings in Canada on their .com. On first overview the site is operational but the sold and Zestimate features are not available and listing inventory is very low. I will keep an eye on this and update this article when/if the updates take place.

Jeff

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Ten Steps of the Home Buying Process

Beginning the journey to homeownership can be overwhelming and stressful. But with a little planning, you’ll get the home that’s right for you. A home that strikes a balance between your “wish list” items and the practical realities of the property, location and the housing market. Before you know it, you’ll have a place to call your very own. A place to entertain. A place to decorate. A place to raise a family. It really is an exciting time!

To help keep you on track, below are ten steps of the home buying process to assist you in buying your first home.

STEP 1 – Build a Budget

An effective budget will map out your plan to set aside money for your down payment and additional costs. It will also help determine the price of a home you can afford.

STEP 2 – Investigate Mortgage Options

There are many different types of mortgages. If you don’t have the 20% down payment for a conventional mortgage, you can get a high ratio mortgage, combined with mortgage default insurance, that allows for a smaller down payment. You should be pre-approved for a mortgage before you start house hunting.

Consult with a mortgage professional to discuss what options are available to you and learn more about how to get started.

STEP 3 – Choose a Realtor

Your realtor will play a vital role in your home buying experience. The best realtor will be a combination of a personal advisor, consultant and negotiator. He/she will show you homes that match your criteria, guide you through the home buying process, negotiate the best possible price for your home and deliver your closing documentation.

STEP 4 – Get a Lawyer

It’s important to hire a lawyer who specializes in real estate. You could find yourself in a bidding war for the home you want, and it doesn’t hurt to have a lawyer look over any offer to purchase before you submit it. A real estate lawyer will also conduct a title search and check for outstanding taxes and liens on the property.

STEP 5 – House Hunting

* Create a wish list

House hunting can be a lengthy process. To save yourself time, know exactly what you want in a home beforehand. Think about your immediate needs, future plans and lifestyle. When you look at homes, you may be tempted to concentrate on the home, but don’t forget to look at the whole property: the lot, the neighbourhood, the surroundings. How close is the home to facilities and services important to you?

STEP 6 – Make the Offer

Your agent presents the offer to the seller. This document includes the price, conditions, deposit and closing date. The seller either accepts, rejects or counters the offer (also called “signing back” the offer).

STEP 7 – Home Inspection or New Home Warranty

Hiring an inspector is voluntary, but it’s a smart idea for resale homes. You can choose to make your offer to purchase the home conditional on the outcome of your inspection. If your inspection reveals major problems, you can negotiate those repairs with the seller before your deal closes, or legally withdraw your offer.

What is a New Home Warranty?

New Home Warranties are typically used when you buy a brand new home. The builder provides a New Home Warranty to cover things like deposits and completion dates, along with labour and materials for at least one year after the home was built. It also protects you against structural problems for a minimum of five years.

STEP 8 – Finalizing the Deal

Finalizing the deal will include the final approval of your mortgage, a meeting with your lawyer to finalize details like insurance and conditions, and the results of a title search.

STEP 9 – Moving Preparations

There’s a lot to do before you move. Line up utilities and other services like phone, cable and internet. If you rent, you must give your landlord notice. Also, forward your mail to your new address and hire a moving company. Preparing these things well in advance will help you make a smooth transition to your new home.

STEP 10 – Closing Day

This is the day you legally get possession of the house. Your lawyer completes the paperwork (so the home is in your name), payments are finalized and you receive the deed and the keys. Congratulations on your new home!

 

Andrew Thake, Mortgage Agent

Dominion Lending Centres – Smart Debt

www.andrewthake.com

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Game-Changing Condos in Ottawa

Game-changing condos in Ottawa are creating an urban lover’s dream, an oasis in the midst of the nation’s capital. Breaking off from the ordinary condo lifestyle and taking it to the extraordinary. Defying the traditional, throwing away the old and tiring, offering more than just a place to sleep at night, these condos are breaking all the rules and changing the game entirely.

Luxury, modern, fresh, vision-driven, and where the first-class service is the name of the game. These condos are redefining the whole market. Condo living is being transformed and revolutionized right before our very eyes here in Ottawa.

So, what new condos are breaking all the rules and changing the game in Ottawa? Keep reading to find out the price per square foot of these game-changing condos in Ottawa!

Game Changing Condos in Ottawa - 1451 Wellington

1451 Wellington – Building Average, $850/sq ft

Become a resident of Island Park Drive and experience the epitome of luxury and some of the finest living Ottawa has to offer. 1451 Wellington is changing the game of condo living here in Ottawa and for good reason. What sets this building apart from every other condo in Ottawa? Not only offering its residences a home located in the heart of two of Ottawa’s trendiest neighbourhoods, Westboro and Wellington West, but residences also have restaurants, coffee shops, grocery stores, fashion boutiques and more just steps outside their front door.

Just by looking at this magnificent structure you know its different than the rest. You can tell this building exudes excellence, actually more than that, you can feel it. That isn’t a surprise though since excellence is what Mizrahi Developments vision was from the start with this project. Exuding excellence from inside out, Ottawa has never seen such luxury in the condo world before. From valet services, concierge, car washing services, an elite fitness room, a saltwater lap pool, guest suites, entertainment suites and much more, living has never been easier or more fabulous. Coming home at the end of the day has never been more enjoyable when you know you are coming home to a luxurious and pristinely maintained environment, where the only thing left for you to do is kick your feet up and relax.

Understanding that every resident has different needs and lifestyles there are plans to accommodate each need, and the option to customize – making your home uniquely you.  Pristine 1-bedroom suites are $838/sq ft, while 1-bedroom plus den are $768/sq ft. 2-bedrooms are $897/sqft and if you need a little more room, there are also options for 2-bedrooms plus den for $900/sq ft, rounding out the building average to $850/sq ft. With custom options, high-end finishes and top of the line builds, where even the smallest details are treated with great care and precision, helping residences create their very own sanctuary in the sky and setting the bar extremely high.

This development without a doubt has capitalized luxury living in Ottawa and no detail goes unnoticed, making it one of the leading and premier condos in Ottawa. 1451 Wellington is a game changer, leaving behind the ordinary and inviting you home to the extraordinary.

Game Changing Condos in Ottawa - Claridge Icon

Claridge Icon – Building Average, $609/sq ft

Claridge Icon happens to be the tallest residential tower in Ottawa but that isn’t the only reason it’s setting the bar high and changing the game in condo living. The exterior alone sets this condo apart from the rest of the city. This building’s architecture is rich with symbolism and creative genius, which is no surprise considering it is a build by one of Canada’s lead architectural firms, Hariri Pontarini. The exterior balconies and building curves are inspired by the swaying reeds on the banks of Dows Lake. And creative and intelligent design from the street view gives passerby’s an illusion of the building shifting and expanding, this fact alone sets this build miles apart from other the other condos in the city.  Claridge Icon is a show stopper, there is no doubt about it and residences are graced with an artistic and grand design. Modern, bold and exceptionally crafted, residences are truly living in a piece of art within the nation’s capital. Leading the way in terms of residential building design in Ottawa this project is proving that a building is more than just four walls and a roof.

Not only aesthetically on top of the condo game in Ottawa but it doesn’t stop there for this development. Offering its residences, the best and finest amenities in condo living; a yoga studio for the yogi, a fitness centre for the gym goer and an indoor pool and sauna to be enjoyed at the leisure of each resident. Entertaining has never been made easier with guest suites, a movie theatre and indoor and outdoor party space, making it perfect to host at any time of the year! The developers knew exactly what it was people were looking for when they started this project; offering urban living in the heart of Little Italy, while also providing coveted serene green space for residences to relax and enjoy, all only at a hop, skip and a jump away.

Beautifully crafted, carefully designed and impeccably executed suites make it easy to fall in love with this place. Tastefully and classy 1-bedroom suites average $598/sq ft and a 1-bedroom plus den averages at $592/sq ft. Residences looking for a little more have the option of a 2-bedroom suite averaging $639/sq ft, making the building average $609/sq ft. A trendy, high-end build that also happens to be the tallest residential tower in Ottawa, you know the views are going to be unbeatable and absolutely stunning– and they are! Offering residences gorgeous views of Dows Lake and the city at heights you never have seen them at before.

Setting the condo living bar very high (and not just referring to its height), the lucky ones who get to call Claridge Icon their home experience the new height of condo living in Ottawa. Elite and modern living (with absolutely stunning views) is made possible when you call Claridge Icon your home.

Game Changing Condos in Ottawa - St Charles Market

St. Charles Market – Building Average, $611/sq ft

St. Charles Market offers its residences a once in a lifetime opportunity to live in a Heritage Building. The fact that this building is a Heritage building means it’s already on a whole other level.

St. Charles church was built in 1908 and features Quebec inspired neoclassical architecture. The developers have taken this beautiful and historical building and transformed it into one of Ottawa’s most desired and premier living quarters in the sought after Beechwood Village neighbourhood.

This carefully crafted, and magnificently (soon to be) executed build sets itself apart in the condo market and all of the real estate markets for that matter, by putting design at the heart. Melding history with contemporary has been done before but no one has done it quite as exceptional as this and Ottawa better watch out. A seamless blend of new and old with a primary focus on respecting the church, this project offers a historically rich and welcoming environment, making it the kind of place you’d want to call home. Other condos offer a place to sleep but St. Charles Market offers, history, heart and community.

With only 50% of the land utilized for building with the rest dedicated to providing the residences and the community something more than just another building. A beautiful garden and park like border around the building bring an air of calmness and beauty to the hustle and bustle of the city reminding everyone who passes by that even while in the middle of the city it’s still important to take time to stop and smell the flowers.

Leading in the condo market for the uniqueness and creativity, offering exquisite horizontal suites that give residences that full home feel that can often be missed when living in a condo. Offering outdoor space, an elite fitness room and a welcome lounge to gather, again proving that community is at the heart of this development, making it so much more than a condo but a place you can gather and call home.

Offering something for everyone and their lifestyle with a wide range of floor plans. 1-bedroom averages around $559/sq ft, a 2-bedroom $567/sq ft and a 2-bedroom plus den $560/sq ft. Also providing 3-bedroom units averaging $583/sq ft and a Penthouse at $790/sqft, rounding the building average to $611/sqft. Each suite offers finishes that provide both function and beauty as the developers are adamant on providing finishes that speak volume about the quality while still maintaining a high integrity of design and style.

St. Charles Market is something you’ve never seen before and Ottawa is watching closely because ready or not, this place is going to revolutionize condo living, bringing more community, heart and impeccable design than we’ve seen before.

https://ottawascondominiums.com/condo/soba-condo-ottawa-203-catherine-st/

Soba – Building Average, $558/sq ft

SoBa or “South on Bank” is not merely just a condo development, but something much more. This project is full of so much heart and vision, it’s inspiring. Taking unused and unwanted land and giving it a new lease on life, this heartfelt development is redeeming and reinvigorating a little part of Ottawa. This build is giving us a new lens to look through – to see beauty where there was once nothing. The passion behind the concept and vision of this build is already more than most. Just give it time and developers will be lining up asking SoBa just how it did it and how they can also contribute to the betterment of the city.

The heart and vision behind this project alone are changing the condo game in Ottawa, but that’s only the start of what they are bringing to the table! Finally, what Ottawa has been waiting for, what Ottawa has been asking for, it’s here. Downtown Toronto finally comes to Ottawa! This project is bringing something new and something fresh to the nation’s capital. Not only is it bringing life and new energy to the Bank Street area, but it is also bringing downtown Toronto to Ottawa; with that same feel and energy SoBa is already changing and leading in the Ottawa condo market. With floor to ceiling windows, exposed concrete ceilings and an exposed concrete feature wall with columns, it has got the coveted industrial vibes down to a science. Bringing a whole new energy to the condo game, Ottawa couldn’t be readier or more excited to spice things up. From blah to brilliant and tired to trendy, SoBa has a vision for Ottawa and it is coming to life right in front of us.

Not only is this building the trendy it place to live, but it also offers a wide range of suites from 400 sq ft up to 1,200 sq ft, meeting every need, making it even more desirable than it already is. On average a 1-bedroom runs $536/sq ft, 1-bedroom plus den $526/sq ft, 2-bedrooms average $539/sq ft, 2-bedrooms plus den $522/sq ft and the Penthouse units average $670/sq ft – rounding the building average to $558/sq ft.

From the awesome location in Centretown just off of bustling Bank Street to the modern and chic game-changing ways, this development is going to be the trendy it place to live in Ottawa. Guaranteed.

Bringing a whole new vibe and atmosphere to the Ottawa condo market, SoBa creates that energy, that vibe, that feeling you get when the fit is better than just right, it’s perfect – all while bringing a little more love and beauty to the city.

Game-Changing Condos in Ottawa

Finally offering the people of Ottawa something more than the traditional and breaking away from box like attitudes of many developments. These condos are revolutionary, ahead of the times and creating a whole new way to live in Ottawa. Defying the conventional and bringing a whole lot more to the table, Ottawa better be ready because these condos are bringing a whole new game to town.

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