On December 24, the Toronto Real Estate Board (TREB) unwrapped its new MLS system. Since then, the new system has been operating in tandem with Trebnet until TREB feels the new system can fully handle the demands of Canada’s largest board, which includes almost a third of all Canadian Realtors. In February, TREB’s executive officer, Don Richardson, spoke with REM’s Kathy Bevan about Toronto’s new MLS and its new teamwork approach to working within organized real estate.
REM: You came very close to signing on with a Canadian provider for your MLS service, then ended up going with an American company. Why?
DON RICHARDSON: We tried an extremely democratic process when we first started searching for an MLS provider. That was after coming off a negative experience with the whole TVM (Toronto/Vancouver/Montreal) project, which was a `build it yourself’ project.
We reversed gears and said we want something off the shelf, rather than putting a lot of money and effort into building something ourselves. So we did a very democratic approach and involved a lot of members in the search. It was a genuine, concerted effort to find the best company. We would have preferred that to be a Canadian company, to serve this board. But it didn’t work.
One of the first three companies we looked at was Canadian. We worked very diligently to try to make that work, but they are a company that had never handled anything even remotely like our size. We needed to have them prove to us absolutely that they could handle our numbers. We got into a disagreement among technical people as to whether or not they could handle our numbers.
It was when we were in the midst of this disagreement that David Pearce, our president, went to the board and said: “Look, we’re stalled. We promised our members that we would have a new system. Will you give me the authority and the dollars to run this in a less democratic fashion, to do a quick business‑like search for the names of the companies that come up most often as being the best suppliers to large real estate boards?”
It was amazing how quickly that unfolded. We came across Stratus and found out how very happy the Long Island Board of Realtors were with Stratus, and that’s a board of 14,000 members. We went down there and met not only with Stratus but with the board people. We did a telephone survey of some of their members as to the track record with Stratus for maintenance and up time. And it looked so good, we didn’t continue our discussions with the Canadian company after that.
Getting as far down the road as we have gone with Stratus, we still feel they are the best for us. And it was gratifying to read the latest Clareity report, where in their independent opinion of the top 10 vendors, Stratus came off as first or second in every category.
REM: Does your new MLS system totally absorb the half dozen neighbouring boards that share Toronto’s MLS data?
RICHARDSON: We all access the new system by entering www.torontomls.net but we structured it as a shared MLS system, geographically by jurisdiction of the real estate boards involved. The concept that a member is getting their services through their own local community board is emphasized with their board’s own direct home page. News that appears on that home page relates specifically to that local board. Each member can look at other boards’ news as well, by using the drop down menu.
We have also based what we are doing here on a great deal of discussion that has gone on over the years, including strategic planning sessions with CREA, OREA and the Industry Leaders Group -‑ the franchisors. Our belief is that it meets most people’s needs. It deals with business efficiencies and trying to reduce costs, as the shared MLS system should drive costs of providing MLS down. And at the same time, it allows the local identity. I don’t think many people argue that there needs to be a community entity providing certain services, while other services can be better provided centrally. The trick is to try to separate which services should be provided by whom.
REM: How do you make that separation?
RICHARDSON: By a redefinition of roles, a redefinition of relationships. I don’t think it’s any secret that a few years ago, Toronto had a reputation as being the 600 pound gorilla, the big entity on the block causing fear among other boards about expansion and takeovers. We’ve reversed that whole mode 180 degrees, because we believe that by doing so, we’ll end up in a better working relationship with all of our neighbouring boards. We first went out to the boards that are part of this shared system and said, look, we don’t want to come up with something and try to impose it on you. Our preference would be that you look at the relationship, develop a proposal and come back to us with that as a starting point for discussions. Our point was, let’s not do this by ourselves; let’s have the boards themselves, who are part of the system, create it. Right now, it looks like Durham and Brampton have taken the lead in terms of developing a proposal, which they are to presenting to us for a first look.
What we hope emerges from all these discussions would be a shared MLS system where everyone contributes and all members pay basically the same fee for the service. For most, if not all, of the other services that are offered through organized real estate, we would also hope that Toronto remains hands‑off: that each of the other boards involved finds a way to provide those other services. And finally, we hope that, mutually, we can find a financial formula that works. We all want to drive down the costs to members, both of the costs of MLS and of those other services. We’ve proven in the past year that we’ve been able to do that. The new Toronto MLS system is 100 per cent Internet geared, compared to Trebnet’s modified DOS system, which should mean it will be less costly to operate.
REM: When will you be making the complete switchover from Trebnet to Torontomls.net?
RICHARDSON: At the moment we’re in our field trials. December 24th we made the decision to open up Phase I of the trial MLS system to our members. We advised members to go in and use the system, do their searches and so on. But we also advised them that we would operate Trebnet in parallel for a certain amount of time, and that, at least while we are on field trials, members should not use the new MLS system for their day-to-day business. We knew with the size of the project and the speed with which we were moving to implement it, there were bound to be glitches that needed to be ironed out during our trial period. We’re halfway through that trial period right now. We’ve been ironing out the bugs and we’re very close to having a system that, as a base system, will run perfectly.
Phase II involves broker load. We’re still on the old broker load system. That phase will come along in the next two months. We would hope the board is in the position of, after having tested both Phase I and Phase II, being prepared to cut off Trebnet by about May. That will give us some time for Toronto MLS to operate independently and smoothly for a couple of months before we go into that new fiscal year.
REM: What are you projecting for the membership numbers that your new system will be ultimately be serving?
RICHARDSON: The new vision, in terms of relationships with the surrounding boards, is going to change the membership numbers. We don’t expect there will be a radical change or an immediate one. We do expect that there will be some gravitation over about a two- to three- year time frame.
Right now we have 17,300 members. We have maintained membership quite nicely from last year when at this time we had about 17,400 members, even though we’ve consolidated and changed some of the financial structures. Out of those numbers, however, about 1,500 to 1,800 are dual members.
We can’t see any reasons why anybody should have to be a member of two real estate boards. If you’re part of organized real estate, you should be part of all of organized real estate and have access to the MLS services you need. That’s what mls.ca and IXN services are all about. So I expect that, over a two to three year time frame, membership in TREB will reduce down to about 15,000 or 14,500.
REM: TREB has also changed its voting structure significantly by giving everyone a vote. What impact do you think that will have on the board?
RICHARDSON: Our election in June will be the first time everybody has a vote. It doesn’t matter how long you’ve been a member of the board, it doesn’t matter whether you are a broker or a salesperson, everybody gets to vote. I’m convinced this new voting structure makes more people interested in what the board is doing. If you look at the general meetings that we’ve had over this past year, the history was that if you held a general meeting at TREB and got a couple of hundred people out to it, you were lucky. And usually, out of the couple of hundred, there was a group of dissenters causing disruption. We haven’t had that experience in the past year. We’ve had general meetings with 700 to 800 people out. We’ve tried to put on a bit of a show, with good guest speakers, and a trade show in conjunction with some of those meetings, giving people the opportunity to take continuing education courses for credits at the same time. Getting that kind of interest back in the board is a matter of giving members the vote, giving them the information to let them know what’s happening, and giving them the opportunity to gain something out of one of those days and bingo — you’ve got the participation back that you want.
REM: Were you surprised that some members pushed back against lowering members’s dues at last year’s AGM?
RICHARDSON: Yes, I was very surprised by that, quite frankly. It wasn’t big push back, it wasn’t a hard push back. But one of the objectives coming in here was to try to streamline, to try to operate the organization in a more business‑like fashion. We were also trying to improve services and contacts with members. So yes, I was pushing very hard from one side to show we could lower dues. That wasn’t just a one‑year plan — we want to do the same thing this coming year and for several years in the future, as we get more and more efficient and this new MLS system is a big part of that.
I think maybe there was a little worry about past history, that organized real estate — whether it be boards or associations, regional or national — had a tendency to constantly raise dues. I’m all for fiscal responsibility, but I believe it was a responsible move last year to get those dues down and it will be fiscally responsible to do it again this year.
REM: So you will be proposing lower membership dues again this year?
RICHARDSON: Yes. I can’t give you an exact figure at this time, but we want to continue to drive down those dues.
REM: And were some lessons learned because of some of last year’s AGM?
RICHARDSON: We made some changes right afterward in reaction. Now it doesn’t matter whether we are raising dues or lowering dues: each year, whatever is going to happen with dues must go to the membership for their decision and ratification. So yes, a lesson was learned there.
We also put in a whole series of financial controls at the same time: if we’re going to run a deficit budget, it must be approved by the membership; if we’re going to make major expenditures beyond half a million dollars and the finance committee and the board don’t agree, that has to go to the membership. We’re trying to make sure that not only is there fiscal responsibility but there is absolute accountability. This is a members first organization.
We have also, over the past year, reorganized. We had a lot of personnel changes through downsizing, which is never a pleasant process to go through. But if there’s anything that makes me feel good about what we’ve done this past year, it’s been the development of the teamwork approach throughout our organization, both with staff and with the board of directors.
REM: One of your goals for TREB was to take down some of the barriers between this board and the rest of the country. What have you done to more closely link TREB to provincial and national initiatives?
RICHARDSON: The teamwork approach we’ve developed internally at TREB, we are also using in our relationships with other boards, OREA and CREA.
Our decision to upload and be part of MLS.ca nationally and the decision of the board of directors to upload every scrap of listing information onto the IXN to be available to everybody for exchange purposes — that was a big step for Toronto, in terms of co-operating with everybody, rather than using the MLS system for profit purposes.
We have just gone through the process of adopting nearly all of the OREA standard forms so that, other than for the operation of MLS, our members will be using the same forms as everyone else across the province. That was important to us as we’re about to embark on RealtorLink and 36 of the standard forms that OREA publishes are already open to that system on a downloadable basis, and where you can actually fill out your forms on the system. Why duplicate services, when something like standard forms, which are provincial anyway, already exist and can be used across the province?
We also made the decision earlier this year to change over from effective cause to procurement as the guiding principle for arbitrations — that brings us into line with the rest of the province, where we weren’t before.
The big step that is only 50 per cent of the way there right now and is way overdue is: we have to absolutely define roles at the different levels of organized real estate and get rid of the duplication. We will all be far stronger and far better for it. Sometimes it is just a matter of putting the right people in touch with their counterparts. We have a push on here so that our people who are involved in any kind of discount program, for example, always check with their counterparts at OREA and CREA to make sure there isn’t already a program in existence before we start adopting one.
REM: You once said TREB was a bit like the Titanic. If that analogy still holds, are you still facing an iceberg?
RICHARDSON: The iceberg is gone, in most respects, the ship seems to no longer be leaking and it’s sailing in a straight line, which is probably the most important thing. We were zig‑zagging all over the ocean before.
The strategic planning we did at the beginning of this year came up with three basic concepts for us to focus on: 1. Provide; 2. Protect; 3. Promote. Provide the tools to let members do their business as efficiently as possible; protect the business environment for them; and promote the image and good works of Realtors. We’ve found we couldn’t be all things to all people in this organization and we couldn’t own the world. So let’s focus on those three things that we should do best as a not‑for‑profit organization and make sure our members do come first.