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Real Estate Marketing News Mortgages Te c h n o l o g y Opinion

Issue #234 December 2008

CREA’s
ironman President
Cal Lindberg
on FINTRAC,
the Competition Bureau,
the economy & more
Page 18

Canada’s most giving


real estate office
Page 12

Kick your open


house up a notch
Page 46

The secrets of
PR marketing
Page 48
Each office is independently owned and operated.
REM DECEMBER 2008 3

Educate your clients, panel urges


Eight company leaders offer their insights on the economy and the state of the real estate industry
By Jim Adair
ow can you prosper in per cent are not doing it in some
H the current real estate
environment? Educate
your clients about the changing
places….it’s 20 per cent. And let’s
not be afraid to say to a buyer, ‘Let’s
get something on the table so we
marketplace, show them your can at least negotiate with the sell-
expertise, keep an eye on the bot- er.’”
tom line, and ignore the news Kimberly Fleming, regional
media. That’s the advice of a panel director of Prudential Real Estate
of real estate company executives Affiliates, told the audience that
who recently addressed more than sales reps “need to become consul-
1,000 members of the Toronto tants, not marketers”. The public
Real Estate Board during its needs to know that Realtors are
Annual General Meeting. here to help them reach their
With sales and prices dropping home ownership goals, she said.
in most parts of the country, “it’s “Look at new ways that you can
our job to calm the market – not to use technology to get yourself out
panic with the rest of the popula- there.”
tion,” said Stephen Wong, chair- Brokers should take a hard look
man of Living Realty of Toronto. at their financial situation and
“We all have to believe in the “start trimming down for the next
market ourselves. We don’t have a six to 12 months,” said Andrew
problem.” Wong pointed out that Cimerman, CEO of HomeLife
high immigration levels in Realty Services. “Managers cave in
Canada, and particularly in the to the demands of new agents, but
Toronto area, provide a built-in they have no experience. They
“guaranteed market” for real estate need solid management. New The panel, from left: Howard Drukarsh, Kimberly Fleming, Gary Hockey, Michael Polzler, Stephen Wong,
sales. He said that low interest agents shouldn’t go to a manager Phil Soper, Andrew Cimerman, Don Lawby.
rates, good employment numbers with a note demanding 100 per
and an extremely low rate of mort- cent commissions – they should homes sold. it.” He suggested hosting first-time REM asked the panel questions
gage arrears means the economy is say, what can you do for me? Are “Go back and talk to past cus- homeowner events as a way reach about the market outlook and the
not as bad as some people are mak- you going to help me with offers, tomers,” said Don Lawby, president out to clients. industry. Asked if the number of
ing it out to be. listing agreements… you have to and CEO of Century 21 Canada. Polzler said it’s essential that real estate agents was likely to
“Stop reading newspapers and go back to the fundamentals.” “You have to demonstrate your agents develop first-rate listing pre- dwindle because of the economy,
stop watching TV,” said Michael expertise.” He said that to educate sentations, and pay close attention Lawby said, “I think some of the
Hockey suggested that new
Polzler, regional director and exec- the public about the marketplace, to developing good print and/or new people will outperform some
agents in the business could go
utive vice-president of Re/Max Realtors can’t “leave it up to the web advertising. of those who have been around for
through an apprenticeship period
Ontario-Atlantic Canada. “The and be placed on a salary, as is com- media, or to organized real estate or Media representatives from the
to the government. We need to do Continued on page 53
market hasn’t really slowed that mon in commercial real estate. In Globe & Mail, the Toronto Sun and
much. We’ve gone from going 150 tough times, Fleming said that
mph to 120. It feels slow, but it’s some agents should consider get-
still a very healthy market.”
Howard Drukarsh, vice-presi-
dent of Right at Home Realty in
ting together with other sales reps
to form specialized teams, recogniz-
ing and serving a niche market.
Mississauga Realtor
Toronto, said agents must adapt to
the new market. Since the market
was so good for so long, “many
Phil Soper, president and CEO
of Royal LePage, agreed that bro-
kers need to look after the bottom
murdered
agents have never had to deal with line, but that they must “look for ell-known Mississauga 2006. Larry is a retired Toronto Interim Place.
a price reduction before. But you
have to get out and tell your ven-
dors, ‘I can tell you what you want
ways to support your Realtors in
difficult times. This is not the time
to turn your back on your peers in
W Realtor Susan Ryan was
shot to death in her
home November 9, and her hus-
police officer. The couple had
been married for more than 30
years and had no children.
In an interview in The
Mississsauga Business Times in
2006, Susan said that real estate
to hear, or I can tell you the truth.’” the office.” He said salespeople band Larry is facing second Susan spent a lot of her free professionals must take a broad
“You need to educate and com- should be “very picky about the degree murder charges. time giving back to the commu- look at their industry and their
municate with buyers and sellers,” buyers and sellers you deal with. Susan Ryan, 57, operated her nity, particularly for Victim community.
said Gary Hockey, president of Make sure they have financing in own firm, Susan A. Ryan Real Services of Peel. She organized a “How are we going to assist, to
Coldwell Banker Canada. “There’s place. Make sure the vendors are Estate. She had been in the real Chef’s Celebrity Challenge event make sure there’s housing for the
no point in sitting with a seller willing to price properly.” He said estate business for more than 30 to raise money for the charity. poor within the community?” she
with an overpriced house. Out in difficult times, consumers will years, and was president of the She also raised more than said. “People have to care. That’s
west, price reductions of 10 or 15 “flock to quality” to get their Mississauga Real Estate Board in $20,000 for a local shelter, the bottom line.” REM
4 REM DECEMBER 2008

Multiple Listings
Waterford, Burford, Scotland, Bruce Sheldon of Royal
Oakland, St. George and sur- LePage in Langley, B.C. has been
rounding communities. Royal appointed to serve a two-year term
LePage says the move brings the as chair of the B.C. Commercial
By Jim Adair
company’s share of the Brantford Council. The council includes
Do you have news to share with Canada’s real estate community? marketplace to more than 22 per Realtors from nine real estate
Let REM know about it! Email: jim@remonline.com or use the cent. boards that are working together to
REM news fax line at (416) 406-0882. enhance the practice of commer-
■ ■ ■
cial real estate in the province.
oronto-based real estate I love real estate marketing and Daniel Putnam has been “Commercial real estate in

T
■ ■ ■
veteran Ernest Furtado sales and the freedom it brings with named president of B.C. continues to remain strong
Barney Johnson, broker of MortgageBrokers.com Financial
has joined KW it. When you love what you do it is despite low vacancies, higher
record at Re/Max Crossroads Group of Companies.
Commercial to assist in the not a job,” he says. rental rates and economic pres-
Realty, has acquired Re/Max Prior to joining
launch of the new Keller His office, at Victoria Park and sure,” says Sheldon, a Realtor for
Associates Realty. Both offices are MortgageBrokers.com, Putnam
Williams Realty commercial divi- McNicoll avenues, was named over 16 years and past-chair of the
in the northeast Greater Toronto was head of sales for Macquarie
sion in the Canadian market- Crossroads because of its location Fraser Valley Real Estate Board’s
Area. Financial, and he is also the former
place. at the centre of Richmond Hill, Commercial Division. “These
Johnson says that Re/Max president of Mortgage Centre markets are still controlled by lim-
“There is a tremendous Markham, North York and
Associates, under Broker of Record Canada, a division of CIBC ited supply and increasing
opportunity to recruit commer- Scarborough. With the merger of
Peter Chung, was enjoying a ban- the two offices, Re/Max Crossroads Mortgages. demand.”
cial brokers to Keller Williams, a ner year and was one of only a few
company that offers more attrac- now has approx 200 agents and Putnam started his career as a The council represents over 90
offices within the Toronto Real ranks close to the top of the mortgage specialist in South
tive commission splits than tra- per cent British Columbia’s com-
Estate Board that was showing an Toronto MLS in production, Western Ontario and within one
ditional commercial brokerage mercial real estate MLS listings
increase in sales volume for the Johnson says. year co-founded Tristar Funding
shops,” says Furtado. He serves and includes the B.C. Northern,
first nine months of this year versus Corporation, which grew to
as Canada’s representative on Chilliwack & District, Fraser
the same time period last year. ■ ■ ■
become one of Canada’s largest
the newly created KW Valley, Kamloops, Kootenay,
“Peter has decided to return to Mike Hurley and Michael mortgage brokerage operations. Okanagan Mainline, Vancouver,
Commercial Leadership sales with 100 per cent of his time Hurley, broker/owners of the for-
Council, a group of 27 Keller Vancouver Island and Victoria real
going towards building a team as mer Prudential Hurley Real Estate ■ ■ ■
estate boards. REM
Williams commercial associates part of the strong Re/Max in Brantford, Ont., have joined the
who will implement the new Crossroads franchise,” says Royal LePage franchise network.
commercial division in nearly Johnson. The company will now operate
700 offices throughout North Johnson founded Re/Max under the name Royal LePage
America. Furtado will also serve Crossroads in 1980, and is still its Hurley Real Estate.
as the KW commercial director manager, trainer and recruiter. “My The brokerage’s team of 42
in the Toronto-based Keller 27+ years with Re/Max have been sales professionals service
Williams Referred Realty office. the most enjoyable years of my life. Brantford, Paris, Simcoe,

The Coast Realty Group team relaxes after a tour of waterfront and other
rural properties on Denman Island, B.C. From left: Martin Bridges, Don
Luckett, Donna Tuele, Ursula Gustafson, Sylvie Schroeder, Rob Phillips,
Barney Johnson Mike Hurley Michael Hurley Andrena Koch-Schulte, Marty Douglas, Chris Flynn and Scott Reed.

Publisher Editor 2255B Queen Street East If you have industry news or want us to know
HEINO MOLLS JIM ADAIR Suite #1178
about your company or services
e-mail: heino@remonline.com e-mail: jim@remonline.com Toronto, ON M4E 1G3
General Manager Phone: 416.425.3504 Email jim@remonline.com
Senior Editor
JOHN COOPER Fax: 416.406.0882 or fax 416.406.0882
KATHY BEVAN
e-mail: john@remonline.com e-mail: kathy@remonline.com
www.remonline.com
REM is published 12 times a year. It is an independently owned and operated company and is not affiliated with any real estate association, board or
Director, Sales & Marketing Art Director company. REM is distributed across Canada by leading real estate boards and by direct delivery in selected areas. Subscriptions are $40.95 per year
DENNIS ROCK LIZ MACKIN (including $1.95 GST), payable by personal cheque. Entire contents copyright 2008 REM. All rights reserved. Reproduction in whole or in part
without written permission from the publisher is prohibited. The opinions expressed in REM are not necessarily those of the publisher.
e-mail: dennis@remonline.com
DECEMBER 2008 Graphic Design ISSN 1201-1223
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Cover photo: SANDRA GOODER
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6 REM DECEMBER 2008

DOJ, NAR settlement about an MLS’s failure to act in


accordance with the decree,” DOJ
lawyers said.
Modified VOW Policy to be codi-
fied in the settlement to make
explicit that, in cases where sellers

moving forward By Matt Carter


MLSs “routinely turn to NAR
for advice and approval on various
issues in order to maintain cover-
age under NAR’s insurance,” the
instruct their broker to withhold
information about their property
or address from the Internet, that
VOW brokers can still provide
he U.S. Department of brokers cannot withhold sellers’ franchisor that operates VOWs for
T Justice and the National
Association of Realtors
have agreed to minor modifica-
listings from display on VOWs.
The proposed settlement
would also allow brokers to operate
hundreds of franchisees.
ZipRealty, which founded a
VOW-based brokerage in 1999
DOJ said, and are expected to con-
sult with NAR to make sure their
conduct was consistent with the
information on those listings by
other methods – such as e-mail or
fax. NAR and DOJ agreed to a
proposed settlement. minor change in language to
tions to their proposed settlement referral VOWs, which allow and operates in 35 major markets, accomplish that goal.
of the government’s antitrust law- prospective buyers to search for said the proposed settlement If any MLS failed to comply
suit against the Realtors’ associa- and NAR did not take action, the Washington-based MLS4own-
homes online, but directs them to “favours public and consumer
tion, paving the way for a final Department of Justice said it could ers.com, a flat-fee, limited-service
other brokers or agents when they interests.” In its comments, the
judgment in the three-year-old pursue further antitrust charges brokerage, asked for clarification
are ready to see a home in person, company said MLSs must be held
case. to applying the same policies, rules against NAR or sue an MLS on whether the DOJ views NAR’s
negotiate a price, enter into a con-
tract, and close the deal. and regulations to VOW brokers as directly, if needed. Internet Data Exchange Policy as
The government says the set- violating antitrust laws.
tlement, announced in May, will Existing referral VOWs have traditional “bricks-and-mortar” Prudential Real Estate, which
brokers, and not subject VOWs to operates VOWs for 480 fran- MLS4owners.com maintains that
give consumers access to multiple established relationships with it does, by permitting brokers oper-
listing service data on homes for Internet companies and developed additional costs, fees or restric- chisees, asked that the Justice
tions. Department clarify provisions of ating IDX websites to exclude
sale similar to that enjoyed by “significant numbers of potential exclusive agency or limited-service
Realtors. After wrapping up its buyer leads,” the DOJ says, and the The proposed settlement the settlement. Prudential com-
plained that requiring customers of listings from their own IDX web-
review of public comments submit- proposed settlement prohibits requires NAR to withhold insur-
a VOW broker to agree not to copy sites.
ted during a 60-day window, the MLSs from standing in the way of ance from and report to the DOJ
DOJ proposed leaving the settle- VOW brokers referring customers any MLS that “refuses to adopt, or redistribute listings they receive The government “takes no
ment virtually unchanged. to other brokers for compensation. maintain, act consistently with, or might prevent them from saving position as to the permissibility
Brokers who are MLS members enforce” its terms. NAR would copies of listings or sharing them under the antitrust laws of NAR’s
But in its response to com- IDX policy,” the DOJ said in its fil-
would also be allowed to operate also be required to forward to the with someone in order to consult
ments received from the industry, ing.
their own referral VOW or con- DOJ any communications it with them about a purchase. The
the DOJ shed some light on how it
tract with an affiliated VOW part- receives concerning any MLS’s DOJ and NAR agreed that the Michael Erdman, a Chicago
expects the agreement to be
ner. As long as a broker “actively noncompliance with the terms of provision – intended to protect lawyer who has been monitoring
enforced: by NAR. The govern-
endeavours to obtain some seller the proposed settlement. MLSs from someone using a VOW the lawsuit, said in an email to
ment also left the door open for
clients... or some buyer clients to The DOJ “believes that these to access and sell MLS data to Inman News that while DOJ
future antitrust action concerning
whom it will offer in-person bro- provisions will cause MLSs to com- third parties – was too broad. apparently won’t be modifying the
NAR’s Internet Data Exchange
(IDX) policy. kerage services,” it can become a ply with the modified VOW Policy The provision will be modified proposed settlement on that point,
member of the MLS and use MLS and will provide the Unites States to allow the copying and redistrib- “it was crystal clear that it is not
In its September 2005 lawsuit, taking a position on whether the
data to populate its referral VOW. with the ability to detect whether ution of data “in connection with
the DOJ alleged that NAR’s policy IDX policy, as written or applied, is
The DOJ received nine com- MLSs are, in fact, complying,” gov- (a VOW customer’s) consideration
on “virtual office websites,” or fully compliant with federal
ments on the proposed settlement, ernment lawyers said. The agree- of the purchase or sale of an indi-
VOWs, violated antitrust laws. antitrust laws.”
including two submissions from ment assumes that NAR “would vidual property.”
The policy alleged suppressed com-
petition from real estate brokers VOW brokers and a real estate find out through multiple channels Prudential also wanted the – Inman News REM
who gave consumers access to mul-
tiple listing service data on a par
with that enjoyed by Realtors
through password-protected sites.
By allowing brokers to with-
Demand for homes ‘strong by
hold their sellers’ listings from
VOWs, NAR restrained VOW
brokers in their ability to compete
with traditional brokers, who often
historical standards’ - CMHC
LS sales, which reached a record level of 523,701 in 2007,
provide information on MLS list-
ings by hand, mail, fax or e-mail,
DOJ lawyers said.
M will moderate in 2008 to 452,225 units, and in 2009 will
move to 433,375 units, says the latest forecast from Canada
Mortgage and Housing Corp. (CMHC).
By blocking VOW brokers
from allowing their customers to “Despite a moderation in MLS sales, demand for existing homes
review the same set of MLS listings will remain strong by historical standards,” says CMHC in its latest
that traditional brokers can pro- housing outlook. “With housing markets having become balanced
vide to their customers, NAR’s across Canada, the rate of growth in the average price will moderate.
rules “restrained VOW brokers Average prices will reach $306,500 in 2008 and $306,700 in 2009.”
from competing in a way that is The agency says new home construction will moderate from his-
efficient and desired by many cus- torically high levels, to reach just under 178,000 units in 2009, a level
tomers,” the DOJ said. that is consistent with demographic fundamentals.
The proposed settlement “High employment levels, rising incomes and low mortgage rates
requires NAR to modify its chal- have continued to provide a solid foundation for healthy housing
lenged VOW policy, making it markets this year,” says Bob Dugan, chief economist for CMHC.
clear that brokers can operate “Housing starts will moderate to 212,200 units in 2008 and 177,975
VOWs “without interference from units in 2009.” REM
their rivals,” and that traditional
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putting your goals first. When it’s done right, planning can help you maximize what you’ll get out of your business when you
decide the time is right to step down. And that’s true whether that time is just around the corner or years into the future.
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© Realogy Corporation. The Coldwell Banker logo and trademark are registered marks licensed to Coldwell Banker Real Estate LLC and used by permission.
8 REM DECEMBER 2008

FVREB wants action on drug houses


By Jean Sorensen
.C.’s Fraser Valley Real how municipalities are citing were unable to seize any prohibit- could be simply painting the walls The FVREB’s first move on
B Estate Board is leading a
move to have municipali-
ties register houses used for illegal
these properties, he says, but there
is the issue of when. (In
Vancouver, a notation was placed
ed substances.
Neufeld says that setting down
standards and establishing a cen-
and shampooing the carpet,”
Neufeld says. Remediation is com-
plex, he acknowledges, because it
the issue of a uniform reporting
and remediation began with com-
missioning a report on the scope of
drug operations (IDO) in a consis- on the property file only after a tral registry or uniform reporting will vary according to the size, the problem. The 50-page report,
tent manner. second grow-op incident was dis- method may require a provincial length, and type of operation. available to other Canadian real
“Every municipality is moving covered at the property, not the legislative change to the powers of Ken MacKenzie, FVREB’s estate boards, is entitled The
towards this right now in one way first time. As well, there is a ques- municipalities, and privacy con- executive officer, says there is also Impact of Illegal Drug Operations on
or another and doing it indepen- tion of the scale of the operation cerns may need to be addressed. a further downstream concern for Housing.
dently and with a different conclu- and the impact on the house. Was “But, we believe the health of the owners or renters of an IDO The board’s next effort was
sion,” says FVREB President it used to grow a dozen plants for individuals moving into such a house. “There is a public interest organizing and hosting a confer-
Kelvin Neufeld. “We want to get personal consumption or three house should have priority over concern,” he says, as often the ence for Realtors, police, firefight-
everyone working together and large cash crops annually for a privacy,” he says. houses are prone to break-ins ers, legislative representatives, and
get a standard way of doing number of years? Neufeld says the A central registry might also be from individuals intent upon municipalities to discuss the prob-
things.” individual purchasing the home able to track homes that trans- stealing drugs. These “grow-rips” lem. The October event drew 100
Neufeld says there are two key should have the right to access ferred between drug operations can place families in jeopardy and delegates. Neufeld says there is
issues facing the seven municipali- that information and make an owners when they were busted, cause loss of property and damage now a task force being formed,
ties that make up the FVREB in informed decision relating to the and were then used a second time. to the home. which will include members from
Lower Mainland area. There is the risk in purchasing the property. “I am sure police already have that MacKenzie says that five years the municipalities, police, fire-
lack of a central registry or uni- There are also cases where information,” says Neufeld, ago, the FVREB was instrumental fighters, Realtors, and others
form method of registering when a municipal inspectors have given a although firefighters and inspec- in bringing forward (with the Real affected by the IDO houses.
house has been designed as an 24-hour notice of entry to the tors may not be privy to it current- Estate Board of Greater Support has also come from local
IDO, and there are differing defin- owner, and upon inspection found ly. As a result, when there is a fire Vancouver), a disclosure form politicians. “We have also asked
itions for remediation. the grow-op cultivation system at a home, firefighters are going in where a seller indicated if the the B.C. Real Estate Association
Some municipalities have had been stripped out, but suspect blind. The scenario can be daunt- house had an IDO history. That to be part of it,” he says.
already taken action but home- electrical or ventilation systems ing as drug dealers booby-trap system was eventually adopted Neufeld says he is hopeful that
owners or real estate agents are remained. premises, says Neufeld. Firefighters throughout the province. the work done by the task force
faced with a range of places to look “Sometimes you have to puzzle have encountered curtains made However, there are loopholes will serve as a lead for other
for this information. For example, it out,” Neufeld says, adding that of fishhooks in doorways, and car- because the seller may not dis- municipalities in B.C. to follow.
Abbotsford places an IDO desig- municipalities need guidelines for pets laid over pits. close, or may have acquired the He says he is unaware of any other
nation on the title, while Surrey how to evaluate and record these On the issue of remediation, property through a private trans- co-ordinated effort in Western
places it on the tax rolls. houses where suspected grow oper- there is no standard concept of action or marital settlement and Canada to identify and register
Not only is there an issue with ations existed – even when police what that means. “In some areas it not know the history. IDO houses. REM

Online listings battle sweeps U.K. By Bradley Inman

espite the housing mess in Organized by the country’s largest are beginning to close offices, says EstateAgentToday. ing property portals. Property swap
D the U.K., there is no short-
age of innovation in the
technology real estate sector as
estate agencies at the beginning of
the decade, Rightmove is the lead-
ing portal for consumers and estate
which is Rightmove’s core revenue
source. Further pressure is being
brought by free listings sites.
The listings debate in the U.K.
is familiar to the tension in the
U.S. with Realtor.com and web
sites are becoming more popular in
the down housing market as home
sellers consider swapping property
start-up companies and main- agents. One of those is Globrix.com, upstarts over the last decade. as an alternative to selling. One is
stream media firms like News The company chose a winning which is a free-to-list property por- However, the tension is somewhat PropertySwapShop.
International race to take advan- business strategy a few years ago, tal that is backed by News different because there is no MLS Bloggers have also popped up in
tage of the opportunity online with charging estate agency offices a International. It has an estimated in the U.K. and Realtors in the the U.K., offering market insight
property sales and rentals. monthly subscription fee for show- 500,000 unique visitors per month, U.S. do not have to pay for upload- and analysis of the market and the
“In some ways, we are ahead (of ing listings on Rightmove. As its around 20 per cent of the traffic ing listings. industry. TheRatandMouse Blog is
the United States), and in other revenue ramped up, the company going to Rightmove, according to Consumer home valuations are well read, and written in the spirit
ways we are behind,” says Ed launched an advertising campaign Globrix. Rightmove claims to have offered in the U.K. with sites like of Curbed.com in the U.S., snarky
Freyfogle, who founded and runs with a popular soccer player that six times the traffic of any other Mouseprice. In beta, the site is but factual with supporting pic-
real estate website Nestoria, which built the brand with the public and real estate portal, according to a offered by Calnea Analytics, which tures. Blogs in the U.K. do not
provides real estate traffic to a with the industry. report in online property magazine provides market information to have as many commenters as found
range of European Internet sites, Today, the site is further popu- EstateAgentToday, which did a sur- institutions, estate agencies and in the U.S., as posters are more dis-
charging for clicks. larized as estate agents show the vey of estate agents on the question government boards. creet and less hysterical than com-
Competition in the online sec- URL on property signs and in print of free sites and where estate agents Global search sites are emerg- menters stateside.
tor heated up in the last year as and offline ads. Today, most sellers would put their listings. Globrix is ing all over Europe as the invento- A popular item recently was
“free-to-list” sites popped up, com- expect their listings to be put on also planning to expand to the U.S. ry of homes explodes and sellers are the sale of a mile-long underground
peting with the dominant online Rightmove. Nevertheless, the pub- The National Federation of looking for buyers everywhere. Cold War tunnel. It may be a good
real estate company in the U.K., licly traded company will likely Property Professionals was also Globaledge offers real estate com- place to hide out during Europe’s
Rightmove, which was once unaf- face a revenue squeeze as the hous- preparing to launch a new free list- panies programs for global market- economic travails.
fectionately called Doorknob. ing market sputters. Estate agencies ing site, dubbed Propertylive.co.uk, ing and provides updates on lead- – Inman News REM
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10 REM DECEMBER 2008

Brookfield fund
royalties up 3.8%
he Brookfield Real Estate Soper says real estate resale
T Services Fund announced
that royalties for the quar-
ter ended September 30 were up
markets in Canada are being affect-
ed by a drop in consumer confi-
dence resulting from widespread
3.8 per cent over the third quarter economic concerns, originating
of 2007 to $9.6 million. largely from the U.S. credit market
Distributable cash for the third crisis.
quarter increased 1.4 per cent to “While we anticipate further
$6.9 million ($0.52 per unit), up softening of Canadian real estate
from $6.8 million ($0.51 per unit) markets until consumer confidence
Colour Tech would like to in the third quarter of 2007. The improves, we do not foresee a U.S.-
fund generates cash flow from fran- type correction as our markets are
thank all our friends and chise royalties and service fees supported by markedly different
clients for a wonderful 2008. derived from the network of real and stronger economic fundamen-
estate brokers and agents in tals than those that American
We are proud you have Canada operating under the Royal homeowners have been wrestling
trusted us with all your LePage, La Capitale and Johnston with since late 2005,” says Soper.
marketing and promotional & Daniel brand names. “The reduction in unit sales from
President and chief executive record levels and decline in trans-
needs and are looking Phil Soper says, “The fund per- action dollar volume in Canada in
forward to another happy, formed well in the third quarter, in recent quarters may reduce the
spite of a drop in overall industry number of agents entering the
healthy and prosperous transactional volumes, which high- industry. When markets slow,
New Year! lights the business’s structural fea- established brands can gain market
ture that places an emphasis on share as their reputation and sup-
fixed royalty fees driven by the port services make them a preferred
Happy Holidays number of Realtors in our network. franchisor or employer. The fund’s
The Colour Tech Team In 2007, 66 per cent of our annual three leading brands are well posi-
royalties were fixed. That propor- tioned for a market slowdown.”
tion is expected to increase in The company says that “agent
2008, as 77 per cent of La Capitale’s loss may occur with less productive
royalties are expected to fall into agents who are unable to generate
the fixed category.” sufficient income to meet their
While fixed franchise fees needs during a market correction.
increased 18.2 per cent in the quar- The fund’s agents on average as at
ter, variable franchise fees December 2007 were 67 per cent
decreased by 6.1 per cent, the com- more productive than the rest of
pany reported. Premium franchise the industry, and therefore manage-
MARGARET’S LITTLE fees, which are derived from 24 ment believes are better able to
KNOWN FACT franchises in the Greater Toronto withstand a significant reduction in
Area, declined 20.3 per cent. the market.”
Colour Tech is a Canadian owned company During the third quarter of “Early in the year, we set an
and has been serving Real Estate 2008, the fund had a net decrease objective to grow fund revenue by
professionals since 1991. of five Realtors from January 1, 10 per cent in 2008,” says Soper.
Margaret Campbell 2008, but it had total “organic” “While we had anticipated and
Colour Tech Founder growth of 322 Realtors during the planned for a softening in the mar-
first nine months of 2008. This, ket, the reduction in industry trans-
along with the 1,272 Realtors ser- actional dollar volume has been
vicing the 60 franchise agreements greater than expected.”
Colour Tech Marketing Inc. Phone: 905.820.6566 acquired by the fund on January 1, Last month, the fund’s parent
1-4160 Sladeview Crescent Toll Free: 1.800.410.4510 2008, combined for a total increase company, Brookfield Real Estate
Mississauga, Ontario L5L 0A1 E-Mail: print@colourtech.com of 1,594 Realtors for the nine Services Ltd., announced it has
months ended September 30, 2008, signed an agreement to acquire
up 12.1 per cent from December U.S.-based GMAC Home
31, 2007. As of September 30 this Services, which includes GMAC
Building better business...with Colour Tech Marketing Inc. year, the fund network was com- Real Estate, GMAC Relocation
prised of 338 independently owned Services and the GMAC Home
www.colourtech.com and operated franchises operating Services Mortgage brokerage. That
from 644 locations serviced by deal was scheduled to close in
14,766 Realtors. November. REM