Most real estate professionals have had some interaction with Toronto-based Teranet over the course of their career. However, few likely know of the growth trajectory that the online real estate services company has taken in recent years.
Teranet, owned by Borealis, the infrastructure investment arm of the OMERS pension plan, has embarked on a program of geographic and platform expansion that has moved it beyond its electronic land registry roots in Ontario into a provider of a suite of value-added services for those in the legal, real estate, government, utilities, and financial services fields.
In May, Teranet introduced ViMO, an iPad app to provide real estate sales agents with a slew of up-to-date market and listing information when they sit down with clients. That same month, the company announced an affiliate had acquired a minority interest in Foster Moore International Limited (FMIL), a New Zealand-based global market player in the government registry sector.
That deal came on the heels of an announcement Teranet had entered into an 30-year deal with the Province of Manitoba to own and operate The Property Registry.
“We are now seeing the fruits of our business development efforts over the last three or four years,” said Lawrence Franco, president of value added commercial solutions with Teranet.
Off the launch pad
Franco noted that Teranet’s growth has accelerated since the 2008 acquisition by Borealis and expects the pace to pick up in future years.
“I would see us in multiple jurisdictions from a land registry perspective; right now we are in two,” he said. “I expect to see our value-added solutions continuing to grow both here in Canada and in those other jurisdictions.
“As we acquire other registry systems, we can also bring the capabilities of those value-added solutions to those other markets and I would also see us in multiple registry offerings, not just land registry, through our investment in Foster Moore.”
Teranet’s strength comes from its status as the exclusive provider of electronic property search and registration on behalf of the Government of Ontario. Over the past 20 years, Teranet, in partnership with the Province of Ontario, has automated approximately six million parcels of land, representing over 99.9% of the parcel base in Ontario.
It touts a 2006 study by the Law Reform Commission of Ireland which ranked Ontario’s land registration system as the best in the world.
Today, Teranet’s electronic products are used by more than 250 municipalities and institutions, 37 real estate boards, and more than 81,000 real estate and land registration professionals, such as lawyers and law clerks, conveyancers, brokers, agents, lenders and insurers.
On the value-added side of its business which Franco heads, Teranet serves four distinct markets: real estate (brokers and agents); financial institutions; the legal community (real estate lawyers); and government and utilities.
Teranet’s penetration into those markets is high. In real estate, for example, up to 50 per cent of Ontario’s real estate industry relies on its data and products. Its workflow software tool for real estate lawyers, Conveyancer, enables roughly 80% of transactions in Ontario among legal professionals, Franco estimates. The company is also the top provider of such software solutions to real estate lawyers across the country.
For financial services institutions, its smallest value-added solutions vertical, Teranet provides an automated valuation model (AVM) and customized software solutions to the country’s big banks and credit unions, and publishes a House Price Index monthly which measure the changes in house values in multiple jurisdictions across the country.
Most of those products complement its formative land registry business.
“We understand the real estate world,” said Franco. “We provide information to realtors to help them do due diligence before they do a transaction, we help the lawyers with conveyancing properties through our workflow tools, we help financial institutions make decisions around adjudicating mortgage risk.
“They all revolve around real estate, where our expertise lies, so when we look at growth for our business, we look for ways to enhance that real estate value chain and for ways which we can create efficiencies in the value chain.”
There’s an app for that
That value-added reasoning was behind Teranet’s recent introduction of the ViMO iPad app for realtors. The company is taking an “information is power” approach to selling ViMO, which will allow agents to wow clients at the kitchen table with current market listing data combined with property sales, market statistics, demographics, schools and other key information.
“ViMO keeps the realtor at the centre of the real estate transaction and makes them the experts in how to promote and sell real estate,” said Franco.
The app came about after Teranet conducted extensive market research and saw there was no product for high-performing realtors (call them the top 20% of producers) to impress clients through instant access to better information and other innovations such as electronic forms (buyers representation agreement being one of the most important for agents).
“So far, we are having tremendous success with it.”
ViMO, which is offered to realtors at a cost of $30 per month, is already being used by hundreds of agents since its launch two months ago. “What we are doing is getting out to brokerages and demo-ing this product, and when we do that, our conversion rates are higher than 50%.”
Beyond ViMO, Teranet is looking to create systems to allow electronic forms, such as a purchase and sale agreement, to move electronically from a brokerage to a legal office to a financial institution.
“We are not quite there yet, but we have the foundation for that and ViMO really is going to help us get traction in that strategy moving forward,” said Franco.
Teranet is looking to expand geographically by building off its exclusive relationship with Ontario. The first step was its purchase this year of Manitoba’s land and personal property registries, but future expansion will not be limited to land registries.
The acquisition of an interest in New Zealand’s Foster Moore, a developer and implementer of online business, secured transaction and occupational registries, will allow it to expand its registry scope.
“We felt that our investment in Foster Moore would allow us to have a deeper conversation with other provincial governments as well as other federal governments globally to say that we have expertise in registration systems.
“Land is our core business, but now we have an offering in these other registries and it has really taken the conversations with prospects to a different level because we have a broader value proposition now to share with them.”
Teranet’s international growth will focus on other Canadian provinces and Commonwealth English-speaking countries such as the United Kingdom and Australia. With respect to land registry, the United States is not yet being targeted given its registry systems operate on a county-by-county basis rather than on a broader state-wide level.
However, Teranet’s new partners at Foster Moore are aggressively pursuing business, secured transaction (i.e. PPSA or UCC), and occupational registries with several American states, the company said.