Happy Canada Day, Fourth of July and Bastille Day! Pretty well covers the majors in the month. I’ll begin by complimenting Heino Molls, Jim Adair and the staff of REM for the 25th anniversary edition. The summary of difference makers in our industry, both licensed and civilian, gave me pause to consider the 44 years I have been an arms dealer in the conflict.
So I quit.
Well, I’ve set a goal.
To taper. That seems to be the dominant phrase of the year.
Starting with my REM columns. This effort is number 235. (Pause for long division and gasp from the reader.) I think 250 is a nice round number although 240 has a certain appeal. However, I think I can dredge up enough for another year and a bit, bringing me to September 2015, plenty of time for REM to plan the usual grand soiree and golden handshake.
Now that the cheering has died down, let me stab a few of my fellow licensees in the eye. Recently I have been forced to file a couple of complaints with our real estate board and one with our provincial regulator. I don’t do this lightly. But when salespeople slip over the line that divides honest mistake from wilful act or omission, our industry deserves respect. It doesn’t get respect when we fail to act because there may be repercussions or the paper work is complex or we just don’t want to get involved or it’s the manager’s job.
So if you fail to do a title search and discover the occupants don’t own the property or you list a renovated mobile home without an electrical safety certificate or you fall afoul of the warranty process on a new home, be prepared to do the time.
What to do?
Can you accept the premise that there are too many Realtors? I don’t mean to imply that top producers aren’t without sin but they are at least around to take responsibility and most likely to be interested in repeat customers. “A good start” is the punch line to that old lawyer joke, edited to ask, “What do you call 100 Realtors at the bottom of the ocean?”
If it is time to clean house, looking around, it’s hard to find those without sin. Regulators could require that licensees be restricted in their employment to real estate only. That was the case in B.C. until pressure from the federal government on inter-provincial trade barriers, amid the red herrings of constitutional challenge and independent contractor, caused the Real Estate Council of B.C. to change the rules. Now you can run into your Realtor at your favourite restaurant or in the checkout aisle.
Of course, brokerages could make that their policy and many do. But the fact remains that part-time members across Canada exist and skim business. I’m surprised the consumer allows the practice. They would flinch if their lawyer or doctor popped up in the drive-through window to ask, “Would you like fries with that?”
Real estate boards and associations could do their bit too. Years ago, listening to the majority of under-achievers, my board eliminated the Medallion Club performance results. Andy Smith, with B.C. Hothouse Foods, offered this insight: “We don’t focus enough on winners. Rather we try to lessen the burden of failure or mediocrity. Why don’t we study and reward winners?” There was a time we could readily determine the number of sales a member had. Now we have to cruise the bus benches to determine which No. 1 is still available for us to claim.
In the local zone or division of our real estate board, year-to-date May 31st, there has been an average of 2.8 completed unit sales per member, a unit being either a listing or selling side. For all of 2013, there were 8.3. Given an average price of around $310,000 for all categories of real estate sales and a commission of $6,700 per side in my business model, then on average, local Realtors grossed $55,610. But of course there’s the old top 20 per cent rule. Our offices’ two top individuals averaged 42 ends, over five times the local average. Other offices will have similar results, leaving no doubt there is a high percentage of licensees who aren’t making a living.
Why are they here? Sadly we are slaves to membership numbers at the regulatory, board and brokerage level. No member, no fee. No licensee, no desk fee or commission split. In a brief conversation on the very high percentage of Toronto Real Estate Board (TREB) members with fewer than five sales per year, Walter Schneider of Re/Max Integra said, “The best thing organized real estate could do is require a minimum number of transactions each year.”
It sounds like a throwaway line but if you consider the result would include tens of thousands of TREB members, it becomes a sobering message very quickly. And let’s not just pick on TREB. They have been the heavy lifter for the country for too long. (C’mon Calgary, Vancouver, let’s have a shot at FINTRAC defiance!) I that suggest all boards and associations do the math with a view to sustainable income and see where their plimsoll line might be.
By the way, Re/Max is no stranger to straight-shooting leadership. In 2000, Dave Liniger was quoted in REM: “Eighty per cent of the people in this business are losers. Eighty per cent of the people in this business don’t need technology – they need a customer.”
Thirty years ago, “Pip” Holmes, iconic Canadian Realtor, past-president of everything including the world organization of FIABCI, said: “So much of what is done today in our business is, because of technology, in the hands of amateurs. It deserves to be in the hands of professionals.”
Thirty years later, the struggle continues.
Contact Marty Douglas by email at [email protected] . Follow or connect with Marty on Twitter, LinkedIn and Facebook. He is a managing broker for Re/Max Ocean Pacific Realty in Comox and Courtenay, B.C. He is a past chair of the Real Estate Errors and Omissions Insurance Corporation of B.C., the Real Estate Council of B.C., the B.C. Real Estate Association and the Vancouver Island Real Estate Board.
