You can’t stick your head out from under the bedcovers without hearing about globalization these days.

The media rarely misses an opportunity to hammer home the point that due to technology, the world is shrinking and economies everywhere are increasingly interconnected.

Real estate broker of record Marian deWever in Stratford, Ontario gets that. Although she’s aware that not everyone will agree with her, she strongly believes that despite the global economy, real estate should remain a local business.

“A variety of things contribute to value that Realtors cannot possibly know without being an area resident,” even if they do online research, she says. These can range from the various intricacies of understanding which neighbourhoods and school districts are desirable and where the boundaries of these lie, to in-depth knowledge of licensing, zoning, recreational facilities, parking requirements, pricing, history and crime rate.

Every community is unique, and when agents from far-flung municipalities who know little or nothing about an area represent clients moving there, they do them a disservice, deWever says.

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Marian deWever
Marian deWever

This goes on everywhere, she says, not just in pretty Stratford, the hometown she shares with teen heartthrob Justin Bieber. (“He’s here a fair bit,” she says, for the benefit of any REM-reading Beliebers. “He still has high school buddies in Stratford and he comes and chills.”)

Mairan deWever, who has been in real estate for 26 years, is with Home & Company Real Estate, a boutique-style operation. In her observation, “There’s an influx of people purchasing in Stratford from larger destinations, such as Toronto.”

Gwen Kirkpatrick, EO of the Huron Perth Association of Realtors (HPAR), which includes Stratford and surrounding towns such as St. Marys, agrees that like many areas, theirs has started “to experience more inter-board listings,” particularly in the past couple of years.

While questioning whether agents from outside the area – some even from outside the province (which complicates insurance and liability issues) – are able to represent their buyers properly, the association’s main concern in this regard is the significantly increased workload it faces as a result of processing the added listings.

To help with this, some regions in Ontario now have plans to pool their data, “merging the databases of various nearby communities,” Kirkpatrick says. HPAR has not jumped on to that train yet, “but we will see,” she says.

There are many reasons a community becomes a draw to outside buyers…the fact that it is Justin Bieber’s birthplace not necessarily among them. Stratford, besides having a reputation as one of Canada’s loveliest cities and being home to the Stratford Festival, is far more affordable than Toronto and some other nearby municipalities, deWever says.

“Stratford has become a retirement destination,” she says. People buy second and investment properties in Stratford too, she adds, with one common usage being conversion to B&Bs. One fairly common problem deWever has witnessed with out-of-area agents is that, not knowing Stratford’s zoning and licensing requirements, they can wind up selling properties to aspiring B&B owners that do not qualify or meet the requirements once all is said and done.

Open houses by outside agents are another issue.

“We’re unique in Stratford in that all real estate offices are closed on Sundays, so open houses are on Saturdays instead,” says deWever. “But outside Realtors will have an open house on Sunday because they don’t know the market. I’ll see the signs – it’s just comical. Everyone else was out the day before. How is that in the best interests of clients?”

Similarly, outside real estate agents representing clients in various other communities may be unfamiliar or out of their depth dealing with issues such as soil erosion, Aboriginal land claims and so on. (The same goes for outside appraisers – they may not be able to decipher comparables properly since they don’t know the market, deWever says.)

“We’ll see Toronto Realtors with their buyer clients (sellers too, but less often),” says deWever. “The practical solution is for outside Realtors to understand that it is not in their clients’ best interests. Instead they should set up a referral network. Or if they are not comfortable handing off the client, they can come with them and work with us on a referral basis – let us be involved.”

She suggests that some good places to find salespeople to refer to clients include conferences, real estate Facebook groups for the target area and Realtor.ca.

Something to keep in mind, she says, is that referrals are often reciprocated.

Many agents argue that no one likes to lose clients and that selling out of area has worked well for them. But deWever feels it’s not worth the possible consequences of being unfamiliar with the local market and having that backfire. There is also the matter of time effectiveness, as hours of driving to and fro may be involved, she says.

In her opinion, “You are far better to build a referral network of like-minded Realtors rather than take the liability” and wasted effort.

Regina Dutt
Regina Dutt

Regina Dutt of Keller Williams Black Diamond Realty in Burnaby, B.C., concurs. “Absolutely I have a referral network,” Dutt says. “I would rather send a client to a specialist in an area than fake it.”

Local sales reps, knowing the area, are able to be passionate about it and to provide a history “that is not off the Internet,” Dutt adds.

Ron Stuart, partner with Harbourside Realty in Halifax, says referrals are typically 25 per cent. But he says, like most other aspects of real estate, referrals can be negotiable and competitive. “Some agents have a focus on incoming referrals and offer a premium to get the business,” he says.

Mere postings, disliked by many in real estate, are worth mentioning here.

Stuart says that he has known sales reps who “make a business of co-ordinating with an unlicensed online advertising company to obtain mere posting listings in many if not all jurisdictions across Canada. With mere postings they can avoid agency duties. The homeowner receives little or no pricing guidance.”

On the other hand, a sales rep operating under agency duties would generally have a duty to at least examine the property, provide pricing guidance and inform himself firsthand of the property’s condition, Stuart says.

The Real Estate Council of Ontario (RECO) makes it clear that sales reps need to have reasonable knowledge of what they are dealing with. Marian deWever and others argue that this is often not possible for agents from out of the area, thus compromising their transactions with clients.

11 COMMENTS

  1. It’s true when you buy a home the neighbourhood is almost as important as what is at the centre and that is the home itself. Consequently, if someone buys a home using a real estate practitioner and the home turns out to be a wreck, the quality of the neighbourhood will take on even a lessor importance. How many times can you watch HGTV and see a professional couple trying to renovate a home they just bought in Toronto and they’re sweating bullets wondering if they wouldn’t be better off just tearing it down.

    This article belongs in the pre-internet era. A practitioner is either a competent researcher or their not. Even building inspectors working for a municipality will need to review their own Bylaws before they can respond to anyone. What this article does is reinforce the low priority this industry has had for product knowledge that would pertain to the property itself!

    I didn’t see the relevance of interjecting the subject of “mere postings” into this. This discussion questioned the propriety of offering Full Agency under certain circumstances — No-Agency didn’t have a place, even as a third choice.

  2. RECOnnect Spring has the Registrar giving massive amounts of advice to consumers telling them which REALTORS they really should be looking for. In terms of this article RECO itself confirms a Local Expert is best as is one experienced in selling in the area. I guess this is the first cannon ball over the bow warning on what RECO now thinks.

    I believe this is the first time a provincial regulator has stepped out and wink wink nudge nudge told consumers WHO NOT TO DEAL WITH. Since this advice falls outside the legislation I wonder who authorized it. HMMM, I also see RECO has given some 3rd party service providers to the real estate service sector premium exposure for their businesses while not affording equal publicity to others….HMMMMM.

    Has anyone checked out RECOFACTORFICTION website for consumers???

    I am really really surprised folks. Go ahead keep on selling!!

  3. As a new buyer into Stratford – 7 years ago we found the Sunday closure strange; coming from a city that worked 24/7. We adjusted thinking, managed to buy a lovely family home on another day of the week and now also enjoy quiet Sundays. It is refreshing to pause life for a day. We have 6 other days to conduct our affairs and are better for it. :) Also we went with a local agent who knew the history of the house, all the handymen we needed to check things out for us, we got local pricing estimates quickly because of the strong knowledge base and relationships in the community.

  4. The second phase is Denial…. Its 2015, not 1978. The title made it obvious where the article was going so I had to read to see what rationale would be in this one. Interesting enough, the author points out that a non-local agent is not looking at the best interest of their clients. So define “locale”. Does that mean a region, a town, part of a city? Ask your average Realtor form Dryden Ontario what they consider local considering there are branch offices 4-5 hours away from each other. Whats local in the Yukon? There was also a list of things that a none local would not know. News flash, every item mentioned is on the internet and simple to access. My point is, don’t fight nationalization of real estate. Its coming and there is nothing that can be done. With any luck, the next step is to eliminate waste by going to ONE Real Estate Board in Ontario, one MLS provider, and service being on-line only. Some will argue saying one office cannot deal with that many realtors and they need local lobbying… Poppycock…
    I live in a small town on the shores of Lake Erie and I don’t even belong the local Board. My Board is an hours drive away and my market includes five real estate board areas. Why, because I have all the data and information, and because I can. So instead of fighting to safeguard your little corner of the world in Stratford, embrace change focus your market on Ontario and see where it goes. There might be some great business opportunities for you in London or Listowel.
    By the way, all those out of town buyers might be driving to Stratford on Sunday to go to open houses. The only one they get to see is the out of town realtor. He’s no fool.

  5. It would be sooo cool to have Sunday’s off – however is that the reality of today’s world? Regarding zoning – most City, town, village & MD websites have this information. A Realtor should counsel clients to confirm any zoning information found with the local authority and a diligent Realtor should insert a buyers condition Subject to review with the authority “satisfactory to the Buyer”

  6. Our offices in Northumberland County are also closed on Sunday, but all that means is that the Office Staff is not working – but business carries on 7 days a week including Open Houses on Saturday and Sunday. I can’t believe that Open Houses are only conducted on Saturday only – how is that serving your Clients…….

  7. HPAR Leadership,

    The moment a regional MLS system allows it’s data to be co-mingled, shared or accessible by other regional MLS systems, over time only ONE system will remain and that will be the one with the lowest membership fees.

    Allowing TREB members to post their listings on your MLS system is suicide for your local MLS and in all fairness opens your system up to unwarranted attacks from 3rd party tech companies like Rogers and ComFREE under their mls data access model called becoming a brokerage. If Rogers or ComFREE wants your data at least require they join your MLS.

    Whatever you do do not join CONNECT as you will immediately damage the businesses of all your paying members. Let the Rogers and ComFREEs pay geowareshouse fees instead of getting that data for FREE from you.

    EOs and staffs at larger MLS systems covet your membership and adding them through the devaluing of your MLS through removing your exclusivity is what they desire.

    Members of HPAR will lose all control if the become part of a larger MLS system just like the have no control over CREA. The larger the system the greater control non-registrant staff has over the eventual outcomes of registrant businesses.

    Let’s be honest even little HPAR in 2015 can operate and run the most technologically advanced MLS system for their membership at the exact same cost as TREB with the value add of employing local people to staff HPAR and give a storefront to the MLS brand they control in your region.

    If the EO has any questions of why independence matters or how to be an effect EO in making your mls system sustainable I encourage you to contact the EO of Centris and ask him the power Quebec has over even CREA in 2015.

    • I formerly worked in the Stratford real estate market and it was a pleasure having the public educated to attend Open Houses on Saturdays instead of Sundays. There has to be an agreement within the Board to comply with this standard. Koodos to Stratford for maintaining a “day set apart”.

    • I have a Team of 6 and it is part of our Team’s guiding principles that we take Sunday’s off. I have done this against the grain of almost everyone in my area for over 20 years. I always disclose our practice to each of our clients at the beginning of our relationship and only have received respect and admiration for this. The year I started this practise my income doubled. I considering taking Saturday’s off as well

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