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CONTENTS
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UPFRONT 04 Editorial
Is foreign investment a good or bad thing for the housing market?
FEATURES
34
DONE DEAL
18
Selling the 65,000-acre, multimillion-dollar Kenauk Montebello estate required a oneof-a-kind marketing strategy
INDUSTRY ICON
FEATURES
36
EXPERT ADVICE Carson Arthur offers 6 ways to wow buyers before they walk through the door
08 News analysis
The sold data debate reaches an apex
10 Mortgage update
Are more regulations on the horizon?
32 What is a 15-minute mortgage?
A look at Centum’s new online lead-generation tool
38 How to become a leading real estate company The CEO of Leading Real Estate Companies of the World explains how Canada fits into its global strategy
PEOPLE 46 Agent profile
FEATURES
40
LENDING SOLUTIONS
Alternative lending moves into the spotlight as more Canadians find themselves unable to qualify for conventional financing
2 www.repmag.ca
What the burgeoning condo market means for your business
FEATURES
Exit Realty CEO Tami Bonnell talks about the unique way the company retains top talent
14
06 Statistics
How one agent is making the most of new drone technology
THE AVERAGE AGENT’S LIFESTYLE
PEOPLE
The future of online real estate in the wake of Zoocasa
12 Technology update
COVER STORY
Ever wondered how you compare to your peers? REP surveyed agents across the country to paint a picture of the ‘typical’ real estate agent’s lifestyle
05 Head to head
After a near-death experience in Afghanistan, former soldier Glen Kirkland found a new life in the real estate industry
48 Favourite things
Vanessa Roman, host of HGTV’s “Reno vs Relocate”
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UPFRONT
EDITORIAL
Fuel to the foreign buyer fire
T
his summer, foreign buyers were once again thrust into the hot seat, as Prime Minister Stephen Harper moved to make one of Canada’s hottest real estate debates an election issue. His campaign promise, announced in August, is that if the Conservatives are re-elected, they would spend half a million dollars tracking and reporting data on foreign ownership. Harper said that if foreign investors are found to be driving the cost of housing to unaffordable levels, the government should find a way to address this. The move has been welcomed by economists, who called the promise very positive, regardless of who wins the election. However, they also have pointed out that any decision on policies to restrict overseas investors from buying
If foreign investors are found to be driving the cost of housing to unaffordable levels, the government should find a way to address this Canadian property should be left until after the data has been collected. Earlier in the summer, China’s plummeting stock market reignited the debate about the influence of foreign investment on the country’s housing market. The decline of the Shanghai Composite has led many to predict Chinese nationals buying Canadian property will soon head for the exits as they look for cash to make up for stock losses. Others are just as convinced there will be no fire sale on Canadian real estate. The discussion also has turned to just how much influence those international buyers have in the first place, and whether more rigorous restrictions on their investments are needed. Regardless, experts suggest that, since many Chinese investors saw surges in stock values last year, they are happy to sit on their now-modest profits. That suggests – fingers crossed! – they’re prepared to hold their Canadian property for the long term as well. Clearly, that kind of steadfast commitment benefits all players in Canadian real estate – especially those agents representing the buyers and sellers. Vernon Clement Jones, editor
www.repmag.ca SUMMER 2O15 EDITORIAL Editorial Director Vernon Clement Jones Senior Writer Jennifer Paterson Writers Olivia D’Orazio Jordan Maxwell Donald Horne Copy Editor Clare Alexander
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UPFRONT
HEAD TO HEAD
Is this the end of the online brokerage? How much is Zoocasa’s demise – and subsequent resurrection – an indication of what’s to come for online real estate?
Dr. John Andrew Real estate professor Queen’s University
Josee Couture
Sales representative Re/Max Hallmark Realty
Dustin Graham
“A challenge for any alternative brokerage is getting a critical mass of market share. Most of these alternative sellers haven’t done well in terms of acquiring any significant market share. It’s difficult when CREA and its MLS product have 90% to 95% of the market. As a buyer or seller, you’re not inclined to go to any other service. Until an alternative brokerage hits that threshold and can have a meaningful number of listings, it will be in a Catch-22 situation, because it’s difficult to grow. It doesn’t bode well for the start-ups, if their business model is competing headto-head with MLS.”
“Zoocasa was never a big player in the real estate industry. There are thousands of agents in Toronto, and less than 400 were registered with Zoocasa. It was fairly insignificant. With the new investment in the site, it’s just going to be like any other brokerage. Zoocasa, at the beginning, was trying to be a brokerage, but it ended up becoming an agent matchmaker. Buying a home is the most expensive purchase people make during their lifetime, and I don’t think it can be done by just looking at listings online. It’s important to work with an experienced Realtor. Buyers who just shop online are missing the experience and could make mistakes.”
“The demise of Zoocasa is something that many could have predicted. The market for online discount brokerages has historically been riddled with failure. The reality is that consumers prefer the more traditional approach to buying and selling homes. The new ownership appears to understand the basic consumer desire for a more full-service and a perceived non-discounted approach. The ‘new’ Zoocasa tries to do what most Realtors do – provide a full end-to-end personal service. I don’t personally think it’ll succeed, primarily because the traditional way of conducting business has always come out ahead.”
Sales representative The Graham Partners
ZOOCASA’S ROLLER COASTER SUMMER Online brokerage Zoocasa, a subsidiary of Rogers, announced in June that it was closing its doors. A Rogers spokesperson said the telecommunications provider made the decision to no longer continue its investment in Zoocasa, and members of the industry lashed out on REP’s online forum, saying that being a real estate agent is about more than just data. Ten days later, Zoocasa was revived when Realtor Lauren Haw and a group of investors purchased the site’s domain for $350,000. The business model has changed, but agents remain watchful.
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5
UPFRONT
STATISTICS
House or condo?
GROWING OPPORTUNITY In most Canadian cities, the sales of detached and semidetached have historically outweighed the sales of condo units, but the figures are starting to balance out, offering agents an opportunity to bolster volumes without leaving their own farm area.
As Canada’s population continues to swell – especially in some of the country’s more metropolitan areas – condos are becoming an increasingly popular option for all demographics FORGET URBAN versus suburban. The newest debate is about property types: specifically, condo (or strata) properties versus detached or semi-detached homes. In most Canadian markets, condos remain an affordable option for first-time buyers, those new to the country and those looking to downsize. However, detached homes remain popular for growing families and those seeking freehold living quarters. While detached properties far outnumber condo units in every Canadian province, the
1
sales and prices of condos are growing, particularly in Vancouver and Toronto. Demand for housing is still driving new single-family home construction in the suburbs, which is currently outpacing condo construction. But strata properties are slowly spreading to some of the country’s suburbs as the inventory of detached properties dwindles, pushing prices up. That’s one trend that’s likely to gather pace in the coming years as condos currently under construction reach completion and developers embark on new projects.
844.4%
19%
Number of updates to the Ontario Percentage growth in occupied Condominium Act since 1998 condo units between 1981 and 2011
Percentage of condo owners who are younger than 35
Vancouver
58.7% 41.3% Victoria
69.2% 30.8%
29%
Percentage of condo owners who are older than 65 Source: CMHC, Canadian Housing Observer 2013
TALL ORDERS IN TORONTO AND VANCOUVER
HOW DO YOU TAKE YOUR HOME?
It’s no surprise that Toronto and Vancouver have some of the strongest condo markets in the country, and condo sales and prices continue to increase
14.1%
11% Single detached
Vancouver
10.2%
Increase in annual sales, 2014 (YOY)
Condo
Toronto
3.8%
5.2%
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Row house, townhouse or duplex
28%
Most homeowners prefer detached properties, followed by condos. But there is still a large portion of Canadians living in row houses, townhouses and other semidetached properties
56%
Semi-detached
Increase in average price, 2014 (YOY) Source: CREA, 2014
6
5%
Source: StatCan, Census 2011
Detached
London and St. Thomas
Condo
93.5% 6.5%
Edmonton
80.8% 19.2%
Newfoundland & Labrador
Hamilton-Burlington
96.2% 3.8%
89.4% 10.6%
Calgary
82.1% 17.9%
90.2% 9.8%
Toronto
76.1% 23.9% Ottawa
Montreal
90.6% 9.4%
Saskatoon
76.1% 23.9%
St. John’s
Saint John
66% 34%
98.2% 1.8% Halifax-Dartmouth
Regina
83.5% 16.5%
91.2% 8.8%
Source: CREA 2014, TREB 2014, GMREB 2014
BUILD UP, BUILD OUT
SPOTLIGHT: EAST COAST
The year-over-year change in building permits paints a varying picture across the country. On the West Coast, more detached properties were being built in 2014 than the year before, but in Saskatchewan, Manitoba and Quebec, growth in permits for condo construction far outpaced that for detached properties
The West Coast tends to dominate when it comes to condo sales, but the East Coast market is slowly growing. However, while transactions have risen, year-over-year prices have dipped
20%
15%
15% 0%
Detached
11%
Other
0%
-19%
ish Brit mbia u l Co
16%
6%
a ert
Alb
n wa che t a k Sas
-11%
-17%
-7%
-12%
-16% -24%
a tob
ni Ma
ario Ont
bec
Que
-16% -23%
-27%
-24%
-43% d ard a i lan t Edw d und dor New wick Sco e o f c a a ns Prin Islan Nov New Labr Bru & Source: CMHC, Preliminary Housing Start Data 2014
Annual sales Saint John 35% Halifax-Dartmouth 3% St. John’s 8% Median price Saint John -4% Halifax-Dartmouth -5% St. John’s -2% Source: CREA, 2013 and 2014
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7
UPFRONT
NEWS ANALYSIS
Sold data debate heats up As a tribunal prepares to hear the case on making sold data public, real estate veterans weigh in on what a decision ultimately means for the industry THE HEATED debate around the release of sold data is about to combust, as the Toronto Real Estate Board finally goes up against the Competition Bureau in a tribunal hearing in October. The long-awaited ruling will determine once and for all whether sold data will remain private or be opened to the public. Regardless of the outcome, many agents are convinced that sold data’s entry into the public domain is inevitable. “Buyers today are choosing to ... be heavily involved in the search,” says Carl Langschmidt, president of
going to allow other people to have access to them,” says Ernie Hawrysh, an agent at Century 21 Gold Key Realty. “We have to operate the system. It doesn’t get cheaper.” He does admit, however, that even agents are demanding more from the system, a point the Competition Bureau is also focused on. A spokesperson for the organization told REP in a statement that TREB’s actions in restricting access to the data are harming competition by preventing real estate agents from offering new and innovative services to consumers through
“There are a lot of agents whose value proposition is still information. They view themselves as the gatekeepers of information ...” Carl Langschmidt, Property.ca Property.ca. “It makes sense that they can use technology to help them do homework and due diligence on a property.” But most agents disagree, pointing out that allowing public access to the system could create a host of problems. “An investment has been put in by all the agents in paying for these systems to operate, and there should be compensation if we’re
8
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the Internet. Indeed, south of the border in the US, data flows much more freely, paving the way for a range of smartphone apps and websites that build on that data and offer consumers access to things like proximity to schools and crime rates. While some of these types of technologies are becoming available in Canada,
they are thwarted by the fact that the underlying data is not widely open to the public. “MLS has been caught in the dark ages,” says Dr. John Andrew, a real estate professor at Queen’s University and director of the school’s Real Estate Roundtable. “If it was really willing to compete and wanted to protect what it has, it would have done a lot more in developing that kind of technology. “If it made that data freely available, these various apps would pop up overnight,” he continues, “and there’s no reason those couldn’t be added on to the MLS system. But it’s not doing that at all. As a result, the system today looks pretty much exactly how it looked 15 years ago.”
ROOTS OF THE COURT CASE
While Andrew says transparency is a good thing for the industry, he also admits that the way the Canadian Real Estate Association, via MLS, has protected its data over the
product, and it’s not really willing to share much of the data.” One reason many real estate agents are against the sharing of sold data is that
“An investment has been put in by all the agents ... and there should be compensation if we’re going to allow other people to have access ...” Ernie Hawrysh, Century 21 Gold Key Realty years is an effective business strategy. “It essentially has a monopoly,” he says. “But it’s legal, in the sense that it developed that
providing and contextualizing the figures on what houses actually sold for is a key part of their value-added service model.
May 2011
An application is filed with the Competition Tribunal to challenge the restrictions TREB has imposed on its members’ use of data in the MLS system
April 2013
The tribunal dismisses the application
January 2014
An appeal to that decision is heard by the Federal Court of Appeal [FCA] in Toronto
February 2014
The FCA refers the application back to the tribunal
March 2014
TREB files an application for leave to appeal the FCA’s decision to the Supreme Court of Canada [SCC]
July 2014
The SCC denies TREB’s application for leave to appeal
September– October 2015
The tribunal will reconsider the Bureau’s application in a rehearing that begins September 21 and ends October 5
October 2015
A decision is expected from the tribunal about the future of sold data
“There are a lot of agents whose value proposition is still information,” Langschmidt says. “They view themselves as the gatekeepers of information and view their job as helping people price a property.” Hawrysh adds that home sellers are biased and don’t have the expertise to list their own homes. “Your own personal house is always the castle,” he says. “You will always price it at the maximum because you’re a biased appraiser. Those numbers won’t be realistic.” REP
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9
UPFRONT
MORTGAGE UPDATE NEWS BRIEFS Feds could consider more mortgage changes
The federal government is reportedly undertaking consultations to determine whether it should impose new mortgage rules to help take the heat out of the real estate market, according to the Financial Post. It said Ottawa is considering a range of changes, including raising the minimum down payment, tweaking mortgage insurance, imposing a 20-year maximum amortization and bringing in specific conditions on high-value housing. If the reported consultations lead to changes, homebuyers would face more difficulty in being approved for a mortgage. The Department of Finance denied the report.
Bank of Canada hopes cut will stimulate economy
The Big Five banks reacted quickly to the Bank of Canada’s decision to cut interest rates in July, but mortgage brokers suggest the lowering of rates will have little impact on the market, except to attract homebuyers who are currently sitting on the sidelines to finally get in the game. In a statement, the BoC said, “Canada’s economy is undergoing a significant and complex adjustment. Additional monetary stimulus is required at this time to help return the economy to full capacity and inflation sustainability to target.”
Low mortgage rates helping affordability The affordability of homes across Canada was mostly unchanged in the first quarter of 2015, activity that was largely down to lower mortgage rates, according to a report published in June by the economics research arm
10 www.repmag.ca
of mortgage lender RBC. The report showed that, between February and May, sales increased 11.2%. With limited signs of stress being exerted on homebuyers outside the whitehot Toronto and Vancouver markets, RBC’s measures are still quite close to their long-term averages, suggesting that current conditions are within historical norms.
Mortgage increase would hurt homeowners
More than a third of homeowners would encounter financial difficulty if their mortgage increased by just 10%, according to the recent Manulife Bank of Canada Household Debt Survey. A further 15% of respondents said they would not be able to absorb any increase in their mortgage payment. The survey also found that 56% of Canadian homeowners reduced their mortgage debt in the past year, paying down an average of $6,300. Nearly a fifth (18%) made an extra lump-sum payment, while 17% increased their regular payment, and 5% did both.
Most first-time buyers consulted a broker First-time homebuyers consulted an average of 1.2 mortgage professionals and obtained 1.7 mortgage quotes before purchasing a home, according a recent survey from the Canadian Association of Accredited Mortgage Professionals. Nearly two-thirds of first-time buyers (61%) consulted a mortgage broker (and 39% obtained their mortgage from that broker), while 75% consulted a bank representative. The survey also found that fixed-rate mortgages are the most common type (72%), while 21% of borrowers opted for variable- or adjustable-rate mortgages.
The mortgage insurance risk enigma Are proposed reforms to backstop mortgage insurance risk just more regulations the industry doesn’t need? A new report published by the CD Howe Institute proposed that mortgage insurance be separated from the CMHC and moved into a new fund to protect taxpayers. According to the report, if unemployment rises and house prices fall, Ottawa would have to pay out $9 billion to cover mortgage defaults. “Our analysis indicates that a low-probability, but severe, housing crash could result in roughly $17 billion of losses for mortgage insurers,” said Thorsten V. Koeppl, one of the report’s authors, in a statement. Industry professionals believe the risk, in reality, is very small, even with a significant correction. “The word ‘correction’ presupposes that something is wrong, and I think the math shows today’s prices are simply the new normal – and still have room to run,” says Dustan Woodhouse, a mortgage broker with Dominion Lending Centres. Though the report did say that Canada’s mortgage insurance system is architecturally sound, it suggested three reforms that it believes would reposition the system to better address the risk of a severe housing crash. Those include redesigning the government backstop as a stand-alone fund that accumulates reserves in advance of a housing crisis, up to a target level, and has the capacity to borrow against future revenue if needed. The report also advocated mandating the Financial Institutions Supervisory Committee
Q&A
to oversee the backstop fund, and making the backstop available for the residential ownership market only. Some brokers, however, remain unconvinced that more regulation is necessary. “My
“The largest risk to the housing market is further overzealous regulation” view is that the largest risk to the housing market is further overzealous regulation – in particular, further restrictions at the wrong end of the market, such as the first-time buyer,” Woodhouse says. “We need the new entrants into the market; they are vital to not only move up buyers looking to sell, but also to our economy, which relies on construction of new homes for new household formation – numbers that are projected to continue to rise.” The federal government has already imposed significant regulatory tightening on the mortgage market since 2008, he adds, much of it done for the optics as much as anything. “Canadians don’t miss mortgage payments, and Canadians don’t max themselves out,” Woodhouse says. “The debt-to-income metric thrown around is a weak measure and means little.”
Kelly Hudson Mortgage expert DOMINION LENDING CENTRES AEGIS MORTGAGE SERVICES
Educating clients on collateral charge mortgages What is a collateral charge mortgage?
Years in the industry 3 Fast fact In addition to helping people achieve their dream of owning a home, Hudson also advocates for people adopting rescue dogs
It is method of securing a mortgage or loan against a property that allows the borrower to tap into the equity of their property without incurring legal fees later on. These mortgages are not new; RBC, BMO, CIBC and the credit unions all offer them, but they were first introduced in October 2010 by TD Canada Trust.
How does it differ from a conventional mortgage? A collateral charge is non-transferable, which means it can’t be assigned or transferred to a new lender like a regular mortgage. For a borrower looking to switch to a new lender at the end of their mortgage term, a collateral charge means they can’t switch without having the mortgage re-registered, thus incurring new legal fees and appraisal costs. It is also unlike a standard mortgage because it is readvanceable, which means the lender can loan more money after closing without the borrower needing to go back through a lawyer, as long as the borrower can service the new debt.
Which type of borrower does it suit? It offers a lot of flexibility, so a buyer who wants to redo the kitchen three years after purchasing a home can roll it into the mortgage, assuming they can service the higher debt. For buyers who aim to pay off their homes as quickly as possible, it might not be the right option. If they want to be open to moving their mortgage at renewal and shopping all the lenders for a new rate and term, then having a collateral charge wouldn’t be the right fit because the borrower is locked in with their lender.
What are some of the hidden challenges? Sometimes collateral charges allow the lender to do things like change the interest rate, increase the loan amount and use the equity to pay down other debts the borrower might have with the lender, should the borrower default on those debts.
Why is it a hot topic right now? I think there are a couple reasons. One is because there has been a lot of negative press about them in the past few years. CBC News’ “Marketplace,” for starters, did a piece on an undercover consumer getting a collateral mortgage through the bank, and it didn’t go well for TD. Another reason is that consumers are becoming more educated about mortgages. We’ve seen a lot of changes to the mortgage rules over the past years, as well as a big shift on interest rates. Because of this, I think we’ve seen a lot of consumers take a more inclusive role in the mortgage decision process.
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11
UPFRONT
TECHNOLOGY UPDATE
The future of online brokerages The summer has been tumultuous for one online brokerage – but is that a sign of things to come?
The same week Zoocasa came back to life, Yellow Pages shared the news that it had purchased the online real estate platform ComFree/DuProprio Network for $50 million, marking the latest growth in its digital strategy. It is the fourth most visited network of real estate properties in Canada, generating more than $40 billion in revenue last year. The addition of the network is the latest in Yellow Pages’ move to accelerate its digital transformation by creating marketplaces that help Canadians transact with their local neighbourhoods, according to CEO Julien Billot.
“[Agents] are going to say whatever they are going to say, but I’m proud of what we accomplished” Zoocasa looked as if it might be the first in a domino-effect finish for web-based real estate buying and selling. The online brokerage, which was owned by Rogers, shut its doors in June. Darryl Mitchell, broker of record for the online brokerage, told REP, “We worked hard to provide quality leads, and the stats show that. [Agents] are going to say whatever they are going to say, but I’m proud of what we accomplished.” But just two weeks after the plug was pulled, Zoocasa was revived when Realtor Lauren
NEWS BRIEFS
Haw and a group of investors purchased the site’s domain for $350,000. Haw said that, going forward, the site will focus only on GTA properties, at least until it rebuilds with new agent clients and online listings. “Our mission is to give homebuyers access to the best possible real estate tools and information while providing a premium level of in-house customer service – and that means building a team of professionals who can adapt to changing consumer expectations,” Haw told the Toronto Star.
New app could be the ‘Tinder of real estate’
Pocket Homes, a new app created by a pair of Calgary entrepreneurs, is being called the ‘Tinder of real estate’ because it offers the same yes-no swiping interface as the popular dating app. But it doesn’t look like the app is aiming to replace real estate agents – it simply allows homebuyers easier access to the opinions of their friends and families. “Pocket Homes makes the process a lot less daunting and allows people to quickly get opinions from the people they want to hear from,” said CEO Matt Diteljan.
12 www.repmag.ca
“As demand for comprehensive and cost-effective real estate services continues to grow, we will actively leverage our national reach and relationships to enrich ComFree/DuProprio’s value proposition, extend their offerings to homebuyers and sellers Canada-wide, and deliver sustainable digital revenue growth for our company,” Billot said in a press release. Both the resurrection of Zoocasa and Yellow Pages’ push into the online real estate space signal that, despite the ironclad protection over sold data, competitors insist on challenging a status quo that works, according to most agents.
Fraud worries mount with new e-signature rule
As of July 1, changes to the Electronic Commerce Act now allow buyers and sellers in Ontario to use electronic signatures in real estate transactions. Most agents expect the change to make things easier and more efficient, but it’s also raising concerns about potential risks of fraud. “It’s more realistic for this time, but the concern is that people are going to have to take steps to protect themselves and use privacy measures,” said one Toronto-based agent. “People could be opening themselves up to fraud.”
Q&A
Paul Rouillard
Using drones to sell real estate
President FLATPRICE.CA
Years in the industry 12 Career highlight Selling $14 million in volume in 2014
How and when did you start using drones in your real estate practice?
How can drone technology simplify the sale of a property?
In August 2014, I was visiting my parents, and we were watching a television program on real estate. A commercial came on about being creative and being different, and promoting the use of drones. My Dad suggested I buy one. We got online right away and bought a drone within the hour.
I have global clients who are purchasing investment and waterfront properties. I can now give them a complete aerial tour of the property, including the rooftop, neighbourhood, yard and a complete scan from above, including the interior – and they don’t have to leave their computer. Many clients purchase properties without seeing them, because the technology gives them everything they need.
What are the benefits of using drone technology? In business and sales, creativity sells. Being different always puts you above your competition. I got my licence 11 years ago. I started when I was 23 years old, and nobody wanted to do business with me. I was forced to try to be different and innovative, and come up with new strategic ideas. I felt this was where I could be different and give my clients more. I can feature properties differently than the rest of the market.
What kinds of challenges have you experienced in using drones? From when I started, Transport Canada has made changes, which ultimately changes my platform. It’s still making changes. New regulations are coming. The danger and the liability risks are substantial. I’ve got to be very cautious when I’m flying. It’s not your regular video game, though you may feel like it with the remote in your hand. This is not a ‘fun’ business; it’s serious.
3D technology to have an impact on agents
More agents are using 3D technology to create virtual online tours that simplify the home-buying process, add value for the buyer and give themselves an edge over the competition. The technology also allows agents to use still images from the 3D experience in MLS listings. “It’s been a really helpful tool and one that offers some kind of standardization,” said Justus Smith, a Regina-based agent. “The fact is, agents aren’t commodities; we have to use different ideas to generate clients and value.”
What do you expect for the future of drones in the real estate market? I don’t think it will become the norm. The laws are changing quickly. For commercial use, it could be outlawed. I think it’s going to be tough to do these things, and the prices will be high for those who can. Transport Canada doesn’t know how to manage it. It’s overwhelmed by how rapidly drone use is growing, but I think the business needs to be regulated before accidents happen. I think there should be a licensing system in place. I’d happily pay $100 to become licensed. I’ll just forward this cost to my clients and bill it into the cost of doing business. This will keep the business safe with mature pilots who are serious about the business. Transport Canada should also charge us to file certificates and flight plans.
BCREA developing new interactive tools
As part of its new 2015-2020 Strategic Plan, the British Columbia Real Estate Association will develop a range of tech tools aimed at helping to ease the buying and selling experience for agents and their clients. The new tools under development include Transaction Mapping, which will create an interactive represen tation of the transaction process to track the journey from beginning to end, and Realtor Match, an online tool that will help clients connect with the agent who best meets their needs.
New platform to centralize multiple offers
A new registry service designed to centralize and standardize offers from multiple buyers could be a solution for agents and buyers who are frustrated by phantom bids and hidden offers. DealDocket will provide agents with a host of digital tools, including the ability to store and counter offers. “Typically, agents can get multiple offers, and the clients don’t get to see just how many offers there are, so we believe this platform could change the industry and bring some transparency,” said Drew Donaldson, co-founder of DealDocket.
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PEOPLE
INDUSTRY ICON
FINDING HER HOME Exit Realty International CEO Tami Bonnell talks about her unusual introduction to real estate, the company’s Canadian roots and her family of lethal weapons
TAMI BONNELL exhibited an entrepreneurial spirit from a very young age. She was 13 when she started her own company, cleaning houses in a subdivision in Burlington, Mass.; by the time she was in high school, she was selling houses. Her memorable introduction to the world of real estate sales came when she was hired to clean a newly built house while the Realtor and buyers were doing their final walk-through. “The wall between the kitchen and the dining room was supposed to be an open concept, but [the builder] had made a mistake,” she remembers. “The buyers were screaming and the Realtor was screaming. They ended up slamming the door and leaving, and I just kept sitting in the window, hoping I was invisible.” The project ended up being delayed, and in frustration, the builder put his fist through a wall, breaking his hand. He asked 13-year-old Bonnell to drive him to the hospital. On the drive, the builder complained how incompetent everyone was, while Bonnell wondered how difficult it could be to sell a house. By the time the builder had returned to the subdivision with a cast on his hand, he had offered Bonnell a job helping him sell houses. “I started working for him on weekends, making $500 a house,” she says, adding that it’s legal in Massachusetts for a minor to sell on-site for builders, as long as they
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don’t represent anybody else. (Note: It’s not, however, legal to drive a car.) Whether it was kismet or simply being in the right place at the right time, Bonnell knew immediately that the real estate industry was where she belonged.
Re/Max International and Exit Realty International – but she calls her working relationship with Exit Realty a “pure love affair.” She started as a regional owner in 1999, became the US vice president in 2000, president in 2001 and CEO of the whole company in September 2012.
The business of real estate However, Bonnell soon realized she liked the business side of the industry better than real
Taking the exit Founded in Canada in 1996, Exit Realty
“In Canada, the majority of our offices have dominant market share, and we have the second highest per-person productivity in the country. We’ve grown tremendously there” estate itself, so she took a job in banking at Merrill Lynch – but fate soon put her back on the path to real estate. Merrill Lynch started acquiring real estate companies, and when management became aware of her history, they realized she just might have a knack for it. “So for the last 30 years of my career I’ve been merging and acquiring companies, selling franchises, selling regions, and building brands,” she says. Bonnell was instrumental in building three major brands – ERA International,
International’s head office is still in Mississauga, Ont. “The first office, the first people to join the company – they all came from Canada,” Bonnell says. “In Canada, the majority of our offices have dominant market share, and we have the second highest per-person productivity in the country. We’ve grown tremendously here.” The similarity between the Canadian and US real estate industries is one of the reasons the company has seen such tremendous growth across North America. “There are
PROFILE Name: Tami Bonnell Title: CEO Company: Exit Realty International Years in the industry: 30+ Fun fact: Bonnell, her husband and her three children are all involved in martial arts. “Everyone in my house is a registered lethal weapon,” she says. “[My husband and I] referee, coach and mentor people. It’s exactly what I do at work. I mentor people and coach new regional owners and franchisees to help them do better … that really is the role. That’s the common ground with martial arts; everyone comes across that threshold to be better.”
PEOPLE
INDUSTRY ICON TAMI BONNELL’S CAREER PATH
more restrictions and regulations in the US than in Canada, as far as real estate goes, but the concerns are the same,” Bonnell says. “I was just at a national CEO meeting with people from the Boards of Realtors and the MLS in both countries. When they came together, they realized that the major concerns in both countries were the same.” Two of these concerns are succession
for as long as people continue to stay with the company. So we’ve created a succession plan.” Exit Realty also has a focus on millennials. “They want to get in the game; they want to have a vested interest – 50% of them want ownership in a business,” she says. “They are very high-tech, and we are a very high-tech, high-touch company.”
“If I’m making $150,000 and you’re making $50,000, it’s in my best interest to teach you to do better, because I get better at my job by helping you, but I also make more money by helping you” planning and how to attract millennials to the profession. At Exit Realty, Bonnell has been integral to the development of programs and systems that address both concerns. Agents are provided with the opportunity for residual income, as the company rewards people for the percentage of the organization they help to build. For instance, if Bonnell introduces an agent into an Exit Realty office, she would receive the equivalent of 10% of that agent’s gross commission, up to $10,000 a year, for every year the agent works there. When she retires, she still earns 7% of that agent’s gross commission. “It works amazingly for succession plans,” Bonnell says. “Half of the franchises that we’ve sold in the last two years, we’ve actually acquired other companies with them, because brokers don’t have a succession plan. This gives them the opportunity to make sure their people are taken care of and to continue to make money off the top of what they built
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1988 Franchise sales, mergers and acquisitions, ERA International
1993 Franchise sales, mergers and acquisitions, Re/Max International
1998 Regional owner of New England, Exit Realty International
The brand builder Bonnell’s three previous roles were at companies she calls cutthroat, where people didn’t like working together as a team. But at Exit Realty, “I can honestly tell you that if I introduce you into the company, it’s now in my best interest,” she says. “If I’m making $150,000 and you’re making $50,000, it’s in my best interest to teach you to do better, because I get better at my job by helping you, but I also make more money by helping you.” But does she miss that adrenaline rush of selling a property, the one she first experienced when she was 13 years old? “I get to be in sales, selling franchising and helping to change people’s lives,” she says. “I get to be in touch with it and go to our offices. I get to be around it all the time. It’s an amazing business; it’s responsible for the number-one dream – to own a home – and I don’t think that ever gets old.” REP
2000 Vice president, Exit Realty US
2001 President, Exit Realty US
2012 CEO, Exit Realty International
FEATURES
EDUCATION
Why an agent’s credentials matter TOO OFTEN, selling real estate is seen as a soft skill set. But in today’s marketplace, consumers expect increasing value for the services provided. Those new to the industry can present themselves as extremely competent, but they may not have all the skills needed to succeed. Short courses and seminars are great, but it’s more essential to earn creden-
tials that provide additional grounding and recognition, and reflect market needs. In specialized areas, such as working with seniors, international buyers or first-timers, consumers want to engage a professional who fits their unique requirements. Credentials that reflect these specialties show clients that they are working with someone they can trust to
protect their best interests. Real estate boards across Canada recognize the advantages of advanced credentials and are making the courses available to their members. A higher level of qualification is also beneficial for the long-term sales professional. The nationally recognized FRI designation offered by the Real Estate Institute of Canada provides recognition of knowledge and skills gained through work experience. The program covers topics such as negotiating, contracts, real estate law, human behaviour and ethics in greater depth to benefit the experienced professional. The FRI designation is a clear differentiator that raises the bar of professionalism. The job of selling real estate has grown into a sophisticated career. Advanced education and credentials provide a solid way for agents to remain viable and competitive. REP
Aim High
Achieve More Build your niche with courses leading to credentials specializing in the buyers (ABR®), sellers SRS), seniors (SRES®) and international (CIPS) markets, and more. Enhance your business profile with the exclusive FRI designation. Learn More, Achieve More
with the Real Estate Institute of Canada (REIC).
www.reic.ca
1.800.542.7342 infocentral@reic.com
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FEATURES
COVER STORY: AGENT LIFESTYLE
A peek into the average
AGENT’S LIFESTYLE Admit it: You compare yourselves to your peers. Whether it be the number of transactions, social media presence or the kind of suit your fellow agent is wearing, it’s hard not to compete in such an entrepreneurial industry. So how do you stack up? Olivia D’Orazio reports IN AN industry first, REP is pulling back the curtain to reveal the secret elements of the real estate agent’s lifestyle, from money matters – such as how much the average agent has in savings, home equity and investments – to less sensitive subjects, such as vacation habits and the kinds of cars they drive.
We encourage readers to take a good hard look behind that curtain, but be warned: What you see might encourage you to work a little harder. And you’ll be able to compare your lifestyle to more than just your own peers. This year, two of our sister publications –
Canadian Mortgage Professional and Wealth Professional – have run similar lifestyle survey findings in their own pages, so we borrowed some facts and figures to see how real estate professionals stack up against their counterparts in the financial and mortgage industries, too.
DEMOGRAPHICS AGE BREAKDOWN Agents between 55 and 59 years old are slightly better represented than other ages
4.7%
30 to 34
3.3%
18 to 29
5.2%
35 to 39
8.9%
14%
40 to 44
15.3%
50 to 54
12.3%
55 to 59
45 to 49
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70 to 74
11.4%
65 to 69
16.1%
18
4.8%
60 to 64
2.2% 75 or older
Yukon
56%
0.1%
of agents are
British Columbia
MALE
17%
Alberta
Newfoundland
8.8%
0.6%
Manitoba Saskatchewan
1.2%
Quebec
2.4%
61.3%
44%
Prince Edward Island
4.9%
Ontario
0.6%
New Burnswick
PROVINCE BREAKDOWN
1.1%
2.1%
FEMALE
67% of financial advisors are male
58% of mortgage
nts work 92% of aegecity where within they live th
of agents are
Nova Scotia
brokers are male
CITY BREAKDOWN
Survey respondents represent more than 270 different cities, including:
Toronto
Ottawa Vancouver Mississauga
Hamilton Edmonton
Calgary
Kelowna
London Montreal
Regina
Oakville
Saskatoon Victoria
St. John’s
Halifax
Charlottetown Nanaimo Winnipeg
Saint John Whitehorse
10.2% 6.1% 3.3% 3.4% 3.1% 2.5% 2.5% 2.1% 1.6% 1.2% 1.1% 1.0% 0.9% 0.9% 0.8% 0.8% 0.7% 0.6% 0.6% 0.4% 0.1%
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FEATURES
COVER STORY: AGENT LIFESTYLE
WORK LIFE 32.1%
EXPERIENCE Most real estate agents have a decade or two of service under their belts
77.9% of agents entered the real estate business as a second – or third – career
have between 11 and 25 years of real estate experience
22.6%
22.1%
have been in the business for 26 to 45 years
have between six and 10 years of experience
16.6%
have between three and five years of experience
5.9%
are still on probation, with two years or fewer under their belts
22.8% of agents are legacy sales reps, following their families’ traditions in real estate
88%
of mortgage brokers work full time
97%
96%
of financial advisors work full time
are full-time agents
Based on our survey results, it would appear the contentious issue of part-timers versus full-timers is a molehill, not a mountain – a staggering majority of respondents are, in fact, full-time 20
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“I think Realtors should be full-time – dedicated, trained and professional. I don’t think you can give full your commitment being part-time” Debbie Hanlan, Debbie Hanlan Real Estate, St. John’s AVERAGE NUMBER OF DEALS PER YEAR:
AGENTS REPRESENT A DIVERSE LIST OF CANADA-WIDE BROKERAGES Some of the most popular include:
49%
21.3%
ROYAL LEPAGE 32.7%
24.9% CENTURY 21 9.6% COLDWELL BANKER 5.9% HOMELIFE 2.5% SUTTON GROUP 1.7% KELLER WILLIAMS 1.5% RIGHT AT HOME 1.4% HARVEY KALLES 0.5% EXIT REALTY 0.4% CHESTNUT PARK 0.3% SOTHEBY’S 0.2% VIA CAPITALE 0.2% RE/MAX
16 or more
11 to 15
19.1%
6.6%
5 to 10
3 to 5
2.5%
1.4%
1 or 2
None
HOW DO AGENTS GET THOSE DEALS? BY MARKETING LIKE MAD.
19.2%
of agents spend more than $10,000 on marketing each year
20.6%
of agents spend between $5,000 and $10,000
34.8%
of agents spend between $1,000 and $5,000
12.8%
of agents spend between $500 and $1,000
8.5%
of agents spend between $100 and $500
4.3%
of agents spend less than $100 each year
14%
More than
of agents work with regional or independent brokerages www.repmag.ca
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FEATURES
COVER STORY: AGENT LIFESTYLE
MONEY MATTERS NEARLY HALF OF AGENTS EARN SIX FIGURES EACH YEAR
$150,001+ 25.1%
$483,000
average amount a financial advisor has in savings and investments
$101,000–$150,000 21.6% $81,000–$100,000 12.6% $61,000–$80,000 17% $41,000–$60,000 11.8% $0–40,000 11.9% SAVVY SAVERS Agents might have a reputation for flash, but most also have some money socked away in savings $1 million or more
6.8%
Less than $3,000
17.4%
$5,000 to $20,000
11.8%
$550,000 to $900,000
Many of those with small amounts in their savings admitted to having just purchased their first homes
19.8%
$110,000 to $200,000 $60,000 to $100,000
12.4%
53%
of mortgage brokers will be ready for retirement by 65
$240,000 to $500,000
AMOUNT IN SAVINGS AND INVESTMENTS
12.2%
$324,000
Average amount a real estate agent has in savings
4.4%
$25,000 to $50,000
$312,000
average amount a mortgage broker has in savings and investments
15.2%
39.3%
of agents will be set for retirement by 65
34.9% 25.9% won’t be
“It all comes out of sacrifice. As with any sales job, if you put in that much time, you’ll make a lot of money” Neres Sraidarian, Big City Realty, Toronto 22
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are unsure
estate 77% of repalal n to be agents g past 65 workin way any
REAL ESTATE AND MORTGAGE MATTERS OWNING A HOME Nearly a third of agents report that they’ve paid off the mortgage on their principal residence
WHO SOLD YOUR HOME?
70.1% of respondents used a real
estate agent to buy or sell their own home
29.9% of agents felt comfortable
27% 16% 10.7%
7.2% 8.2%
doing it themselves
0-10%
15-25%
30.4%
30-50%
55-70%
75-98%
100%
CHESTNUT PARK REAL ESTATE LIMITED, BROKERAGE
INVEST IN STYLE Stay tuned for the fall edition of Chestnut Park’s Invest In Style magazine. Landing on doorsteps near you. This beautiful publication includes feature articles and boasts some of the finest homes and recreational properties in Ontario.
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FEATURES
COVER STORY: AGENT LIFESTYLE 48.2% OF AGENTS OWN RENTAL PROPERTIES Of those who own investment properties:
47.7% own 1 rental property 21.1% own 2 11.7% own 3 19.5% own 4 or more 45.6%
prefer the country
54.4%
of agents are city dwellers
, On averagroekers mortgageinbterest pay an f 2.5% rate o
62.8% of agents have a mortgage, but their rates vary
1.9%
of agents pay less than 2%
19.9%
of agents pay between 2% and 2.49%
41.9%
of agents pay between 2.5% and 2.99%
23.7%
of agents pay between 3% and 3.5%
5.9%
of agents pay between 3.54% and 3.99%
6.5%
of agents have an interest rate higher than 4%
The highest interest rate reported was 12%; that was for an income property
“I have represented the sale of my own home – every one I’ve sold. I know it best, and I know the industry, so I would represent the sale of my home – not necessarily the person purchasing it, though” Debbie Hanlan, Debbie Hanlan Real Estate, St. John’s
EDUCATION 60%
of financial advisors have at least an undergraduate degree
42% of mortgage
brokers have at least an undergraduate degree
ONGOING EDUCATION Continuing education is mandatory, but some agents go above and beyond
Some high school 3.2% High school diploma 12.2% Some university 48.7% Undergraduate degree 23.2% Graduate degree 12.7%
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53.3%
of agents hold at least one designation
5.1%
of agents hold more than four additional designations
LIFESTYLE 40% of mortgage
58.4%
brokers do business in a suit
do not
41.6%
.b4es% 8 1 ke or wn a po
o
tailored suit
60%
of financial advisors do business in a suit
of agents conduct business in a suit
“It’s a stereotype in any sales job. You have to show success, and that’s one of the ways to do it. But some people do it too early, and that’s why they don’t get anywhere” Neres Sraidarian, Big City Realty, Toronto
41.1%
of agents spent less than $100 on their watch
16.5% paid $100 or less for their best suit
39.4%
spent between $100 and $500 o a watch
8.51%
spent betwee $500 and $1,000 on a watch
11%
of agents spent more than $1,000 on their watch
52.8% paid $100-$500
21.9% paid $500-$1,000
8.8% paid $1,000 or more
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FEATURES
COVER STORY: AGENT LIFESTYLE
43.9% drive an SUV
6.7% drive a pickup truck
4.2%
7.7%
drive a sports car
60.8% 39.2% bought used
bought new
02
04
06
4%
drive a compact car
OF THOSE WHO OWN A CAR
08
0
100
drive a minivan
79.7% own their car
21%
for their main vehicle
paid $30,000-$40,000
10.8%
17.3%
paid $20,000-$25,000
15.5%
paid $25,000-$30,000
paid $40,000-$50,000
18.9%
paid $50,000 or more
“It’s important to have a vehicle for the terrain you deal with. And it’s nice to have a nice car” Raymond Borley, Century 21, Rocky Mountain House, Alta.
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19.9% lease
WHAT KIND OF CAR DO YOU DRIVE? Agents drive every make and model imaginable. Here are some favourites:
Ford: 11.2%
16.6% paid less than $20,000
33.5% drive a sedan
Toyota: 9.9% BMW: 7% Mercedes Benz: 6.4% Lexus: 5.4% Honda: 5.3% Nissan: 4.9% Dodge: 4.2% Volkswagen: 4.1% Cadillac: 3.6% Chevrolet: 3.6% Acura: 3% Maserati: 0.1%
HOW MUCH VACATION TIME DO YOU TAKE?
59%
of financial advisors take at least four weeks of vacation
8.5%
24%
11.1%
take less than one week per year
take two weeks
take one week of vacation
44%
of mortgage brokers take at least four weeks of vacation
23.7%
take three weeks
32.8%
take four weeks or more
20% of financial 19.3% OF AGENTS OWN A VACATION HOME Of those who own a vacation home:
57.6% own a cottage
32.3% own US or
advisors own a vacation home
23% of mortgage brokers own a vacation home
international property
10.1% own both
ents are 10.2% ofoafga private or membersuntry club co
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FEATURES
COVER STORY: AGENT LIFESTYLE HOW OFTEN DO YOU USE SOCIAL MEDIA?
“Social media is a new venue for reaching people, and it’s exploding. If you’re not involved with social media, you are behind the times”
8.4%
of brokers never use social media
28.5%
use it occasionally
63.1%
use it daily
51%
of financial advisors use social media daily
60%
Debbie Hanlan, Debbie Hanlan Real Estate, St. John’s
68.3% favour Facebook 14.2% focus on LinkedIn 6.3% choose Google+
4.5 % favour YouTube 4.2% prefer Twitter 2.4 % choose Instagram
of mortgage brokers use social media daily
47.3% 30.2% 22.6% use an iPhone
prefer Android
still support Blackberry
“It’s where everybody looks for information, where everybody complains. It’s what comes up when you Google someone’s name” Neres Sraidarian, Big City Realty, Toronto 28
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FAMILY LIFE
69% of mortgage brokers have been married once
10% of agents have never been married
71%
of financial advisors have been married once
67.8% have been married once
2.4%
have been married three or more times
19.8% have been married twice
29%
of mortgage brokers do not have kids
18.9% of agents do not have any kids 11.7% have 1 40.7% have 2
23%
of financial advisors do not have kids
19.1% have 3 6.3% have 4 3.5% have 5 or more www.repmag.ca
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FEATURES
COVER STORY: AGENT LIFESTYLE 45% of mortgage brokers have a dog
38.5% ofve agents hga a do
30%
of financial advisors have a dog
16.1% of agents t have a ca
28% of mortgage brokers have a cat
15%
of financial advisors have a cat
AGENTS ARE EITHER GUNG-HO FITNESS BUFFS OR PROUD COUCH POTATOES
35.5% of agents never go to the gym
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32.5% of agents go at least twice a week
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49.4%
of agents enjoy Tim Hortons coffee
24.7%
prefer Starbucks
24.5%
of agents bring their coffee from home
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ARE AGENTS FOODIES, OR JUST BAD COOKS?
5.2%
eat out multiple times a day
24.6%
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52.8%
eat out once a week
17.5%
eat out once a month 0
10
20
30
40
50
60
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FSCO License No. 12598
SPECIAL PROMOTIONAL FEATURE
Q&A
What is The 15-Minute Mortgage? Kathryn Grant, CENTUM’s new Director of Broker Services, answers REP’s questions about the company’s new mortgage lead-generation tool that benefits real estate agents What is a 15-minute mortgage? The 15-Minute Mortgage is a lead-generation tool that can be placed on any website. It currently appears on all CENTUM mortgage agents’ websites.
How does it work? What is the process for the client? A client would click on the online tool to get prequalified for a mortgage. This process takes 15 minutes or less. After they have completed the questions, they will receive an email thanking them for the application and providing a prequalified amount, as well as advising them that they will be contacted shortly by a CENTUM agent. The agent gets the lead immediately, and they are required to call within 30 minutes or send an email within an hour. The lead will show all the information on the client, along with the purchase price and down payment they are looking for.
How does it benefit real estate professionals? It can be placed on any website, so it can
WHAT’S NEW AT CENTUM? CENTUM is continuously growing and developing new tools. The company has created a very exciting new business model that brings the real estate and mortgage industries together, forming the perfect marriage between quality service, minimal effort and high profits. Stay tuned for details in the next issue of REP.
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go on a Realtor’s website. For instance, a CENTUM agent might partner with a Realtor and have the widget on their website. If a client used this tool, the lead would be emailed to the Realtor and the mortgage agent. The agent would then contact the Realtor with a preapproval. This is a great way for mortgage agents to build strong relationships with Realtors. In the past, it has typically been an agent trying to get Realtors to send referrals, but we’re giving a lot more back now. It’s quick, it’s easy, and it’s a very good-quality lead for the real estate agent.
What happens if the client is declined? They are never declined. They will receive an email letting them know they need to answer more questions, which still offers a very good opportunity for a mortgage agent to get in contact with that client to help them if there is a concern with credit or income, etc. The agent can then advise and help the client to re-establish their credit or, if the income isn’t enough, they can provide other options. This is still a lead for the agent and Realtor in the future.
Is The 15-Minute Mortgage available to all mortgage brokers? No. This is an exclusive tool created by CENTUM and used only by their mortgage agents. If a real estate agent would like access to the tool, they can easily partner with a CENTUM agent. REP
INTRODUCING KATHRYN GRANT
In her role as Director of Broker Services, Kathryn Grant is the newest member of the CENTUM corporate family. She’s spent more than a decade in the financial services industry, and brings a wealth of knowledge and experience to the role. Kathryn began her career in finance before moving to a senior position at a major bank. She joined CENTUM as a mortgage agent and then opened her own franchise, building it to become one of the most successful in the CENTUM family. Kathryn enjoys taking on challenging and creative financing, as well as experiencing the joy of helping Canadians realize their dreams of homeownership. “I am very excited by my new role and am looking forward to supporting CENTUM agents to continue to be the outstanding professionals they are,” she says. “I love being with an organization that is on the cutting edge of driving both the CENTUM brand and the mortgage industry forward through innovation.”
FEATURES
DONE DEAL
Selling a piece of Canadiana A 65,000 acre parcel of land in rural Quebec – with 70 private lakes, 13 chalets and a piece of Canadian history up for grabs – offered its listing agents a unique challenge
SPRAWLING ACROSS 65,000 acres in rural Quebec, Kenauk Montebello is one of the largest privately held parcels of land in Canada – so it’s no surprise that it offered its listing agents a one-of-a-kind marketing opportunity when it came time to open the sale up to the public. “It was a very unique strategy based on a cost-per-acre model,” says Herb Ratsch, a broker with Sotheby’s International Realty, who sold the property with Jones Lang LaSalle’s Robert MacDougall in December 2013. The asking price was $81.25 million – or $1,250 per acre – to own one of North America’s largest and longest-established private fish and game reserves.
The property The wilderness reserve lays claim to more than 70 private lakes and is home to a gated community with 13 luxury chalets and an exclusive marina. Add more than 102 kilometres of lakefront vistas on Lac Papineau, hundreds of kilometres of existing roads and an idyllic location neighbouring the quaint village of Montebello, Que., and the possibilities for the buyer are endless. “It’s the proverbial location, location, location,” Ratsch says. “It’s an hour from Ottawa, an hour from Montreal, and Highway 50 goes directly there. It is also connected to the world-famous Chateau Montebello.”
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The roots of this property are entrenched in the history of the region. In 1674, the King of France granted the land to Quebec’s first bishop, Monseigneur Laval. Before the opening of nearby Chateau Montebello, the area was the private retreat of the Seigniory Club, whose elite membership reportedly included notable foreign and Canadian businessmen, politicians, and dignitaries, such as former prime minister Lester B. Pearson, as well as Prince Rainer and Princess Grace of Monaco.
“It has incredible, rich history,” Ratsch says. “Every prime minister was a member of the club.” Since the 1970s, Kenauk has operated a retreat where guests can stay in one of the 13 chalets, eight of which reside on their own exclusive lake. Guests enjoy the year-round activities Canada is famous for, such as fishing, kayaking, canoeing, boating, swimming, hiking, hunting, golf, cross-country skiing, snowshoeing and dogsledding.
take aerial photos and video – and, once the property was listed, to take clients on site visits. Ratsch and MacDougall worked with Sotheby’s New York head office, asking: “This is the biggest, most prestigious piece of land on the market. What would you do?” The Wall Street Journal agreed to launch the sale in its magazine and on its website as long as it was the first to promote it. “So we held off for around 60 days to get the massive distribution in the US,” Ratsch says. In March 2013, the property was officially launched with a feature article in the Wall Street Journal , and then was subsequently picked up by the New York Times. “Then it went everywhere,” Ratsch says. “The spin-off was huge, the media afterwards … everyone wanted to know what was going on. That really gave it a big international jump. You can only come out of the bag once, and we wanted to come out with a bang. We felt that this had more legs internationally than in Canada.”
QUICK LOOK
ADDRESS 100 Chemin Kenauk, Montebello, QC, J0V 1L0
LISTING DATE March 2013
LISTING PRICE $81.25 million
SOLD DATE December 2013
SIZE 65,000 acres
PROPERTIES 13 chalets
The sale The marketing The listing of Kenauk Montebello was as unique as the property itself. Sotheby’s and Jones Lang LaSalle signed an exclusivity contract with the Wall Street Journal in September 2012. The agents spent the next six months building a website, working on the marketing content, creating a video and a booklet, and using a helicopter to
The sales strategy was to use a priceper-acre listing because nobody believed the property could be sold at such a high price. “It was just a lot of acres,” Ratsch says. “When you look at it on a cost per acre, it was cheap. If you listed it at $75 million, people would ask how we came up with that number. So we listed it at $1,250 per acre with the goal of achieving about
THE PROPERTY BY THE NUMBERS
475 14.5 5
KILOMETRES OF RIVER
ISLANDS ON THE PROPERTY
KILOMETRES OF LAKEFRONT
100 90
KILOMETRES OF ROADS
-MINUTE DRIVE FROM MONTREAL OR OTTAWA
$1,000 to $1,250 an acre. And then it’s just a multiplier.” The duo also put together a booklet that provided information about Kenauk Montebello Reserve and broke up the property by each of its lakes. “This lake is worth $2 million, that lake is worth $5 million ... people realized there is $100 or $150 million of sales when you break it all up,” Ratsch says. For instance, he explains, a private lake between 500 or 1,000 acres might sell for $3,000 to $5,000 an acre, so when a potential buyer looked at the booklet to see the breakdown, they would realize what a great opportunity it was. The property was sold as a private estate to a group of five buyers for an undisclosed but princely sum. REP
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FEATURES
EXPERT ADVICE
6 ways to get the backyard ready for buyers As the summer winds down and the fall selling season kicks off, now is the perfect time to make sure a home’s outdoor space looks as great as the rooms indoors. Celebrity landscaper Carson Arthur shares his 6 tips for making the best of the backyard WE’RE ALL guilty of funnelling time and money into indoor spaces and barely giving the backyard a moment’s thought. After all, what is there to do with a patch of grass and a few trees? The easy answer: A whole lot! Don’t underestimate the design (and selling) potential of an outdoor space. With cooler weather and firm, dry ground, autumn is the perfect time to take on these types of projects, adding subtle details that will have a big impact on homebuyers. It’s not as hard as you think. You don’t need to be a landscape designer to help your clients make their green space as great as their living room. All that’s required is some crafty thinking and a bit of creativity.
1
Build a deck for entertaining
When it comes to improving the backyard, I’m a huge advocate of creating and maximizing usable space. Homebuyers will perceive a home as larger, and therefore more
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valuable, if it has great, usable space outdoors. A deck is the most versatile way to achieve an even, multipurpose surface, perfect for dining furniture and comfortable seating. There are a lot of things to consider when installing a deck, but choosing the right materials is the key. For outdoor projects, my go-to is MicroPro Sienna, a pressure-treated wood that has a gorgeous rich brown hue but doesn’t require initial staining. It’s durable and built to last, but sellers will love that it’s also affordable.
2
Increase those outdoor hours
With fewer bugs and beautiful breezes, fall evenings are always my favourite. Urban fire bowls or infrared heat lamps are a great way to extend the season and make a space instantly cozier. Add a few extra pillows and blankets, and you’ll have a hard time bringing the homebuyers back indoors.
3
Repurpose unusable indoor items for outdoor use
Instead of dumping old possessions in the trash, why not think of creative ways to use them in the garden? This is a great way to give an outdoor space a stylish and individualized aesthetic. I like to get imaginative with my planters, using anything from
Just like any room inside the house, the backyard is a blank canvas that your clients and prospective buyers can paint with their personality 5
Add privacy
6
Use multifunctional pieces to maximize outdoor space
With more patios being installed in backyards and fewer trees, the need for a private area out of the view of neighbours has never been more pertinent. I recommend adding a pergola, which creates a secluded space with extra privacy. Like with a deck, when constructing a pergola, make sure to choose durable and environmentally friendly materials.
Photo by Bob Gundu, courtesy of MicroPro Sienna
watering cans to old garden boots or even broken chandeliers.
4
Don’t be afraid of colour
Don’t just rely on flowers to create colour in your client’s backyard. Colourful planters, pillows or even rugs are a great way to add a bit of character. Plus, the
extra bonus of adding colour through accessories means that you’re not married to any one look. You can easily change it up complement the rest of your client’s home! Remember, just like any room inside the house, the backyard is a blank canvas that your clients and prospective buyers can paint with their personality.
Just as with the indoor space, you don’t want an empty room outside – you want it to have purpose! Creating a versatile living space that functions both for your clients and for future buyers can add significant value to the home’s resale price. It could be an outdoor dining area, a vegetable garden, a play area for the kids or a cozy spot to unwind. Be sure to incorporate multipurpose furniture pieces as well. REP When not in the dirt with his eco-friendly landscape design company, Carson Arthur stays busy building, planting, writing or designing as a featured guest on “CityLine.” His show, “Critical Listing,” is currently airing on HGTV Canada. For more, visit www.carsonarthur.com.
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SPECIAL PROMOTIONAL FEATURE
Q&A
How to become a leading real estate company Pam O’Connor, president and CEO of the Chicago-based company Leading Real Estate Companies of the World® tells REP how Canadian real estate professionals can grow their global presence BY THE NUMBERS
500
global independent real estate firms
50+
countries where LeadingRE has a presence
30,000+ annual client referrals
$80 billion
more in annual sales in the US than any franchise
14
of the top 25 brokerages in the US are LeadingRE members
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What is Leading Real Estate Companies of the World? How does it work? Leading Real Estate Companies of the World [LeadingRE] is the largest global real estate network in terms of annual home sales. It was established in 1997 by brokers who wanted to control their own destiny and build their distinctive local brands while enjoying the power of international connections and the resources available through economies of scale. Our members benefit from more than 30,000 client referrals annually, as well as listing and branding tools, luxury marketing, online learning, conferences and technology solutions – programs previously available only from franchises.
How does LeadingRE differentiate itself from the competition? One differentiator is that we are local and we are global. We start with local market-leading firms and empower them to prosper as part of a powerful global entity. Another is that membership is by invitation only – we are very selective in order to live up to our name. And because LeadingRE is the brand behind the member’s brand, we see them as the stars and us as the supporting cast. Finally, we provide the advantages of a franchise without the costs and restrictions. Our members are with us because they have a return on investment and derive measurable value, not because they are bound by a long-term contract.
How should the real estate industry be thinking about education? We live in a world where information is free and knowledge is priceless. LeadingRE’s mantra is ‘making the best brokerages better,’ so we are all about high standards of quality, competence and exceptional performance. We support our affiliates through a 24/7 online learning platform called Institute, with a version specifically for Canadian members. Our conferences are routinely characterized as the industry’s best. We provide webinars to
address evolving educational needs, and our CEO groups connect owner brokers for idea-sharing and peer reviews. These continuous learning opportunities are embraced by our members in their quest to maintain and enhance their market leadership.
Why is LeadingRE interested in the Canadian market? Our hybrid local/global model has been a tremendous success in the US, where we represent 14 of the top 25 brokerages and have $80 billion more in annual sales than any franchise. Replicating that success in Canada, with the same opportunity for brokers to own and control their local brand while enjoying the resources and connections of a worldwide affiliation, would be a win-win for all. As the world becomes smaller with more cross-border movement, it’s essential to think beyond borders and provide services to assist clients both across town and around the world. Building on our foundation of top independent brokers in Canada to have an even stronger national presence here is a priority for LeadingRE.
What are some Canadian real estate trends that excite you? First, the trend toward urbanization for convenience and lifestyle signals more referral opportunities, which is one of the strengths of our network. Second, the slow but steady improvement in the housing market and low interest rates make Canadian real estate a great investment. And third, the shrinking business margins in real estate here should make our high-value model very attractive to Canadian brokers. We believe we offer a unique opportunity for top-quality Canadian firms that are interested in a new and rewarding way of doing business. REP For more information, visit www.leadingre.com, or contact Sheila Barr at 312-361-8632 or sbarr@leadingre.com.
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FEATURES
ALTERNATIVE FINANCING
Lending solutions for subprime clients Subprime homebuyers require a little more work when it comes to putting together financing, but teaming up with the right alternative lender can help make these deals go smoothly ALTERNATIVE LENDING may not be the first route real estate professionals think of taking when advising clients about their mortgage options, but it’s certainly an area that is growing in popularity – and in necessity, given the tightening of Canada’s mortgage regulations.
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There are a range of clients who fit into the alternative lending space, such as those who are self-employed, those with below-average credit scores or those who know they are pushing the boundaries on typical A-lender affordability factors. “For some, alternative lending will always
be their best option,” says Brian Gentles, a mortgage broker with TMG The Mortgage Group Alberta. “It can help them grow their business. It can help them manage personal tax implications and build a nest egg for later years in the form of retained earnings. But too few borrowers even know that alternative lending exists. We need to do a better job of getting the word out.” Many clients will require a broker or real estate agent to explain to them how and why they don’t fit into A lending, what alternative lending can do for them, and how they might eventually transition to an A lender if they make and follow a plan.
recent report by CIBC. But alternative lenders’ share of the overall mortgage market has grown, starting at 0.8% during the 2008 recession and expanding at a rate of around 25% per year, said Benjamin Tal, deputy chief economist of CIBC World Markets, in a recent Globe and Mail article. One of the reasons for this is tighter government regulations, which have allowed alternative lenders to fill an important void. Beginning in 2012, the Office of the Superintendent of Financial Institutions ushered in the B20 and B21 guidelines, aimed at defining principles that encourage best practices in respect to sound residential mortgage insurance underwriting. The final phase of the regulations was just implemented in June 2015. The changes have had a predictable knock-on effect on the lending space, forcing more borrowers to consider alternative options. Mortgage brokers and real estate agents have adapted accordingly. “I think a percentage of the broker world has learned the alternative side due to the regulation changes and how they have affected the lender’s guidelines,” Gentles says. Three years ago, many feared the regulations would be too onerous for the industry and on borrowers, but the new rules have, in fact, helped to reassert the traditional broker role – and, subsequently, the real estate agent’s role – as expert advisor and educator.
“Almost everyone goes through ups and downs,” says Graeme Moss, principal broker at Fair Mortgage Solutions in Hamilton, Ont. “If a person has a down, whether it is due to illness, job loss, divorce, a million things, the goal I have is to get them back on track, like a doctor. What is powerful to clients is giving guidance or a roadmap.”
Lending alternatively The proportion of mortgages given out by alternative institutions – other than banks or credit unions – remains small, at roughly 2.2% of the entire market, according to a
CASE IN POINT Who: A professional couple wanted to buy a second home for a family member to live in. Why: They had great income stability, very low ratios and were able to put 25% down, but they were also very sloppy on credit card payments. The couple was declined four times in the A lending space, including at financial institutions where they had previous relationships. Outcome: Since their Beacon scores were still 640-660, an alternative lender was able to do the deal in a heartbeat. “I provide clients with alternative solutions when they are not able to get regular financing from the banks,” Xu says. “Especially for Realtors, the aim is to get the deal closed.” Moss feels those operating in the alternative lending space should take on the role of educating the homebuyer. “Maybe the term ‘lifestyle coach’ is more of a recent thing, but that’s the way I’ve always been since day one – and it’s always been effective,” he says. He adds that the advice he passes along to clients is very much welcomed – even if it is
“Too few borrowers even know that alternative lending exists. We need to do a better job of getting the word out” Brian Gentles, TMG The Mortgage Group Alberta Relationships and education Christine Xu, a mortgage broker and private lender at Mortgage Architects in Markham, Ont., has seen her client base evolve over the past few years, from mostly A clients to alternative borrowers. Of these clients, around half are referred to her by real estate agents, a reciprocal relationship that she believes is integral to the process.
tough-love advice – especially when it comes to credit rehabilitation. “People living within their means can be a big issue,” he says. “People are afraid to give that sort of advice or tell a person what to do, but it really does help them. They appreciate hearing the honest truth, and they respond to it.” Xu is also a strong believer in the value of education. She runs in-office teaching
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FEATURES
ALTERNATIVE FINANCING CASE IN POINT Who: A seasoned professional had recently left employment to create his own company. He had one month’s work on the books, solid credit and net worth, and owned his principal residence free and clear. He also owns three rental properties with around 50% financing. His goal was to conserve cash for a rainy day, and he wanted to purchase another income property. Why: The A-lenders were looking for two years of tax history and proven income for his business. Outcome: His principal residence was refinanced with an alternative lender to secure the down payment, and he financed 70% on the new income property with the same lender. All funds borrowed are for investment purposes, so all interest is tax deductible.
WHAT PERCENTAGE OF YOUR DEALS ARE ALTERNATIVE?
81% or more
61-80% 41-60%
0%
7.4%
10.6%
10.6% 1-10%
9.5%
32.9%
17% 11.7% 21-40%
sessions for real estate agents. “I try to educate the Realtor, explain how they can qualify their client,” she says, adding that those same lessons can be extended directly to the client. “When the client has the down payment, I teach them how to calculate a regular interest payment to show them whether they are able to afford it. If the client is unable to afford it, then I’m not doing the client any favours.”
Doing your homework An important strategy for attracting clients who are suited to alternative lending options is to forge relationships with key stakeholders, including those in the A lending space. “Having a relationship with branch managers of banks and credit unions is more important than ever because more of those clients are being turned down than ever before,” says Dustan Woodhouse, a broker at Dominion Lending Centres based in Coquitlam, BC. This is where education comes into play, as
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11-20%
Source: Poll conducted by MortgageBrokerNews.ca, March 2015
agents will be required to have candid conversations with borrowers to make sure they are aware what is required, since the regulation changes ushered in an increase in necessary documentation. “They’ll come to you and say, ‘Five years ago, I only needed to provide three documents, and now you’re asking me for 20 documents,’” Woodhouse says. “Well, that’s the way it’s changed – so it’s the skill with which you can
communicate the increased requirement of documents that will make a huge difference.” Lenders are on the same page in asking brokers and agents to focus on communicating the appropriate use of alternative financing options to clients, but the starting point for that process often will involve the brokers and real estate agents ensuring they are up to speed on alternative lending. “In a nutshell, education, partnerships and
“Almost everyone goes through ups and downs. What is powerful to clients is giving guidance or a roadmap” Graeme Moss, Fair Mortgage Solutions
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FEATURES
ALTERNATIVE FINANCING CASE IN POINT Who: After a messy marital separation, but with help from parents, this borrower had clear title to the home but battered credit. Why: The borrower needed 50% loan-to-value to repay her parents. No A lender would come to the table, not even at that LTV with low ratios. Outcome: It took a three-year alternative lender deal with a plan in place to rebuild credit and then refinance with an A lender at maturity.
“I provide clients with alternative solutions when they are not able to get regular financing from the banks. Especially for Realtors, the aim is to get the deal closed” Christine Xu, Mortgage Architects networking are the trifecta of the alternative lending business,” says Steve Lydon, national sales manager for alternative lender MCAP Eclipse. “This area is growing quickly with huge future potential, but brokers need to know how to make it work for them and their customers. Attending seminars, researching the sector, and reading industry journals and
Not just a mortgage... YOUR mortgage!
articles to learn about the business and alternative lending guidelines are the keys.” Ultimately, agents will need to acclimatize themselves, and then their clients, to a very different landscape than that of the primelending world. “I think the surge is more of a long-term wave,” Gentles says, “and I believe that we are just at the beginning of it.” REP
Experience Competence Relationships Putting it all to work for you
OUR PROMISE TO YOU: To share with you all information that is relevant to making an informed decision regarding your choice of mortgage. To answer all of your questions. To respond promptly to all telephone call and emails. To keep you, and the rest of your real estate team as appropriate, appraised of the status of your file. To show you the opportunity to pay off mortgage and other debt much faster.
Residential and Commercial Mortgages
BRIAN GENTLES
To be your mortgage consultants for life.
ACCREDITED MORTGAGE PROFESSIONAL
TMG The Mortgage Group Alberta Ltd. | 1-866-273-6192 | brian@briangentles.com | www.briangentlesteam.com
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PEOPLE
AGENT PROFILE
Back from the brink From the gruelling war zones of Afghanistan to the rigorous world of real estate, Glen Kirkland has come full circle after a traumatic experience changed his life forever. Jordan Maxwell reports THE DAY was September 3, 2008. Glen Kirkland, a fourth-generation soldier in the Canadian Army, was just days away from returning home to his family after a difficult tour in Afghanistan’s Zhari District in the heart of Kandahar Province. The day started like any other. Kirkland and his crew drove through the mountainous desert, patrolling a Taliban stronghold. Minutes later, the only light Kirkland would see was from the fire of a rocket launched at the tank carrying members of his platoon. Usually, Kirkland never rode up front, but on this day, he was driving. That decision proved to be the difference between life and death. Three of his fellow soldiers were killed in the attack, while Kirkland was left for dead. “By the numbers, I should be dead,” he says in I Came Back , a recent documentary about his experience. “Ninety per cent of the time, I was in the back of the LAV. That time I wasn’t, and that was the time we got hit.”
the ‘Heart of Darkness,’ an epicentre of Taliban control. The operation had started a few days before the attack took place; Kirkland slept in old buildings and huts. During the mission, he went out with his platoon as a medic in case of enemy attack. He took the wheel just before the attack, turning onto Taliban Road near Kandahar City. “We were going to pick a fight with them,” he says. “We were going to knock on their door and pick a fight with them.” The mission looked like it was going to be a success, but things soon took a turn for the worse. That day on the tank is now seared in Kirkland’s memory. “It was a very surreal thing,” he says. “I didn’t have any feeling in [my body], and I thought, ‘Wow, this is what it’s like to die; it isn’t too bad.’ So I made a choice – either I was going to stay there and die or try to get out of there.” Kirkland managed to escape and was later rescued by Canadian forces. He was lucky to be alive. His bulletproof vest was gone. His helmet was dust. His shirt was torched. He suffered severe burns and damage to his hearing, but was able to help load the rest of his colleagues into the LAV.
“I didn’t have any feeling in [my body] and I thought, ‘Wow, this is what it’s like to die; it isn’t too bad. So I made a choice – either I was going to stay there and die or try to get out of there”
Heart of darkness During a mission with US and British forces, Kirkland and his team were surveying areas in what is known as
46 www.repmag.ca
THE FIGHT FOR BENEFITS When Glen Kirkland returned from Afghanistan, he faced a struggle that many soldiers in the Canadian Army have taken the Harper government to task over: benefits. Kirkland testified before a parliamentary committee about the difficulty he faced when trying to receive health benefits following the Taliban attack that killed three of his fellow soldiers. He was eventually discharged from the army after suffering hearing loss and a brain injury that left him dependent on insulin. The Conservative government has since poured millions of dollars into veterans’ programs, and recently underscored its commitment to ex-soldiers, but many remain skeptical about the treatment of Canadian soldiers.
The return When he returned to Canada from Afghanistan, the traumatic experience hit Kirkland hard. Like many of his fellow soldiers, he battled PTSD and alcoholism. It was his father, who also served in the military, who helped him through to the other side. “When I first came back, everything was surreal,” he says. “You’re ripped from a war zone and put back into normal civilian life. It was a tough transition for me. It was my Dad who really helped me. I talk to him literally every day, and he’s a true hero. But ultimately, it was a decision I made. And I didn’t want to be that person. I went to Brandon University right away and went right into my real estate career. That helped a lot, just to have something else to focus on.” After making the decision to go back to school, Kirkland eventually reintegrated himself back into civilian life. His decision to go into real estate was something he’d been pursuing long before he became a member of the Canadian Army. While he’ll never forget what happened that September day in Afghanistan, what Kirkland chooses to focus on are the similarities between life on the battlefield and life in the real estate industry, where his discipline has helped to make him one of the most decorated agents in Manitoba. “You never turn it off,” he says. “When you’re overseas, you’re always switched on; you’re always working, so in that regard, it’s the same thing. You can’t compare getting into a gunfight to selling a deal, but that work ethic and discipline is what keeps us going.” REP
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PEOPLE
FAVOURITE THINGS
VANESSA ROMAN
Realtor with Exit Realty Metro, radio host, columnist and host of HGTV’s “Reno vs Relocate”
Photo from www.goodreads.com
First-time buyers, Gerard Butler, ‘mom jokes’ and Manchester United – these are a few of Vanessa Roman’s favourite things
FIRST REAL ESTATE DEAL: My first real estate deal wrecked me – it was absolutely perfect! I was working with a family member who was well-qualified, knew exactly what she wanted, and we found ‘the one’ after touring only four properties. In the days that followed, I had endless daydreams about the perfect clients I would work with in the future, negotiating perfect deals for them. Looking back, my naivety makes me smile. FAVOURITE MUSIC 1930s and ’40s swing-era bands. Duke Ellington, Glenn Miller and Benny Goodman had a timeless rhythm I could listen to all day long.
FAVOURITE BOOK Atlas Shrugged by Ayn Rand. This book sparked some of the most intense debates of my life so far.
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FAVOURITE MOVIE I’m a sucker for romcoms. I have watched Love Actually and P.S. I Love You more than 15 times each. FAVOURITE REAL ESTATE DEAL First-time homebuyers are always my favourite deals. It’s wonderful to share their enthusiasm, witness their wide-eyed wonder at all of the housing options out there and to be a voice of reason when the responsibility of becoming a homeowner seems overwhelming. FAVOURITE VACATION SPOT Dubrovnik, Croatia. It has the perfect mix of Old World charm, stunning landscapes and horrifying history.
FAVOURITE THING ABOUT WORKING IN REAL ESTATE: Real estate is the epitome of change; it is all about beginnings and endings. With every house I sell, people close one door, only to open another, behind which awaits endless possibility, adventure and opportunity. I feel privileged to share the journey of homeownership with my clients. FAVOURITE SPORT Soccer (football) – I’m a proud Manchester United fan.
FAVOURITE FOOD Anything I can eat with my fingers. Silverware is overrated.
FAVOURITE CELEBRITY I have a not-so-secret celeb crush on Gerard Butler.
FAVOURITE THING OUTSIDE OF REAL ESTATE I tell jokes – the really cheesy kind that only dads can get away with. I’m a mom, so I just don’t have the same delivery, I guess. People expect mom jokes to be better somehow. My family and friends don’t even fake laugh anymore.
THIS LISTING IS MINE. I’M IN CONTROL. WHO KNEW? TODAY, MY WEEK IS FULL. LIMITS? WHAT LIMITS?
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