The three questions I heard most following the publication of my article in REM, The time has come to make a fundamental shift in organized real estate, were:
1. When does the sequel come out?
2. Why should we want to do the things you wrote about in the article?
3. What are you going to do about it?
The fact that you are reading this answers the first question. I will attempt to provide more context in answering the other two.
Why should you care?
So, why should we want organized real estate to move away from the legacy model of protectionism by actually collaborating to better utilize the resources available to us as a whole so that we can actually innovate?
There’s this sense in organized real estate that when we talk about collaboration, we’re automatically suggesting mergers and amalgamations of the many organizations across the country. I’ve always believed that amalgamations will happen at a grassroots level. The boards of directors and members of an organization will see the benefit and move toward action.
That said, organizations resistant to mergers for reasons such as “it takes away their identity,” “real estate is local” or “members NEED local representation” should probably do an environmental scan to ensure they have the necessary resources to manage today’s liabilities and tomorrow’s risk.
Address redundancy to get the right resources & support for realtors
Like other organizations, when we review our risk register, it’s necessary to consider if we have the resources and capacity not only to continue providing the everyday services expected by our membership but also to navigate challenges ahead.
This is asking a lot. It means:
- having a strong internal cybersecurity strategy with confidence that we won’t be the next London Drugs in the national news,
- being prepared for the impact of new technology and AI used by members, consumers and other stakeholders,
- being prepared to support the role of the broker over the next decade with the pressure on that role increasing,
- having the resources to navigate the legal challenges the profession faces,
- having the capacity to work through an increasingly complex regulatory environment and
- having the resources and technology to satisfy the growing demand from regulators and government to ensure data is available to inform policy and rules.
Even if we have the resources to tackle these issues, it does not make sense for multiple organizations to duplicate this work. By addressing redundancy in some of these critical areas, we can create the additional capacity to truly support the realtor community and provide the services they need to navigate the risks and challenges ahead.
Start acting more corporate
In the original article, I made several suggestions on what we could start to do differently, which would help us move the needle on being more collaborative and innovative.
The first is to start acting more corporate. We have a saying in British Columbia, “That’s just playing office.” This comes from often seeing one board paying a neighbouring board for the listings their members are putting on the MLS system, or vice versa. One organization sponsoring an event hosted by another organization. One group contributing to a fundraiser of another group. Every dollar that flows into organized real estate comes from the same place, the realtor, but we act like each entity is somehow disconnected from this reality.
A shift to a corporate organizational model would prioritize decisions that result in efficiency, eliminate redundancy and focus on the interests of the corporation. Considering organized real estate as a collective of corporate entities (which they are) with access to $288 million annually, as referenced in the first article (which they have) — taking steps to build out a corporate organizational model would inherently move us toward innovation.
Stop “playing office,” stop acting like service clubs and start making decisions that are motivated by good corporate practice.
Break down boundaries, centralize & leverage data and information
When we talk about fundamentally shifting organized real estate, the second suggestion in the original article would result in the largest impact toward that shift — moving away from the over-fixation on the existing cooperative construct. Organized real estate represents 160,000 independent business owners across the country. These entrepreneurs have more access to business tools and competitive differentiators than ever before. The cooperative sandbox that we built 100 years ago just isn’t working for today’s playground.
Imagine if we stopped focusing on the cooperative nature of organized real estate and instead considered it a centralization of data and information that can be leveraged to bolster the industry. Data has always been synonymous with MLS systems and real estate boards but its value has always been predicated on cooperation. If you play in the sandbox, you get the benefit.
If we break down the boundaries of the systems to make the data more impactful, apply a corporate mindset to leverage the data beyond what has been done traditionally and remove the cooperative framework that the system currently requires, we will have a robust network of organizations across the country that are leading innovation in the industry to provide:
- better options and opportunities for realtors,
- more robust consumer engagement and
- an ecosystem that is adaptable and ready for the ongoing changes we will continue to see.
What am I going to do about it?
As for the final question posed at the start of this article — what are you going to do about it? This. I am going to do this:
I will continue to be a critic of the industry, as much as I am a champion. I will challenge the status quo by initiating and leading discussions with industry stakeholders across the country focused on eliminating redundancies, learning from each other and enhancing our collective efficiency.
I will also remain actively available to my colleagues nationwide, fostering collaboration, encouraging innovative practices and advocating for strategic shifts that push the boundaries of traditional approaches.
It’s too often that in leadership rooms, we look around for an “adultier adult.” Well, we are the adults. We are the leaders in this industry at this pivotal moment. It’s time for us to engage in these difficult conversations and make tough decisions — even when they’re not universally popular.
By embracing a corporate mindset, we can confidently manage risks, prioritize the corporation’s best interests and propel our industry forward into a new era of innovation and resilience. Together, we will forge our own legacy.
Please note that it’s BCREA policy to not respond to comments on any of its online articles.
As a former managing broker and realtor, Trevor Koot’s nearly two decades in organized real estate gives him hands-on expertise in understanding the profession’s needs. Before stepping in as CEO at the BC Real Estate Association, he served as CEO of Kamloops and District Real Estate Association for four years and Kootenay Association of Realtors for three before successfully merging the two into the Association of Interior Realtors. Trevor’s leadership in the real estate sector began long before his CEO career when he was Chair of the Saskatchewan Real Estate Commission for five years. He played a key role in redrafting provincial real estate regulations during his tenure. Trevor also served two years as Chair of the Governance Committee at the Association of Real Estate License Law Officials.
He holds multiple degrees, from a Bachelor of Science in Kinesiology and a minor in Mathematics through the University of Saskatchewan to a Master of Business Administration degree through Royal Roads University. Trevor is adding to his extensive education through his current pursuit of completing a Master of Laws degree at York University. His daughter, Abby, attends the University of Victoria while he and his wife, Jill, live in Vancouver’s Chinatown.
A change will not save the industry as we know it as an industry that sells 500,000 units a year with 170,000 sales staff is constrained by its own reliance on sustaining 170,000 membership fees.
Annually over half of those members never sell a single unit.
Right now over 70% of membership is not advertising a single listing on realtor.ca. No other industry has evolved into such an inefficient system at the same time as having total control over the market it runs.
The history of the lobbying efforts of organized real estate is recorded in provincial legislation that has given complete control over the market homes are traded in to a single body that being the owners of the MLS trademarks.
Sadly with great control comes great responsibility and the industry has not only failed to embrace that responsibility but used their power irresponsibly to keep the market hidden and secret from the public and more specifically from the Buyer.
AI will revolutionize the industry and wipe out the existing mls system. Questrade buying access to mls data by acquiring Zolo is not a housesigma or redpin or remax, it is a company seeking to transform how homes are traded in this country.
Canada needs a maximum 20,000 brokers handling 50 transaction sides a year.
Negotiating a transaction side a week not only improves the quality of service able to be provided but also allows a massive commission charge reduction to the consumer keeping the industry sustainable and unprofitable for tech startup attacks.
Wow!
Connie W says it right on. To many agents doing nothing and calling themselves Realtors, cannot even be called a profession.
I asked TREB for the stat numbers and none was received, but someone posted of 75,000 or so TREB agents, 35,000 or so sold nothing in 2023!
88% sold 5 or less homes in 2023.
On a Vancouver board, over half, only sold 1 home in 2023. These so called experts in their field are advising homeowners on their single largest asset. Until this is addressed, by the regulatory bodies, to better protect the public, we don’t even have a true professional entity.
The reality is that it is the consumer that provides the copious amounts of money that support ORE and Agents through fees mainly based on a percentage of the selling price instead of a fee for actual services rendered relative to cost of marketing (principally through MLS) and transactional costs. Excellent article at least 20 years too late!
Another side of the story…
Realtors create corporation, then corporation controls realtors. Realtors become employees.
Humans create tools, then corporations controls who has access to the tools.
If realtors choose convenience over freedom , both will be lost.
Example ORWI in Ontario.
The end😁
There are some interesting comments and some great ideas in these two articles, though I tend to take issue with a few of the assumptions of this and the previous article.
The author is right that some of us tend to micromanage and this is rarely productive but to broadly state that our BODs get mired in operations is a huge statement to make. Some organizations are small enough that the BOD must get involved in operations; others, like ours, have sufficient staff to handle most operational considerations.
The same can be said for the comment that board decisions are often made out of self interest and protectionism. I think many of us would agree our organizations, especially the larger ones, appear at times to make self-interested decisions but when I enquired into the facts of some questionable decisions at the local level, I came away with a different point of view. Of course, some decisions by any organization are protectionist but many aren’t. Also, being self-interested is not automatically a bad thing. If we want to protect ourselves, we have to be innovative and serve the consumer.
I very much agree with the author that we need to collaborate more, that seems to be one of the toughest things for human beings to achieve yet it is one of the most productive uses of time. This is, no doubt, one area where protecting our jobs gets in the way. I also agree that we need to reduce redundancies if we are going to compete with the big players entering the field. Redundancies are great on airplanes, not so much anywhere else.
But where I strongly disagree is with the assertion that centralization is the answer to our problems. The United States became the most powerful and free nation on earth because its constitution was built on the premise that justice is best served at the local level. Socialist countries, on the other hand, have failed miserably because central planning is just not responsive enough to local needs. Lo and behold, the same faulty human beings protect their jobs whether they are local or centralized.
We may not have the centralized power of our big competitors but we sure serve local consumers looking for quick, solid advice far better.
I argue our system is a superb system when each level (local, provincial, and federal) plays with their own toys in their own yards. There is no perfect system, there are only trade-offs, but by golly, if we could only put personal interests aside and collaborate more we would be quite a force.
A great article and a good way to begin the conversation.
Trevor i agree with your logic but there are 2 fundamental shifts and perhaps 3 that will save the industry and organized real estate
1 the industry needs to be more pro-active in dealing with the competition bureau in as much as the industry should work toward incorporating the bureaus imposed PROHABITON ORDER into every Provinces REAL ESTATE ACTS , GET the elephant in the room on your side
2 all practicing REALTORS should have to become Brokers and therefore the main BROKERAGE AND BROKER would have to develop systems allowing each independent Broker in their offices to have visual access to each of their established trust and general accounts etc etc But this system is the only way to create business models that work and are profitable and the cost per person will be significantly higher
3 ORGANIZED REAL ESTATE does not need all those Boards and provincial associations , not in todays tech world TOO MUCH REDUNDANCY WILL KILL YOU AND IT IS