I have to tackle this topic, or risk my readers suggesting I’m “holding back.”
Let’s take a look at the most talked-about aspect of real estate in the past couple weeks…
What is Zoocasa?
It’s the question on everybody’s mind.
Since Monday, I have received nine emails from blog readers, asking me what it is, and when I’m going to blog about it.
Zoocasa is doing radio ads, billboards, and they’re everywhere. They’re in the newspaper, and they’re being talked about.
I’d like to speak very bluntly about Zoocasa, as I’m accustomed to doing with respect to most topics on my blog, however Zoocasa is a Brokerage, registered under RECO, therefore the same rules apply with respect to Zoocasa as they would apply to any agent or brokerage.
I can’t disparage John Smith, Realtor, or XYZ Real Estate, Brokerage, so I can’t do that with Zoocasa either.
What I’ll do, is give you some examples, and leave it up to readers to fill in the rest. But first, what is Zoocasa?
Zoocasa is a website, backed by Rogers, and headed up by Lawrence Dale (previously associated with Realty Sellers and T.O. Solds), whose goal, according to their website, is to “Help people make smarter home buying and selling decisions.”
Zoocasa is what we call a “VOW,” or a “Virtual Office Website,” which we’re seeing more and more of in Toronto.
Zoocasa does not have a physical brokerage, like Bosley, Chestnut Park, Forest Hill Real Estate, etc., and they do not have Realtors working for them.
In my opinion, Zoocasa is a “lead-aggregator,” whose purpose is to find people who want to transact in real estate.
Zoocasa accumulates “leads,” and farms them out to Realtors for a 35% referral fee.
I also assume that there is a membership cost, annual fee, and other costs, but as a VOW, Zoocasa is authorized to transact in real estate, via their referral network.
Zoocasa advertises that they will connect buyers with “Top Realtors,” and while I can’t disparage any Realtors or specifically talk about good/bad Realtors & Brokerages, I can give you an example.
Patrick Rocca is a Realtor with Bosley Real Estate, who has been the top Realtor in Leaside for about 15 years running. His name is a brand, he is the unofficial mayor of Leaside, and there is nobody who does more business in the area, who has worked their longer, or who is a bigger or better name. However, if you go to Zoocasa, and search in Leaside, Patrick’s name will not come up at all, let alone as a recommended “Top Realtor.”
Try it yourself.
Search an area and see which Realtors come up as “Top Realtors,” who Zoocasa would like to refer you to.
If you look at the names of Realtors or Brokerages out there on the Internet, be it on Zoocasa, or some other site, you can determine for yourself through a host of mediums, just who the good Realtors & Brokerages are, and who don’t fall into that category.
Now, without saying anything specifically about the people who might frequent Zoocasa, let me talk about my own clientele.
My clientele are made up of three distinct groups:
1) Repeat clients who are satisfied with my services
2) Referrals from clients who are happy to recommend my services
3) Blog readers who enjoy what I have to say, and who want to do business with me
There are a thousand ways to skin a cat, and when it comes to getting clients in real estate, Realtors have an infinite number of options at their disposal.
But if you ask the experienced Realtors with steady business, they’ll tell you that repeat and referrals make up the bulk of their business.
So, without speaking directly about Zoocasa, let me, based on my own business and experience, ask this question: “What kind of buyer, and what demographic, would go online to a corporate real estate search-engine website and enter their personal information to find an agent to help with the property search?”
Think, for a moment.
Where did you find your Realtor and/or property?
Were you referred by a friend?
Did you find the Realtor online?
Did you attend a seminar?
Did you search properties on MLS, and seek out the listing agent?
Or did you listen to a radio advertisement, go to a website, enter your personal information, and wait for some completely random agent to contact you?
To each, their own.
I read a comment by Lawrence Dale where he said something to the effect of, “We charge the standard 35% real estate referral fee,” with respect to Zoocasa. I find this interesting for two reasons:
1) The standard fee is, and always has been, 25%.
2) Mr. Dale has previously organized real estate of being anti-competitive when it was suggested that 5% was the “standard” real estate commission, and yet he is referring to “standard rates” here.
So let me ask this question, again, irrespective of Zoocasa:
What kind of Realtor works and gives 35% of their earnings away to the person who referred them the business?
Not a single “Top Realtor” in the city of Toronto is working on deals and handing out 35% referrals, except, apparently, those associated with Zoocasa. Just in case my opinions are called into question, let me say this, I’m sure that every Realtor associated with Zoocasa is a Top Realtor, and I respect them all, and hold them in high regard.
Draw your own conclusions.
This is not the first time this has been tried.
VOW’s can make a killing by finding a way to attract leads, farming out leads, and taking a percentage.
I was approached earlier in the year by a VOW who runs a radio show, and who solicits leads through call-ins on the phone. They said they get 100,000 leads per year, and they refer these leads to “Top Realtors” who they have hand-picked, in exchange for a 25% referral. This “privilege” came with a $5,000 annual fee.
I passed on the offer, which was presented to me as an honor, in what was supposed to feel like an interview, not necessarily because I don’t want to pay $5K for leads and kick-back 25%, but rather because I am truly blessed to have the clientele that I do. Let me give you an example…
Last week, I took a young girl out to see a townhouse in Riverdale, along with her friend from work (they joked that they needed the “buddy system” in case I a was a psycho). This girl was referred to me by a past client, to whom I sold a condo in 2011.
The girls and I were very candid with one another, joked around, had fun, and talked about how getting a dog and going for walks at the dog-park is a great way to meet your future spouse! We hatched a plan for my new client, and even determined the breed of dog she should get! I also told the girls a few stories about their friend – the one who referred me, and how he and his partner might have played ‘dress-up’ with a few items we found in a condo one day. See Monday’s blog post for more info…
My clients are amazing, and if anything, I get separation anxiety when we stop working together. I get very emotionally attached to my clients, and together, we make the process fun. I wouldn’t be able to work the hours that I do, if I didn’t enjoy the people I work with, and for some strange reason, I seem to have fun, play around, joke, and really enjoy my clients’ company about 90% of the time. I can’t tell you have many “life conversations” have taken place in the kitchen of somebody’s house up for sale.
As I said – I’m blessed to have this clientele.
Not every agent has the same situation.
Are there agents out there that will dig through crappy leads, generated by a faceless real estate search engine, and pay 35% upon a successful sale?
Are these people “Top Realtors?”
Who are the people that seek out real estate site via sites like this?
According to Zoocasa’s radio ads, they are going to take the pain and struggle out of the real estate search process. If this is truly the case, then every single one of you should sign up right away, and ignore the way real estate has been bought and sold for the past hundred years.
Have you ever seen an advertisement on TV, maybe at 2am, for a weight-loss pill that can help you lose 120 pounds in six weeks with no exercise, no dieting, and no side affects?
Draw your own conclusions…
My one fear here, to be honest, is that Zoocasa could be used as a loss-leader for Rogers, all in attempts to sell Rogers products to people who really just want sold prices on real estate, and might be looking to buy in the near future. Is there a conflict of interest here, if Rogers uses personal information from Zoocasa? I think that question was rhetorical, but I can’t tell…
In any event, I welcome competition.
When all the discount brokerages started popping up – most of which have gone out of business, I said that I welcome the opportunity to show buyers and sellers my value as a Realtor. If anything, they’re helping me to hone my craft.
I welcome fresh blood and competition into the real estate industry, and personally, I think competition is part of the free market, so bring it on.