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Real estate industry battle - II

"In Toronto, 20% of realtors with the Toronto Real Estate Board didn’t complete a deal in 2009", says Michael Polzler.

The real-estate industry is no longer only battling with the Competition Bureau. It is now fighting amongst itself, with one of the country’s largest firms starting a campaign against part-time agents. Michael Polzler, head of Re/Max Ontario-Atlantic Canada, launched a new offensive this week with an advertising blitz in the greater Toronto area that says: “Warning! Don’t use a part-time agent.”

The campaign follows a letter Mr. Polzler paid to have printed in The Real Estate Magazine, an industry publication. In the letter, he declares it’s time to “take back the industry” and calls for the creation of new requirements for agents such as increased education, a one-year apprenticeship program and a referral program that would allow inactive realtors to transfer clientele to full-time professionals for a fee.

“I don’t believe part-time agents can do the job,” he said in an interview. “Many consumers use part-time agents without ever knowing it. If an agent doesn’t do at least one deal per quarter, they are not active in the business, excluding the obvious people like managers.

“Someone who has a non-real-estate, full-time job should not be allowed to handle the largest financial transaction most people make in their lifetime. You have taxi drivers with real-estate licences and that’s not cool,” Mr. Polzler said.

Re/Max Ontario-Atlantic Canada’s campaign for more professionalism in the industry comes as the Canadian Real Estate Association (CREA) continues a legal battle with the Competition Bureau.

The government watchdog has launched a complaint with the Competition Tribunal over what it says are anti-competitive practices. The case revolves around the Multiple Listing Service system owned by CREA and responsible for about 90% of the transactions in Canada.

Last week, CREA passed new rules that will allow consumers to decide how much they use an agent on a deal and allow them to conduct parts of a transaction -- including listing on MLS -- without using an agent at all. But the case is still proceeding because the bureau maintains the new MLS rules can be changed by the local boards or CREA itself.

Phil Soper, chief executive of Brookfield Real Estate Services, which operates Royal LePage and La Capitale, wondered whether Re/Max’s proposals would further antagonize the bureau.

“It flies in the face in the face of concerns about competition. We are an industry that is full of diversity. There are many models in which our profession is practiced. To state that lower fee-charging realtors who adopt a different model have no place is similar to saying only high-priced lawyers should exist. You can’t say people shouldn’t have the opportunity to hire somebody who is less experienced.”

Some in the industry suggest Mr. Polzler’s proposed business model is an attempt to squeeze out smaller agents as well as being a marketing campaign for full-service brokers. The industry faces consolidation in anticipation of CREA’s new rules.

But Mr. Polzler says he’s been talking about non-producing agents for a year. He gives the example of Toronto, where 20% of realtors with the Toronto Real Estate Board didn’t complete a deal in 2009. Some brokerages have 70% of agents doing less than a deal a quarter, he added.

“Nobody is suggesting these people not be licenced,” said Mr. Polzler. Part-timers could stay in the industry, but on the referral basis, he suggested.

Don Lawby, chief executive of Century 21 Canada, conceded the numbers of agents in Canada does look odd on the surface. There are 98,000 agents or about one agent for every 336 people, including children and people who aren’t home buyers.

“There are some people who get a licence and just elect to keep it active without practicing,” Mr. Lawby said, adding the qualification for being a realtor should be having a licence and knowledge about the market.

“That could include part-time people,” said Mr. Lawby. “I’m sure there are part-time people who perform in a better fashion than some full-time people.”

Source: Financial Post

March 31, 2010 in Competition Bureau / CREA | Permalink


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It is time to change the industry. We need to give consumers more confidence in us. Get rid of part-timers or change the entry qualifications!

Posted by: Don Edmunds | May 31, 2010 11:52:57 AM

Interesting real estate blog and I will do some research to learn more – keep the good work

Posted by: Sell Home Now | Apr 12, 2010 2:22:19 AM

Fantastic real estate blog. Keep it up.

Posted by: House sale by owner | Mar 31, 2010 8:02:33 AM

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