- CREA is holding a Special General Meeting on October 18 to get direction and support on a for-profit future of Realtor.ca.
- Alberta Real Estate Association and others “don’t see a benefit to selling off a portion of Realtor.ca”.
- Any technology looking to grow and scale or enhance its offerings requires capital – the question is how to capitalize while meeting member and consumer needs.
The future of Realtor.ca may be changing. For months, the Canadian Real Estate Association (CREA) has been working with stakeholders on whether it will move from its current non-profit status to a for-profit model.
“ … we’ve been working in consultation with realtors and leaders from boards and associations across the country (the Realtor.ca Task Force) and outside experts who have been leading initial due diligence on the consideration of moving Realtor.ca into a separate, taxable, wholly-owned subsidiary of the Canadian Real Estate Association,” says Pierre Leduc, spokesperson for CREA, in a statement.
CREA seeks endorsement and next steps at SGM
Tomorrow, CREA is holding a Special General Meeting (SGM) to request and collect directional endorsement on what’s been done so far and to go over next steps.
“This is an important and exciting journey, and we want to be sure we’re taking the time to listen and consult,” Leduc expresses. “The discussions on October 18 will help CREA’s Board of Directors in their decision-making on future work – which could include a formal vote on a detailed business plan at CREA’s AGM in April 2024. We look forward to sharing more when we know more.”
But, the process seems to have been a bit of a bumpy one in recent months.
Alberta boards take a stand
In an update to members of the Calgary Real Estate Board, Chair Christian Twomey wrote that he was invited to be on CREA’s Realtor.ca task force on May 16 and resigned from it on August 30. He wrote that initially, he felt the process had him in a state of unease and his apprehension did not go away during his time on the task force.
“Immediately after my resignation, it became clear there were significant challenges in aligning the Task Force and CREA on what is best for Realtor.ca. It is clear that there are forces involved that are undermining good governance and appear to be systemic in nature,” he wrote on September 19.
“On Sept. 12, CREA sent a notice of a Special General Meeting on Oct. 18 to all Boards and Associations across Canada. Interestingly, when writing this email, CREA has still not presented a motion for Boards and Associations to vote on. So far, CREA has advised the leadership across the country that we are expected to attend this meeting in person for a ‘directional endorsement exercise on the future of Realtor.ca’. For CREB, our goal is for Realtor.ca to continue to be a reliable source of business for our members.”
Brad Mitchell, CEO of the Alberta Real Estate Association (AREA), said part of the association’s concern is it doesn’t see a benefit to selling off a portion of Realtor.ca.
“Back in January, a number of CREA members saw (the board’s) plan to basically sell a portion of Realtor.ca. A lot of members got together and AREA, along with nine other boards in Alberta, submitted a requisition to have a Special General Meeting to propose bylaw changes to prevent the CREA board from doing it without a member vote,” says Mitchell.
“And so, this SGM is really about the future of Realtor.ca and how it’s going to work . . . the task force was struck, they’re going to bring forward some recommendations.”
Mitchell says the initial idea of CREA wanting to sell a portion of Realtor.ca came as a surprise, and it was felt that this plan needed more detail and more thought.
“We don’t like the idea. CREA hasn’t been able to demonstrate any advantage to bringing in outside investors and, of course, if you have minority shareholders (they) have significant rights. Right now Realtor.ca is owned by every realtor member in Canada and it’s a not-for-profit model. As soon as you bring in outside investors, of course, they’re going to want to make a profit.”
“Revenue should benefit all members in Canada”
Mitchell explains there’s only one way to profit: from the members themselves. “They’re the ones that have created the system. There are ways to generate revenue but that revenue should be for the benefit of all Canadians and all members in Canada, and not to a specific corporation or entity.”
He says AREA looks at one thing – protecting its members’ interests.
“When those members’ interests are threatened, we will act very swiftly and decisively to protect the people that we’re responsible to. So, any sale of Realtor.ca to anybody outside of the realtor members is a non-starter for our provincial association and many of the boards in the province,” he adds.
In the SGM agenda package, a note from Larry Cerqua, chair of CREA, and Marina James, chair of the Realtor.ca Task Force, says the platform is instrumental to the success and reputation of realtors in Canada by putting realtors at the heart of consumer real estate journeys and delivering millions of leads to members each year.
“We know how important this asset is to the entire realtor association community. As stewards of Realtor.ca, we must prepare to lead future technological change while ensuring the long-term sustainability of this unique and extremely important asset that generates tremendous value to realtors and their clients,” they wrote.
The pair said the task force has been leading initial due diligence and helping it chart a path forward for the platform that would be turned into a separate, taxable, wholly owned subsidiary of CREA.
A huge force in property searches
Lynette Keyowski, Managing Partner of REACH Canada, a real estate technology scale-up program, says the national program is affiliated with the National Association of Realtors out of the United States – CREA’s equivalent in the U.S.
REACH has a venture capital arm called Second Century Ventures which invests in real estate technology companies for the benefit of their realtor members. They own the realtor brand (or realtor mark), and they co-license it in Canada with CREA.
Keyowski says there are plenty of statistics and market data pointing to Realtor.ca being a significant force in property searches for Canadians.
The future requires capital
“From that perspective, it’s obviously a viable technology. It has grown its market share for a few different reasons. This comes down to a business model that is employed, and Realtor.ca – by virtue of its ownership through CREA – has enjoyed essentially a monopoly on its asset, which is the listing inventory.
No other portal can point to a monopoly on acquiring that listing data. Any other real estate portal needs to acquire the data through some other means, whether it’s monetary or financial, (and) whether it’s through affiliation or membership or through a partnership of some nature with the folks that own the data,” Keyowski comments.
She says CREA has been able to grow the Realtor.ca brand through that lens because they have the most listings available.
“From a pure future viability perspective, I suspect it’s around how do we continue to deliver the product that the marketplace demands, given our current ownership structure, regardless of the fact that we have a monopoly on input … I suspect that is likely the conversation being had,” she suggests.
Keyowski points out that, based on REACH’s knowledge and work, any technology function looking to grow and scale or enhance its offerings requires capital.
“So, the question then is how do you capitalize that growth, how do you capitalize that expansion, how do you capitalize continuing to meet the demands of a continually evolving and changing consumer base?
I think it really comes down to two things. It’s how you operate the business and it’s how you capitalize the business.”