Toronto-based startup Dirt is using the power of crowdsourcing to curate condos and disrupt the way they’re bought and sold.
Capitalizing on what appears to be an insatiable hunger for castles in the sky, co-founders, Brandon Donnelly and Mike Lerner, launched Dirt on March 26, 2013. The site is home to a community of people sharing information about condos (new and old) including building reviews, construction update and pricing.
To this day, sale prices are still restricted on MLS, a database of available properties run by the Toronto Real Estate Board (largest in Canada). Historically, the only way to access them was to go through an agent. This is a different story in the U.S. where Trulia and Zillow make it easy for the public to find out what properties have sold for in the past. Baffled by the lack of transparency in Toronto’s real estate market, Dirt empowers sellers, buyers and property enthusiasts to follow a development, upload photos of buildings under construction or reward them with a “prop” (think “Like” button for condos).
Donnelly and Lerner also realized that information on who was buying condos, how many were being rented out and how many were foreign-owned weren’t being collected. Considered a cross between Yelp and Facebook for real estate, Dirt’s crowdsourcing platform has helped unlock valuable data so that consumers get “the dirt” on condo developments.
“We targeted condos because hundreds of people living in the same area meant we had a healthy resource of users to upload comments and share information,” said Brandon Donnelly, CEO and co-founder or Dirt. “If people are willing to share their salaries on social networks like Glassdoor, then they would probably be willing to share property value. All we needed to do was create the right environment to encourage participation.”
Unlike other real estate sites, which the industry uses to promote itself with little to no engagement, Dirt’s value is in the honesty of its users. If a project is terrible then the site will reflect that through comments and ratings. The platform is also diligent about not attracting any unwanted attention. By crowdsourcing data rather than scraping from MLS or any other database, they have managed to fly under the radar and grow on their own terms.
Having already amassed a database of 300 condo buildings and 55,812 units in a little over a month, Dirt’s success can be attributed to the founders’ complementary working style. Donnelly and Lerner met through FounderDating, an online community based out of San Francisco made up of entrepreneurs from different backgrounds and skill sets. The network launched their Toronto chapter last summer and both men were part of the first cohort. When coding started in December 2012, Donnelly’s architecture and real estate background proved helpful in managing the site’s front-end while Lerner, a software engineer, is charged with orchestrating back-end operations. The result is a visually appealing site filled with more than 400 users ranging from high school and college students interested in city planning to professionals in their forties looking to buy property. Thanks to their updates, Dirt has covered mostly all of the new construction projects in Toronto (downtown and midtown).
While the startup is primarily focused on Toronto, expansion plans into Vancouver and New York are next on the list. “Because Dirt is crowdsourced, there’s no reason that we can’t scale and expand into different metropolitan cities,” says Donnelly.
This summer the startup will be focusing on optimization and gradually rolling out a slew of new features.
“Virtually everything we have planned in the next little while is about structuring the data we’ve collected to curate condos better based on pricing, comps, building reviews, developer reputations and so on,” says Donnelly. “I think what we're doing is totally unique and it'll only become more powerful as we continue forward.”
Despite funding the project out of their own pockets, Dirt’s business model is already attracting interest from Canadian and American VCs. They also hope to hit pay dirt with their “Dirt for Developers” program and are in talks with a few established names to build out services that are valuable to them without the hefty price tag.
Dirt’s entry into the marketplace comes at a time where the battle over real estate information is heating up. Most recently, the Competition Bureau and the Toronto Real Estate Board were engaged in a legal battle over anti-competitive practices because of the control and restrictions placed on MLS data. At the end of the day, consumers are the ones suffering from this tight first approach, which seems to be fueled by a fear that openness would threaten privacy. Despite the case’s dismissal two weeks ago, Donnelly is optimistic that sooner or later the Canadian real estate market will follow the example of the U.S. and completely “open up.” It’s just a question of when.