Rankings stir up Canadian brokerages

By Jim Adair

In the United States, research company Real Trends has been producing Top 500 brokers lists for 22 years, ranking the country’s real estate firms by sides (number of transactions) and closed sales dollar volume. This year the company made its first foray into the Canadian market, and while many companies welcomed the Real Trends survey, others greeted it with suspicion or indifference. When the two lists of the top 200 firms in Canada were first released to real estate firms and selected media outlets in April, there was an uproar. Some companies felt they their competitor’s numbers were incorrect, and others were angry they were left off the lists.

Steve Murray

“There was some misunderstanding and some finger pointing,” says Steve Murray, publisher of the list and editor at Real Trends. “There were some things that were wrong with the list, so we dealt with that and took full responsibility for it.” Real Trends asked media outlets, including REM, to wait until the list was finalized before releasing it. However, one newspaper chain chose to print the top 10 from each list, despite the fact that some numbers were incorrect, says Murray. Included in the corrections was the No. 1 ranking on the dollar volume list.

The top spot on both lists goes to Royal LePage’s 15 corporately owned offices. Second place on the sides list is Royal LePage Team Realty and Royal LePage Gale – two offices in the Ottawa area with the same ownership, which allows them to be combined under the parameters of the list. Second place on the dollar volume list goes to MacDonald Realty Group’s 13 corporately owned offices in B.C.

Re/Max franchises dominate, taking 130 of the top 200 spots on the largest brokers list. The company purchased a two-page ad in the June issue of REM and reprinted the entire top 200 list.

Nicolai Kolding

Real Trends says the new lists are accurate but admit they may have missed some brokerages, particularly large independent firms. Others chose not to participate. “We know that there are companies that would qualify in this list that are not in it,” says Real Trends’ Nicolai Kolding. “We made every effort we could to reach them. We certainly respect the decision of those that we reached that chose not to participate, and apologise to any that we inadvertently did not reach.”

Real Trends sent surveys to any companies it believed might have a minimum of 500 sides closed in 2009, and received more than 200 surveys back. The information was verified by an external auditor’s letter or by approval from the franchisor.

Why would a company that knows it isn’t No. 1 in its marketplace want to be part of the survey? “There are nuggets in the list for any company to use effectively to tell people the story of who you are,” says Kolding. “You may not be the biggest but maybe you have a better per person productivity – maybe you are the biggest in a particular submarket segment or maybe your average sale price turns out to be better. Even with the relatively simple metrics that are in this – offices, agents, volume and sales – there are a number of different stats you can pull out of this. Bigger is not always the best.”

Kolding says there are some interesting comparisons between the Canadian survey results and those in the U.S. “Productivity per office was significantly higher, on average, in Canada than the U.S. (598 transaction sides per office in Canada vs. 367 in the U.S. and dollar volume $176 million (Cdn) in Canada vs. $97 million (US) in the United States),” says Kolding. “This despite the fact that the Canadian group had fewer agents per office than their comparables in the U.S.”

Murray says the difference may be because the Canadian real estate industry is more consolidated than in the U.S. and the amount of money that brokerages retain after the sales reps have been paid is less. Brokerages in Canada need higher productivity in order to survive, he says.

Real Trends plans to make the rankings an annual event and Murray says things should go smoother next year. “I think that when nothing like this has been published before, everyone is free to make their own claims – and someone like us comes out and says we verified this stuff and got third-party verification of the data…and it turns out that maybe some firms are still very large but there are other firms that are every bit as strong. It’s a stunner because all of a sudden it knocks the legs out from under your public relations.”

Kolding says the goal going forward is to make sure all firms are aware of the survey and to make it easier to submit their data online.

Both lists are available here and the full list can be purchased for $35 US.

Real Trends Largest Brokers in Canada, top 10 (ranked by sides):