BY DOUG MCCALLUM

This is a wake‑up call to the real estate regulators,
federal competition regulators, real estate associations and to all brokers who
have let our referral system be abused by a niche group within our
industry. 

These are corporate relocation companies who operate with
the veneer of a real estate assistance company to help Corporate America in
transferring its personnel.

Realtors are asked to talk to corporate relocation
counselors about a specific client. Why are we, as licensed Realtors, talking
to anyone with confidential information about Joe Public? Why do we accept
directions so recklessly from corporate relocation counselors who are not
licensed? Why are the corporate relocation brokers allowed to get away with
this?  Where in your Real Estate Act is a
special section for corporate relocation companies?

One of the key words here is the word trade. Are the
counselors and all of the management teams behind these corporate masks not in
the midst of trading in real estate? Are they not negotiating, looking through
confidential documents, and making recommendations to the transferee,
soliciting Corporate America for more business? Where do they get off dictating
to me my commission rates?

Do these people not have to be licensed? I know I do if I
want the business, and I know my broker would have a regulator all over its
tail if I was not licensed.

My company can offer all of the same real estate tools as a
corporate relo company. Using the Internet, I can sub‑contract to or create
associations with many competitive moving companies, provide guarantees, work
directly with in-house mortgage brokers and in-house lawyers, and work with
high-calibre Realtors who don't mind paying me a 20 to 25 per cent referral fee
but would not work for anyone at 30 to 40 per cent. I can compete!

What would Corporate America do without corporate
relocations companies? They would come to us. Why does Corporate America use
corporate relocations? For money! If they want to save money, they should make
better use of their human resources departments and find the best Realtors, who
will work on behalf of the employee to assure an easy transition for their
families and to find good resale properties that are easily resalable in the
future. Who can afford to work for 30 to 40 per cent referral fees, before all
of the other company, marketing, and miscellaneous deductions? It's a joke!

What is the value of a referral? Obviously there are agents
who will support whatever is given to them, but the transferee expects the best
and the corporate clients expect their employees to get the best money can buy.
Where do you think some of that money is going? Well, sometimes it is directed
back to the corporate client — in fact, a lot of it has been directed back to
help offset moving costs. Is this legal? Hell, no! Talk about a conflict of
interest. Is it disclosed to the client (remember, the transferee)? Not likely,
and that's jail with a criminal offense!

There is no room in our associations for sacred cows. The
time has come to make changes, because every day that goes by, more and more
money is illegally flowing though our system, and the relo companies involved
are getting bigger and stronger.

Another issue — in all of that paperwork that relos are so
obsessed with, where is a clearly defined Agency Agreement? One that spells out
this Multiple Agency between a transferee, a Realtor and its broker, the
corporate relocation company, and finally the corporate client? Who is the real
client here? Is it not the transferees whose names are on title? Also, when
should the employee read this letter of Multiple Agency Disclosure? Should our
associations not protect its members with a Standards and Business Practice
Rule to deal with referrals and help create a document that all must sign?

A fourth party should only collect referral fees if they
provide the Realtor with a fresh, new referral. 
No more fishing after the fact, blacklisting Realtors who will not pay
after-the-fact referral fees.

I would like to ask our regulators and associations, do you
honestly think that corporate relocations offer an essential service within our
industry?  Sorry, we the licensed, active
real estate companies can offer more, we can do a better job and we can do it
legally.

Regulators should search through all of the books to see
where the money is going. Fines should be administered and funds returned.
Regulators should see if the office policies and procedures in dealing with
outside real estate companies include an emphasis on disclosure, agency, and
confidentiality. They also must make sure anyone involved in trade has been
keeping up on their license and education requirements.

To the Competition Bureau, check out how skillfully the
corporate relocation companies leave an employee dangling on a rope when relo
is a little slow in getting to their referrals, keeping a transferee at bay by
suggesting withdrawal of certain company benefits if they don't find a co‑operating
Realtor (in other words, someone who will accept a 30 to 50 per cent
deduction). To the associations: You owe it to your members to develop a fail‑safe
way to protect the referral business. Perhaps it is time for you to suggest
dropping referrals from the Real Estate Acts altogether.

As for a way of attacking the monster within: Use a document
similar to the disclosure form that Calgary Real Estate Board created a year
ago, called a Corporate Relocation Disclosure Form.  You can find it at www.realtorlink.org in the
Calgary web
site, go into Forms/ standard forms/ Corporate Relocations Disclosure and an
Acrobat copy is there for you to peruse. Feel free to massage it to suit your
company’s policy, don't be afraid to ask pertinent questions that would be a
prudent way to protect your broker from sending out referral fees to parties
who may not be entitled to. It's in the Real Estate Act: No license, no
money!  It is now time to level the
playing field.

There are some good, legitimate relocation companies doing
business in our industry. They understand the importance of the rules and
regulations and the level of professionalism we strive for. If we don't reach
out, in future they will be lunch to the predators.

Doug MacCallum is with Re/Max Mountain View in Calgary. He has 15 years
of real estate experience, including 14 years working with national and
international relocations. He was  #1 Top
Branch Producer for 12 consecutive years, and a broker for six years.
www.dougmccallum.com

 

 

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