T3 Summit Canada
During the course of the past week, real estate brokers and salespeople of Canada received their own analysis of risks and opportunities when the Canada Real Estate Association (CREA), in association with the Swanepoel T3 Group, released the new D.A.N.G.E.R. Report (Canada Edition) at the Canadian T3 Summit. Featured at the Canadian Summit, was a presentation of the findings of the D.A.N.G.E.R. Report (Canada Edition). The Summit also included a myriad of other topics such as the Rising Expectations of Consumers, New Business Models in Real Estate, and the impact of Regulators in Canada.
Similar to the D.A.N.G.E.R. Report released in the USA in May 2015, which was commissioned by the National Association of REALTORS®, this study was commissioned by the Canadian Real Estate Association.
Comparable to the study of the residential real estate brokerage industry in the United States, brokers and salespeople often view the industry through a distorted lens, based on limited information, a local viewpoint and a lot of conjecture. This Report is a bold attempt to get as many of the industry on the same page and to provide them all an agenda to tackle possible future threats.
What Americans Don’t Know
Most Americans are naive about the Canadian real estate business and assume that real estate business is conducted the same way in both countries. After interviewing over 100 CEOs and broker/owners in both countries, Stefan Swanepoel, the author of both D.A.N.G.E.R. Reports, says there is a very distinct difference between the two real estate markets. “I would say 50 percent is the same, 25 percent is completely unique due to firstly different laws, secondly market size and thirdly oligopolies, and 25 percent represents the same issues, but due to aforesaid uniquenesses, the solutions are fundamentally different.”
The Report identifies 36 separate dangers, risks or threats that real estate professionals should be aware of and consider. “None apply to every local market, but it is incumbent upon every real estate professional to make sure they read this Report to ensure that we are leaving a healthy and thriving industry to the next generation,” Swanepoel said.
In this week’s T3 Navigator we feature three interesting dangers from the report:
Current Baby Boomer Salespeople Are Pushed Out
As a new generation of homebuyers emerges, they are demanding more search options, more mobile solutions, and more online interaction than most real estate salespeople are offering. As the Report indicates “Many Canadian Baby Boomer salespeople continue to cling to their 20th-century approach in serving these consumers as opposed to adapting to the consumers’ changing needs.”
And after two decades of the Internet, online marketing, and mobile technologies, the average salesperson still lags behind where they should be. Technology is a wonderful tool, but it requires everyone involved stepping up and becoming more proficient and more knowledgeable.
Mere Posters and FSBOs Create Unwanted Liability
The term “mere poster” refers to certain brokerages that do little more than place a seller’s property for sale on a board’s MLS® System, making them exempt from some of the regulatory requirements that govern brokerages and their salespeople.
When a buyer’s salesperson then seeks to negotiate the purchase of one of these listed properties, that salesperson is required to create all the paperwork the mere poster did not. This exposes the buyer’s representative to a potential unintended dual agency and increased liability. When a buyer’s representative takes on additional work that would usually be done by a seller’s representative, it could lead to legal liability for that work. Some brokers believe the existence of mere posters is an industry game changer when it comes to liability issues while others consider it to be a red herring.
One New National MLS System
One single national MLS® System would mean that brokers and salespeople would only have to subscribe/belong to one entity instead of some 90 boards/associations should they want access to all the property data in Canada. All property, listing, and marketing data provided would be through one standard, uniform property listing or management software system. However, it is also important to note that the role of existing MLS® Systems includes the facilitation of compensation and cooperation.
This would most certainly remove some duplication in software and listing systems as well as in board/association management. However, no matter which entity moves forward toward creating a national property listing service, there will still have to be a method for addressing and resolving salesperson disputes and compensation issues. Governance issues for a single national property listing service would also be hard to effectively integrate, especially in light of the complexity involved in trying to understand the needs of the varying local markets. Over the long-term, monopolies seldom provide the best products and services at the lowest possible cost.