Celebrating its one-year anniversary this month, Unreserved has provided a niche to the real estate industry — a transparent, online call auction company.
Like his previous companies, Edealer and Eblock, Canada’s largest digital car auction which had an Initial Public Offering (IPO) in November at over one billion dollars, Unreserved CEO, Ryan O’Connor is no stranger to the digital auction world.
“The idea came to me a few years ago,” says O’Connor, “while auctioning cars, we considered the need for this to crossover into real estate.”
“I don’t come from a real estate background but I got to look at it with fresh eyes and see some fundamental problems with the process. Just because something has always been done a certain way doesn’t mean it’s right,” adds O’Connor, “If selling homes was suddenly brand new to the world, how would it be? I could tell you it would not be the way it is today.”
With traditional sales, albeit with some initial interest, many homes could remain on the market for months before dropping the listing price in order to up the chance of a sale. When COVID hit, however, the market went crazy.
“There was a massive lack of transparency across Canada and people demanded reform or change,” adds O’Connor, “A transparent auction would therefore solve the biggest problem flagging the industry. So we went all in on developing the [Unreserved] platform.”
In order to prove their concept to potential sellers, O’Connor and his team started by purchasing properties themselves to auction off. “It was a huge success. Our first year will finish with 270 properties sold,” says O’Connor.
How does Unreserved Evolve Away From Traditional Real Estate?
“From a seller’s perspective, we gave price guarantees. We still offer them. It’s a huge add-on for value,” says O’Connor, “Let’s say we guarantee $500,000. You’re guaranteed at least this amount before the auction even begins.”
This is only the beginning of how Unreserved is changing the game for sellers and buyers across Canada. “We only charge sellers a 1% seller’s fee. With that fee, we get the house up on MLS, do the staging, the marketing, and everything. While we do list your home, it’s the seller’s option to invite buyer agents for a 2% commission.”
How Does Unreserved Benefit Buyers?
For buyers, “from experience, if you have one house and 100 different inspectors, you’re going to get 100 different reports. There’s that human element,” says O’Connor.
“When you look at a house on Unreserved, it’s stationary. We automatically do a preinspection and then stand behind the property with a warranty. That’s a huge benefit for buyers.” Buyers can also bring their own inspections prior to the auction.
We are currently operating 100% for free
“We’re still only charging the 1% plus 2%, but we’re giving 3% back to buyers. In many cases, this will actually buy down a mortgage rate to 0% from 3%. This is the biggest promotion we’ve ever done as a company and we’re really excited to offer this to buyers,” says O’Connor, “It could essentially shave a couple of years off a mortgage or take it in cashback.”
As we pivot to more of a buyer’s market, transparency in bidding isn’t much of an issue as it was even months ago. “We make sure with all the offers coming in that everyone is in agreement to the same terms and conditions prior to making a bid. It makes it fair for all buyers. This protects a Seller from an agent coming back with two offers, a lower one and a high one, and then suggesting the higher one without telling you there were conditions attached to it that aren’t there on the slightly lower offer.”
The Unreserved platform has signed up over a billion dollars worth of preapproved buyers in the last 12 months, showing the amount of buyer interest and the need for something transparent.
“Both Sellers and Buyers have been overwhelming positive. Everything that hits the platform sells, yet some still question whether they’re getting the best offer possible,” says O’Connor, “We had a recent property in Ottawa where the Seller had a reserve to not take anything less than $850,000 and it pulled $830,000 in the auction. So the Seller fired us. They eventually ended up selling for $740,000. We can’t make everyone happy, but that was really validating for us.”
Continues O’Connor, “Many will list with an agent because they can say they think it’s worth more and list the property higher. But what that property ends up selling for at the end of the day, our numbers are bang on. Our data analyst team continues to grow and perfect that skill. The truth is in the numbers and our numbers don’t lie. Especially in this new Buyer’s market, that’s become really important.”
TORONTO – One expert predicts Ottawa‘s changes to mortgage rules will help spur demand among potential homebuyers but says policies aimed at driving new supply are needed to address the “core issues” facing the market.
The federal government’s changes, set to come into force mid-December, include a higher price cap for insured mortgages to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
CIBC Capital Markets deputy chief economist Benjamin Tal calls it a “significant” move likely to accelerate the recovery of the housing market, a process already underway as interest rates have begun to fall.
However, he says in a note that policymakers should aim to “prevent that from becoming too much of a good thing” through policies geared toward the supply side.
Tal says the main issue is the lack of supply available to respond to Canada’s rapidly increasing population, particularly in major cities.
This report by The Canadian Press was first published Sept. 17,2024.
OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
