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Miniature model home sitting on a laptop keyboard.Amy Walters/Getty Images/iStockphoto

Zoocasa, the online discount real estate brokerage owned by Rogers Communications Inc., abruptly shut down, delivering another blow to consumers looking for low-cost options to buy and sell their homes.

The company sent notes to its real estate agent clients on Tuesday announcing that it was ending its agreements with real estate agents as of June 22, when it would shut down its website and would "cease to be registered and will be prohibited from trading in real estate as a brokerage."

In an e-mailed statement, Rogers communications director Allison Fitton said the company shut down Zoocasa "as the business was no longer a fit with our [Rogers] overall plan for the company at large, and our core areas of focus."

Those familiar with the operations said the company burned through millions of dollars but struggled to find enough customers.

The move by a multibillion-dollar telecommunications company into real estate sent shock waves through the industry, particularly once Zoocasa began offering buyers and sellers a 15-per-cent rebate on the commissions they paid to their agents, sparking ire among some in the industry and putting pressure on other brokerages to lower their fees to compete.

Zoocasa originally launched in 2008 with startup funding from Rogers and initially aimed to be a site where real estate agents would pay to advertise their services to buyers. Launched with much fanfare and a substantial budget, it expanded into a referral service that vetted real estate agents and let prospective buyers and sellers search for a real estate agent using detailed criteria, such as by language or type of property.

It modelled itself after U.S. websites such as Trulia or Zillow, which attract customers by offering data on home sales and detailed demographic information about neighbourhoods and price. But its use of Multiple Listings Service data ran afoul of real estate boards and in 2011 was sued by two real estate agentss alleging copyright infringement.

Two years ago, the company applied for a licence to become its own brokerage, giving it access to home sales data directly from real estate boards. Among its most popular offerings was a daily newsletter with details of recent home sales. It shut down the newsletter in February, in the midst of a court battle between the Toronto Real Estate Board and the federal Competition Bureau over the ways in which brokers share sales data with the general public.

The original vision for Rogers was to be able to cross-sell its telecommunications services to homeowners, offering new buyers introductory discounted Internet and home-monitoring services as a way to expand its customer base. But insiders say that despite a hefty advertising and technology budget, the company never properly marketed its business and traffic to its website quickly began to fall off. One internal survey of visitors to the company's website found fewer than half of customers knew Zoocasa was a referral service or that it offered a rebate on agents' fees.

The demise of Zoocasa is another setback for those in the industry who have been pushing to expand the slate of low-fee online real estate services, many of which are trying to attract customers by providing them with detailed data about home sales in their neighbourhoods.

"This is another indication that the limitations that still exist in the industry relating to data prevent companies from operating meaningful lead-generating platforms," said Lawrence Dale, a Toronto real estate lawyer and former group head of real estate sales at Zoocasa. "If you can't give the consumers the information that they really want, they won't bother coming to your website."

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