Choosing a realtor and brokerage

There are different types of brokerages and realtors in Calgary. Having a few insights may help you decide which brokerage and agent suits you best.

About the brokerage

The Real Estate Act Rules mention there are different classes in real estate. There is the brokerage, the broker, the associate broker and the associate (which we often call Realtor).

The brokerage is actually the only entity that is allowed to trade in real estate. A brokerage holds the licenses of the broker, the associate brokers and the associates who are associated with the brokerage. If these last three classes trade in real estate, they can only do so on behalf of the brokerage they are associated with.

The broker leads the brokerage but the broker is not necessarily the owner of the brokerage. Anyone can start a brokerage as an investment or business. But every brokerage must appoint one broker to permit the operation of the brokerage.

An associate broker is an associate who has all the education of a broker but doesn’t run or lead a brokerage.
Tanja van de Kamp is an associate broker with Real Estate Professionals Inc. She has the extra education that would permit her to establish her own brokerage or lead a brokerage. Ariette van Pelt is an associate with the same brokerage, Real Estate Professionals Inc. As realtors, we can pick any brokerage in Calgary.

Differences in real estate brokerages

There are hundreds of brokerages in Calgary, and they all work pretty much the same. A brokerage holds the licenses of associates (real estate agents) and associate brokers and takes care of all conveyancing. The broker is also the main contact for a realtor in regard to questions and issues.

Every brokerage charges a monthly fee. Some fees are expensive; some are inexpensive. Much depends on the broker and what s/he offers. Some offices have a strong, recognizable brand with the public because they advertise a lot. That comes back in higher fees for the realtor. Another way one broker can differ from another is in offering marketing and training to joining associates. Some brokerages offer more training to their agents than others.

Offices are independently owned and many are franchises

Some brokerages in Calgary are large and have about 500 to 600 agents, while some have only a handful of agents under their wings, and some are totally on their own. Usually, the website tells you who is part of the brokerage.  You can also check with RECA, the Real Estate Council of Alberta. This site will tell you exactly which agents are in which brokerage (in Alberta).

Many people think that Remax is the biggest brokerage in Calgary, while in fact, they are not. At the time of writing, Re/Max has 9 different offices in Calgary, but every office is independently owned. Any broker (or investor) who starts a brokerage can choose to buy a franchise such as Remax, Century 21, Royal LePage or Maxwell. To the public, each of these may look like it is all one large office. However, every independently owned office has its own way of doing business with realtors in terms of support and training. As such, Remax is by far not the biggest brokerage in Calgary.

Our office, Real Estate Professionals Inc, is locally owned by one family and offers two locations. Real Estate Professionals Inc. is currently the second largest brokerage in Alberta with around 400 agents.

Brokerages and marketing

In terms of marketing, a broker can go one of several ways. A brokerage can focus on their services to the public: a full service brokerage or a discount brokerage.
Most brokerages in Calgary offer full services, while only a few choose the concept of being discount brokers. A realtor will choose a discount broker if s/he believes in the concept. If an agent decides to join a full-service brokerage, s/he cannot advertise as a ‘discounter’.

Some brokerages like to focus on a specific target group. For example, Sotheby’s has its marketing focused on the luxury segment. Nevertheless, many brokerages have a luxury segment these days. ‘Luxury segments’ are just buzz words, a marketing term, nothing more. In our opinion, if you ask any agent to list a cheap ‘handyman special’, s/he will not refuse. For every agent, a listing is a listing. And every agent can successfully list, market and sell a luxury home. In our opinion, you don’t choose the selling agent based on his/her brokerage, but on the personality of the agent. As the marketing of a brokerage is not what will sell your house.

Luxury segment and ‘high end’ brokerages

It is a misconception to think that because your home is worth over a million dollars, it is necessary to choose an agent with a ‘high end’ brokerage. Eventually, every home, big or small, cheap or expensive ends up at the MLS. The MLS is what sells your home, in conjunction with how good your realtor is, which has nothing to do with the brokerage. For example, if you live in Bowness your home can be a $250,000 dollar condo, or it can be a $3,000,000 property near the river. Both homes end up on the same MLS where the public shops for homes. The realtor who joined the high-end brokerage will take either listing because a listing is a listing. It really is make-believe that an expensive home needs a ‘high-end’ brokerage in order to sell. Besides, most transactions, more than 95%, are done with two agents, a buying and a selling agent. The ‘high-end’ selling agent most likely does not bring the buyer for your home. The buyer of your home comes via another (buying) agent who found your home listed on the MLS.

Real Estate teams

Don’t mix up brokerages with realtors who have a team working under them. The main face on the bus bench and on billboards is not a brokerage, but just a realtor with other agents working on his team. These teams sometimes like to pretend they are brokerages, but they are not. They are real estate associates, just like us. But as a team of agents under only one name, the team leader can advertise that s/he completes 100’s of transactions a year. However, it is not the face on the billboard, but a team that completes all those hundreds of transactions a year. It is the face of the person on the billboard who is willing to spend thousands of dollars a month on marketing to rein in buyers and sellers. It is true that finding clients is not always easy for realtors. Many starting agents underestimate that fact. Often these beginning agents join such a team where potential leads are given to them in exchange for 25% to 50% of their commission. The RECA will show you the difference between brokerages and realtors. If you enter a realtor’s name, it shows you exactly which brokerage this agent is part of.

 

A few pointers to consider when choosing a Realtor

In our opinion, it doesn’t matter with which brokerage an agent is associated. Eventually, it will be about the agent as a person, his/her attitude, his/her work ethic and his/her knowledge. And with over 5,000 agents in Calgary, there is plenty of choice!

Here follow some considerations:

• The part-time vs the full-time realtor. There are many part-time realtors who hold a job on the side. Or the reverse, their real estate business is secondary to their regular job. We believe part-time realtors are the cause of real estate fees being so high. The group of part-time realtors doing only 1, 2 or 3 transactions a year is very large in Calgary. They easily ‘nibble’ away more than 50% of the total transactions for the full-time realtors.
• The big teams vs the single realtors. Calgary has several large real estate teams and they do lots of business because they spend a lot of money on their personal marketing. The leads they catch with their marketing are given to members of the team. These teams often consist of new or young realtors closing the transactions. They have to give up to 50% of their commission to the team leader, who is usually the face of the team on bus benches and billboards. Most buyers or sellers never get to speak to the main face anymore, once they are under contract.
• The small teams of 2 vs the single realtor. Over the last year, a clear increase appeared in teams of 2 realtors. It is a fact that being on one’s own can take a toll on one’s private life. This business is 24/7. Working with another agent gives the realtors a way to help each other out. Also, combinations like father & daughter teams and husband & wife teams appear more often. Some high performing realtors work on their own, but with one or two good assistants they can still do many transactions a year.
• The rookie vs the veteran. This situation can give much food for thought. The rookie will most likely work hard, but the worry is that s/he may also make mistakes or have less experience in negotiations. The veteran has seen it all, s/he thinks, but the worry is that s/he may not care enough.
• The patient vs the pushy realtor. This needs no explanation. Especially when buying, make sure your agent is patient. It is very important that the realtor takes the time to explain the process of buying or selling. And in the case of buying a home, the realtor must be patient, not pushy, in showing as many homes as the client wishes to see.
• The needy vs the settled agent. Stay away of the agent in need of a paycheque. This rarely works out in favour of a buyer or a seller! Because realtors get paid by a percentage, your $10,000 is only $150 for the realtor. The hungry agent easily guides clients in the direction where the deal is done fast, and not always in the best interest of the client. Those realtors in need of money can advice a seller to price your home higher, just so the seller hears what s/he wants to hear. This way the realtor who portraits the reality of the value of the home gets bumped out.  You can recognize a money hungry realtor because s/he easily slashes his/her commissions. That can be a sign that this realtor won’t negotiate on your house price, either.
• The timid vs the bragging realtor. Clothes and cars do not necessarily show the true picture of the agent’s success. Some agents in Calgary ‘walk the walk and talk the talk’. But they don’t necessarily perform in the best interests of their client. Furthermore, the braggarts tend to be poor listeners.

Questions to ask a realtor

Whom you choose as a realtor is not easy. We always see it as wise to interview 3 agents before making a choice. Asking a few questions can clarify a lot. Sample questions you may wish to ask are:

• How long have you been in business?
• Are you part-time or full-time in real estate. This may determine the availability of the agent.
• How does your brokerage support you with training, or where or from whom did you get the most training? (We admit that the education in real estate is limited. Realtors learn it in the field, via office training or with a mentor.)
• Have you extended your education? Have you taken specialized courses such as to be condominium specialist or associate broker? This shows the interest and dedication of an agent in this work.
• Why did you join this particular brokerage? This tells you a bit about the brokerage and also about the realtor as a person. In general, a realtor chooses a brokerage that fits his/her personality. Individuals choose a brokerage for its training and support, or they choose the brokerage for its branding. However, branding does not sell your house. The MLS website (realtor.ca) in combination with a good and knowledgeable realtor sells your house.
• How many transactions do you complete per year? Be wary; it is our experience that many realtors are not truthful about this. Besides, the number of transactions does not necessarily indicate the qualities of a realtor.
• Can you provide me with a CMA, a market evaluation? What this CMA shows already learns you a lot about the type of realtor you are dealing with. Some agents show you 4 prints from the MLS to compare; some agents make an entire report, including an extensive explanation and some market background.

Read our answers to 18 of your questions when choosing a Realtor

What is the power of a good realtor?

The personality, negotiation experience, work ethics, knowledge and availability to answer your questions are a few strong traits a good realtor has to help you buy or sell your real estate. Where do we fit in this all these options? We are a team of two, and, yes, we are a couple. We came from the Netherlands and are proud of our European work ethics. We had to start from scratch and didn’t have the luxury of family, friends, co-workers, church members or children in hockey games etc. to provide a steady stream of business. We complement each other a lot. Tanja is a lawyer (crown prosecutor) by trade and is very strong in negotiations and strategic thinking. Ariette is a ‘worker bee’ taking care of the million regular things in real estate such as marketing, maintaining the website, administration and showings. We have been in business since 2009, meaning we are ‘over the hump’ of being the scrambling rookies. We are proud of the fact that 80 to 90 percent of our yearly business comes via referral. We care, we are transparent, and we are patient. If you would like to learn more about us, visit our about-us website or check out our reviews on Google and Facebook.

 

 

Please note: The above is general information and not considered legal advice. We do our best to write informative articles about real estate in Calgary, Alberta. If you have any questions or concerns about our comments, please feel free to contact us or speak to your legal advisor.