DuProprio’s Puzzle
A real estate project in your future? Whether you wish to call a broker to assist you throughout your transaction, or you decided to take the DIY route, many options are available. Unlike Centris, which groups listings from all Quebec-based brokers, DuProprio positions itself as the leader in transactions between individuals. Although popular amongst Quebec buyers and sellers, the business is a confusing puzzle for its action holders.
By definition, a puzzle is a problem that’s unsolvable or really difficult to solve. Is this perfect to describe Du Proprio? After being sold multiple times, it now belongs to Desjardins. Some see a conflict of interest with repercussions on its members and property buyers. Is that really the case? Let’s have a look around DuProprio.
DuProprio’s Story
Founded in Lévis in 1997 by Nicolas Bouchard, the direct real estate sales business DuProprio was first sold to a subsidiary of Power Corporation. This company, which once owned newspaper La Presse, did not manage to make a return on its investment. DuProprio was therefore taken over by Pages Jaunes (Yellow Page), a digital solutions and marketing service. But it didn’t work anymore. Once again, the company was sold to a British group, Purplebricks Group, which itself sold it to Desjardins for $60.5 million on July 15, 2020. While being a headache, DuProprio is also a more than being a headache, DuProprio is finally a buck that has gone through many hands for over 20 years.
A Buyout Strategy
According to Desjardins’s CEO, Mr. Guy Cormier, it was natural that Desjardins supports their members and consumers who wish to buy or to sell a property due to Desjardins’s collaborative nature. For Desjardins’s VP of growth, acquisition and development, Martin Brunelle, it was in line with their diversification strategy. Basically, it was to answer the needs of its members.
However, since the announcement of the transaction, many real estate players and observers have been wondering. Even more since Desjardins became the main holder of Reno-Assistance a website to receive renovation quotes in 2020.
Consequences of the Buyout: An Open Door for Conflicts
Imagine that we are encouraging a DuProprio customer to call Desjardins to finance their mortgage and their insurance. You want to improve your home? No problem, we direct you to RenoAssistance. Don’t you see the risk of a conflict of interest? Also, do you believe that Desjardins isn’t getting any financial gain when you use RenoAssistance? In both cases, the financial institution is cosplaying as an entrepreneur instead of staying in the lane of his main mission. Nonetheless, keep in mind that the true reason of this strategy is the value of your data, the same one that Desjardins was not able to keep safe and which has touched over 8M of people.
Indeed, we can’t forget that Desjardins is financial cooperative. When you join Desjardins, you become a co-owner. Therefore, when Desjardins buy a business like DuProprio or become an action holder of RenoAssistance, it uses their members’ money.
So, we must ask ourselves: is it legitimate that a bank, like Mouvement Desjardins to diversify their activities in the real estate and home improvement area? Why would they want to diversify their area of expertise? For the quality of the data gotten from the diversification. Data that can be used in insurance or investment, for example.
In Conclusion
In 2020, while Mouvement Desjardins was buying out DuProprio in Quebec, she was also buying out PurpleBricks Canada. Now known as FairSquare, Purplebricks Canada was an active brokerage outside Quebec, mostly in Ontario, in Manitoba and in Alberta.
However, we learned that Desjardins decided to close FairSquare last February. Isn’t that puzzling? Let’s bet that this is only the tip of the iceberg!
Want to talk about it? Don’t hesitate to call me: 514-975-1133.
