Way back when everyone wanted to buy development land, my friend Jeremiah Shamess of Colliers used to always tell me that the only way to do this was to either (1) pay the most or (2) believe in something that others don’t. This — making non-consensus bets — is something I like to talk about a lot on this blog, but what did that mean back then?
Well, when sites were seeing dozens of offers and the market was hyper-competitive, you really had to work to find any sort of overlooked value. Maybe it was an assembly. Maybe it was a density opportunity that others were missing. Or maybe it was a rail setback that the market felt would neuter the site, but that you had a solution for. Whatever the case, believing in something different was hard work.
Today, things are a lot different. The consensus bet would be to not buy development land in the first place, and the non-consensus bet would be to buy. But instead of having to believe in unique unlocks for a site, it’s obvious that the greater obstacle is believing that the market will be there to absorb your space. And if it is there, at what price?
Nobody really knows, and that’s what makes it non-consensus. But as always, non-consensus bets are where the greatest opportunities exist. That was true when the market was booming, and it remains true today.
Cover photo by Alfan Ziyyadan on Unsplash
If you’ve ever bought a property, you might be familiar with something called “multiple representation.” It’s when one real estate agent represents both the seller and the buyer for a particular transaction. It may also be called “dual agency.”
The reason this can happen is because, here in North America at least, real estate sales are typically done with two agents: a seller’s agent and a buyer’s agent. The real estate commissions are (directly) paid by the seller to the listing brokerage, but it’s usually split between both brokerages and agents involved in the transaction.
However, if you’re an agent-less buyer and you happen to come across a property that you like on your own (perhaps by browsing around online), the selling agent will likely ask you to also sign a representation agreement with them. And that means entering the world of “multiple representation.”
Here’s some of the wording that the Ontario Real Estate Association uses:
MULTIPLE REPRESENTATION: The Listing Brokerage has entered into a Buyer Representation Agreement with the Buyer and represents the interests of the Seller and the Buyer, with their consent, for this transaction. The Listing Brokerage must be impartial and equally protect the interests of the Seller and the Buyer in this transaction. The Listing Brokerage has a duty of full disclosure to both the Seller and the Buyer, including a requirement to disclose all factual information about the property known to the Listing Brokerage.
But I don’t understand how this can work.
You now have a sole agent that is supposed to act as a neutral facilitator between (1) a party that is paying them all of their salary for the transaction (and which increases as the selling price goes up) and (2) a party that just came off the street (and where there’s no preexisting relationship).
That’s why multiple representation scenarios always make me uncomfortable. Real estate already has too many information asymmetries for my liking and this feels like a conflict of interest in almost all of the cases. I guess that’s why they are not allowed in many states in the US.
Back when the commercial internet first started to take off it was uncommon to use your real name online. Instead people relied on usernames and other pseudynoms to represent themselves. I honestly can’t remember what I used in those days, but I’m sure it was something ridiculous.
Over time though that started to change.
Blogging started to take off in the late 1990s. And we started to become more comfortable sharing personal information online. Perhaps the biggest shift though, came with the introduction of Facebook in 2004 (over 10 years ago!). All of a sudden people – young college students initially – started sharing lots of personal information online, including photos of themsleves and their friends.
But this wasn’t an overnight change. When Facebook first launched, privacy was an important component. It still is, but I would argue that it has become less central given how public a lot of other social media platforms are today. Twitter, for instance, is what it is today largely because of its publicness.
For my own social media accounts, I have made every single one of them completely public. From Twitter to Facebook to Instagram to Snapchat, nothing I post to social media is restricted in any way. And I do that because I believe we are headed towards a world with more – not less – openness, transparency and publicness.
Of course, I’m not just talking about social media and tech. I’m talking about open data in general.
Earlier this year, the Toronto Real Estate Board clamped down on real estate brokers who were publishing historical sales data online. Citing privacy concerns, TREB ordered them to stop or lose their access to the MLS system.
For those of you not from familiar with the Toronto real estate market, historical sales data for homes is not open and published online. You generally need to go through a realtor to get access to this data. Some think this is the right approach. And others think it is antiquated.
But as I explained above, our conception of what should be private can, and will, evolve over time.
Here are the details on my home:
I purchased it in September 2012 for exactly $400,000 (Canadian). It’s a 650 square foot condo in the St. Lawrence Market neighborhood of Toronto. It has one bedroom, a 400 square foot terrace, one parking spot, and 10′ ceilings.
Sooner or later, I believe this information will be freely available online. But since that’s not the case today, I figured I would just tell you. Sharing this information is not a big deal for me.