Re: Planning an exit strategy (REM, July)
Just read the exit strategy for retiring from one’s brokerage business, but what about a semi-retirement strategy for senior Realtors or associate brokers?
At 70, my business has slowed down considerably during the past two years, but I can’t retire on my OAS and CPP from the government. I need to pick up a couple of deals each year from my former clients or website leads. Health, family and financial issues distracted me from my usual real estate work load and I had a run of deals that all went sour, so my commission income evaporated during the past 18 months.
When I checked the costs to stay in TREB/OREA/CREA plus RECO plus franchise royalty fees, plus business cards, plus basic website fee, it adds up to $4,864.55 per year just to be a real estate broker in the GTA. I could also “park” my license and it will cost me about $1,046.08 per year and at least have a chance at the odd referral fee.
With a note from my doctor I could also become a “Non-Active Sustaining Member of TREB” for about $763 per year, but I can’t do any business and only my $30,000 life insurance policy is sustained until I decide to become a full member again.
Perhaps my most attractive option is to register myself as a sole proprietorship brokerage with RECO for $350 for two years and function as an independent broker outside organized real estate. I just need to check the cost at the bank to open a “real estate trust account”.
I’m not sure what forms I can use for any listing or Agreement of Purchase and Sale, but I could probably make do in this area. Of course, I could refer more complicated or difficult clients to other sales reps. This option will cost under $1,000 a year to sustain and my client base could still enjoy my expertise and experience.
I checked with TREB to see how much it would cost to function as a new brokerage and they charge a one-time fee of $4,960 for a new brokerage plus around $850 for TREB fees and $475 for OREA/CREA fees, which are mandatory. After paying into TREB /OREA/CREA for 18 years, this appears excessive for someone trying to stave off impoverishment while my health holds out in my few remaining years.
I got my real estate license at 52 as this seemed to be my only viable “last career” option at the time. The industry has been good to me. I started my second family back then and my two kids have only one more year of university left. Unfortunately, the changes to our industry during this time are trending against the “final career” option.
I think our government and industry are making a huge mistake with their regulatory mania and excessive consumer protectionism. In the future, only well-capitalized corporations who are “lawyered-up” will be able to survive in this industry. We all know what happens to “customer service” when this happens.
Common sense should reveal the importance of providing final career opportunities for maturing Canadians (who have been dumped by their corporate exploiters after 45). But then common sense isn’t common is it?
Jim Reid B.A., M.B.A., Broker
Royal LePage – Your Community Realty
Richmond Hill, Ont.