Members of the Calgary Real Estate Board (CREB) will be voting in March on whether to accept a proposal that will merge the 80-year-old board into the operations of the Alberta Real Estate Association (AREA).
While officials cite gained efficiencies in operations as a positive reason for the move, some Calgary realtors have reservations about the momentous development.
CREB is one of Canada’s largest real estate boards, with about 7,000 members. If members of CREB affirm the consolidation in a vote on March 15, the board will sell off its office building in northeast Calgary, with proceeds being distributed to members based on the number of years of membership.
“First and foremost, I think it’s important to acknowledge and recognize that the Calgary Real Estate Board is one of the best-run real estate boards in North America with the way that it’s run and how forward-thinking they have been and the value that they have been and continue to provide to its current members,” said Justin Havre, a Calgary realtor with Justin Havre & Associates of Re/Max First, who has been a CREB member for 18 years.
“At one point, yes, it does make sense to create one super board for the entire province. The concern is what kind of disruption would there be for members’ experience . . . We know that whenever you (make) any such moves, there’s going to be stuff that’s going to fall through the cracks and stuff that’s going to break. The concern is how and what kind of an impact will that have on the members.”
Havre said the office building is an asset CREB has. The building has been in place for about 23 years.
“Are they going to sell that asset, and then AREA is going to go lease space elsewhere? We are in the real estate business, and we do obviously recommend that real estate is a safe investment,” said Havre.
AREA has a total membership of about 13,000 in the province. All members of real estate boards in Alberta are members of AREA.
Alan Tennant, CEO of CREB, said the proposed consolidation would add the best of CREB’s value proposition to AREA with no change in what members receive with no impacts on the other AREA members.
He said that in early November, AREA and CREB boards of directors approved the outline for the consolidation plan. It was initiated by CREB.
“The reasons for consolidation centre on maximizing our efficiencies, supporting member profitability, also maximizing our opportunities, (greater) risk in threat management and moving to a more responsive delivery model,” explained Tennant.
CREB staff would move with Tennant inside the AREA operations.
“You will see some changes maybe in some of our job titles and our roles. Obviously, there’s no need for two CEOs, so I’ll be taking on a different role. . . . in a senior executive capacity, and our staff and volunteers will see some transition. Some of our volunteer committees will take on a different role because we just don’t need a duplication of some of the standing committees and those kinds of things,” he said.
“We do anticipate that there will be some people that are uncomfortable making the move, whether from the AREA side or the CREB side. That’s a normal byproduct of a merger, but we’re doing our best to minimize that. We really need everybody in order for us to have a smooth transition and keep delivering that value proposition.”
Tennant said a two-thirds majority is required for the vote at a special general members’ meeting to proceed with the consolidation. Members will be able to vote either in person or virtually. There’s been a series of open houses and broker presentations to explain the consolidation plan.
“We’re hopefully an important part of our members’ day-to-day work, but we’re confident as they’ve been able to digest the consolidation plan, they can see that every possibility has been considered and that, in fact, things are important to our members are living on and we hope that’s been fully articulated,” he said.
Brad Mitchell, CEO of AREA, said if people were to set up a real estate industry now as opposed to 75 years ago, they probably wouldn’t do it the same way.
“Having 10 different organizations that all have their own administration, all have their own MLS system, and all administered separately across the entire province doesn’t make a lot of sense in 2023,” said Mitchell.
“Discussions have been going on for a long time, and we think we’ve found a way to maintain regional representation but also deliver efficiencies and cost savings to the members. That’s why from our perspective, it makes sense, and that’s why we accepted the CREB proposal.”
How operations may change
Mitchell said four other smaller real estate boards in the province have consolidated with AREA over the last three or four years – Grande Prairie, Lloydminster, Fort McMurray and the Realtors’ Association of South Central Alberta, which is basically Brooks. Alta.
“This is an operational consolidation which means the administration is going to be consolidated, but the representation won’t be,” he said, adding there will not be a reduction in staff if the consolidation proceeds.
“How we’re going to save money is by consolidating the operations of the two organizations. We both have a call centre. In the future, we’re only going to have one. We both do our own accounting audits. In the future, we’re just going to have one. We both run member management systems. In the future, we’ll just have one. So we have all these contracts where we do the same things with different providers . . .The savings are substantial.”
Mitchell said current fees per year by CREB members, including MLS, are $1,629. He said the new base fee upon consolidation would be $1,199; in the second year, it would be $1,049.
Satellite office model
“AREA elected not to purchase the (CREB) building. All of those funds will go directly back to the members,” he said.
AREA said the CREB building is very underutilized right now. The plan would be to transition to a satellite office model. This would mean that, in addition to AREA’s central location, there would be a couple of other offices spread across the city. The intent would be that members could get the in-person service they receive today at the CREB building, but at closer proximity (for most) and with efficient space usage.
“There are lots of benefits for agents around this, and I think it’s time for real estate, the organizations, to evolve a bit,” added Mitchell. “We’re doing something that hasn’t really been done in Canada yet, and the board of directors at CREB has been really good in working through all of these issues.”
Steve Zacher, a realtor with Re/Max Real Estate (Central) in Calgary, said he is firmly against the consolidation.
“The language that they’re using, it’s not a consolidation. It’s a dissolution. They’re dissolving CREB . . . Just the fact they’re afraid to use that word, it doesn’t give me a lot of confidence,” said Zacher.
Besides the smaller boards that have joined AREA, nobody else, he said, such as Edmonton, has followed this direction.
“Why are we doing this? Our assets are all paid for. We have strong reserves,” said Zacher. “How many people are going to lose their job? None. How many people are going to lose their job at AREA? None. So where’s the savings there? It just doesn’t make sense. For the life of me, I’m trying to figure it out. There’s nothing good in it for either us or our clients.
“They say the building is underutilized. Well, you know what, we’re realtors, and maybe we should look to lease the building if we’re not using it.”
Zacher said many realtors don’t understand the reason behind the consolidation.
“We’re moving backwards”
“They keep saying we’re going to be one voice. We’re at 7,000 realtors. We already have a voice. We don’t really need Medicine Hat or Lethbridge to influence the government. If we need to talk to the government, there’s 7,000 of us,” he said.
“I don’t think it’s good for us. I really don’t. It’s not moving forward; we’re moving backwards. I can see a time where if this goes through that in 10 years, there will be somebody saying we should form a Calgary Real Estate Board to look after our interests.”
Corinne Lyall, owner/broker with Royal LePage Benchmark in Calgary and a former President of CREB, said the consolidation is a positive move.
“My only concern right now is probably the lack of detail, but there are many things I know they can’t answer. Until we’re moving forward, it’s hard to understand what that work chart is going to look like,” said Lyall.
“I think the most important thing that CREB needs to really pay attention to for the members is that feeling that their interests will not be diluted. They still will have all the services that they’re used to getting.”
Less red tape?
Lyall said that over the years, some services had already been moved from CREB to AREA with no negative impact.
She said the benefits of the proposed consolidation also include less red tape.
“This is the future. You can’t stop progress from happening,” added Lyall. “And if you do, the effect is negative. We’re already seeing major organizations (and) boards merge in the States. It’s happening across Ontario. It’s happening in B.C. It’s already happened in Saskatchewan. They have one board, one layer of organizational real estate.
“I do believe that this is a true benefit, and a lot of services that we’ve had to pay in duplicity over the years are ridiculous. The cost to be a member has grown, so it would be nice to see some of these duplicate services get eliminated to only one organization where we’re paying one fee.”
Mario Toneguzzi is a contributing writer for REM. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He worked for 35 years at the Calgary Herald, covering sports, crime, politics, health, faith, city and breaking news, and business. He now works on his own as a freelance writer for several national publications and consultant in communications and media relations/training. Mario was named in 2021 as one of the Top 10 Business Journalists in the World by PR News – the only Canadian to make the list.
Watch out Alberta… And most importantly, watch your data (listings) and make sure it doesn’t turn into a profit-generator for a third party.
What do you think Pillar 9 is? It’s basically a way for boards to skirt competition law
It seems a mystery to me how all of CREB’s staff will keep their jobs if they consolidate with AREA, yet there will reportedly be a significant savings to the CREB membership. Is that because the costs will now be distributed to the rest of AREA’s membership, to pay for this duplicated staff? There are very few details being provided regarding the effects on the other members of AREA and oh, by the way, we don’t get a say about whether or not we think this should proceed.
They won’t keep their jobs, it’s ridiculous to say that to the staff. There is always collateral damage in any merger and this is no different. Mitchell said they’d all keep their jobs but he didn’t say for how long, they need them to go the closing work until the end of the year but after that, everyone is fair game.
Hell why not sell of Calgary (or any other) city hall and merge the staff and sell City Hall and split it up among the people living there based on the time they’ve been living there. This is right up there among the dumbest things I have ever heard of… but I’m only 80 years old.
I also know that the NO votes won’t mean a thing… beware! Being from Edmonton (retired in Mexico) I can’t do anything about it. The area I live in in Mexico has the most functional Real Estate Board in Mexico and that includes Greater Guadalajara just north of us that has the population of Western Canada in it.
Yup that is definitely one of the dumbest schemes I have heard of in my 80 years on this old ball!
Words from AREA’S Brad Mitchel quote: “he said, adding there will not be a reduction in staff if the consolidation proceeds”. In the very next paragraph he states, quote: ““How we’re going to save money is by consolidating the operations of the two organizations. We both have a call centre. In the future, we’re only going to have one. We both do our own accounting audits. In the future, we’re just going to have one. We both run member management systems. In the future, we’ll just have one. So we have all these contracts where we do the same things with different providers . . .The savings are substantial.” These two propositions cannot result in substantial savings when considering his example of two call centers, accounting audits, member management systems consolidating into one, BUT THERE WILL NOT BE A REDUCTION OF STAFF. The bulk of the costs in the operating areas identified are staff salaries & benefits… Brad Mitchell goes on to indicate current annual CREB fees are $1,629 but will decrease to $1,199 upon consolidation and $1,049 in the second year. All of these savings without any details that support the savings even though a fulsome report was to be provided in January 2023. When I asked for the fulsome report, I was advised that as a member, my request for the details was UNREASONABLE. The dissolution of CREB and its insertion into AREA, should not be considered/voted upon until all information is available to allow Members to make sound/prudent decisions.
There will be a reduction is staff, redundancy alone will cause that.
We should be doing this in Ontario. We have 34 boards/associations. That means 34 Executive directors, buildings, accounting systems, training directors etc. etc. The savings would be enormous and the MLS system seamless and potentially OWNED by our association.
I agree With Gord Gerrie Ontario should do the same . I think their would be huge saving s for All
2/3rds for Approval!! that’s the way to do it! TRREB should adopt this model for its Bylaw Changes
Hey Edmonton! Get your Sh_t together and be part of the process or you’ll forever be subject to a system built by and for Calgary. Call for a vote, talk to RAE directors and get a seat at the table, you’ll not get a second opportunity.
Savings with leased satellite offices, I’d like to know how that works.