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The time has come to make a fundamental shift in organized real estate

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Consider how much realtors pay into organized real estate in Canada each year in regional, provincial and national fees. If we suggest an average of $150 monthly for 160,000 realtors across the country, it really adds up.

There’s a common sentiment that the realtor community in Canada cannot compete with the tech giants that tout significant research and development budgets because we’re just too small. Individually, this is true. But collectively, there’s an opportunity to leverage larger resources to do more.

That said, it’s not just about having one large pot of money; it’s what organized real estate does with that money.

 

The boards’ challenge: Focusing on strategy while dealing with operational issues

 

This pool of fees collected from realtors sustains around 70 boards of directors, staff groups, MLS systems, conference attendance, honoraria, office spaces, reserve funds, etc. It also sustains around 70 strategic plans, each of which, I would wager, says very similar things: platitudes like goals of working with stakeholders, improving member engagement and achieving organizational excellence. 

The ongoing challenge for the boards of directors across Canada is that they often believe they are focusing on strategy but are mired in frequent deliberation over operational matters. This makes sense because the organizations have an operational function in providing services to members. The board of directors, in turn, is made up of members who are also direct recipients of these services.

It is profoundly difficult to disconnect the board from the operational output which would enable exclusive focus on the strategic direction of the organization. This is made even more difficult when we feel invested in the services and meet monthly. 

Do monthly meetings foster strategy or naturally draw volunteer leaders into day-to-day operations? Despite a desire to concentrate on big-picture strategies, frequent meetings and lack of guidance often distract directors to fixate on operational discussions. Every strategic plan in this country is loaded with the words “innovation” and “collaboration.” Yet, because of the system we all work within, one would be hard-pressed to see much of either.

 

Decisions made not by innovation and collaboration but by protectionism and self-interest

 

It may be time that the purpose of organized real estate in Canada materially shifts. Rather than continuing along the same path, let’s change the “WHY.” Let’s fundamentally change the reasons for organized real estate to exist. Ask ourselves, does it solely exist to sustain itself? 

Decisions being made by local boards are often based on protecting their legacy: MLS systems and data. The entire construct of organized real estate has been made up along the way, over 100 years, and now we find ourselves victim to this artificial environment. We end up making decisions not based on innovation and collaboration but on protectionism and self-interest.

 

Big moves in the space aren’t slowing down

 

We’re currently seeing prominent, non-traditional players making big moves in the real estate space — including the likes of Intercontinental Exchange buying Black Knight (provider of Paragon) and Questrade buying Zolo in Canada.

These mergers and acquisitions are not new and certainly won’t slow down. They’re also not motivated by owning new tech platforms; they’re motivated by access to data. That appetite for data infringes on the primary traditional mandate of organized real estate: protect our data at all costs, even from each other.

 

What now?

 

Knowing this, the question is, what now? We need to do two things: actually collaborate and actually innovate.

Let’s start acting like corporations by normalizing and, dare I say, proactively making better use of the annual influx of capital from the realtor community to its organizations. 

Let’s move away from the over-fixation on the existing cooperative construct of organized real estate (which is under threat as it is) and start focusing on centralizing data and leveraging it for the benefit of the industry and consumer.

Let’s stop focusing on legacy and start focusing on leveraging our resources, data and industry to truly compete.

 

As long as the existing structure of organized real estate continues as it is in this country, we’ll spend our resources on the maintenance of that structure. We’ll continue to struggle to find alignment because we’re internally focused. We’ll be challenged to drive strategy because operational considerations will prevail.

Let’s reimagine organized real estate in Canada. Let’s do it all differently.

 

Please note that it is BCREA policy to not respond to comments on any of its online articles.

 


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