By Marty Douglas

Cards on the table. I was born in 1945, first licensed in real estate in British Columbia in 1970, qualified in the ’70s as a branch manager, as an agent or nominee as we were then called in the ’80s and I continue to be licensed under the current nomenclature as a managing broker with 70 licensees under my supervision.

So I’ve been around. As the old joke goes, if I’d known I was going to live this long, I would have taken better care of myself.

In early 2016, at the request of the Real Estate Council of B.C., the former Superintendent of Real Estate convened the Independent Advisory Group (IAG) to address matters of concern within the real estate industry. Since June of that year – when the IAG chiselled its recommendations into stone only to have God take a brief look, grab the tablets and shoot the messengers – the real estate industry has been waiting for the high heeled pumps to drop.



The government shortly after accepted all recommendations and is now running with them under the guidance of a new Superintendent of Real Estate and the Real Estate Council (REC). While the current focus is Recommendation No. 1 – embedding a Code of Ethics in our legislation and No. 2 – eliminating dual agency, managing brokers should be eyeing those few bullet points a little way down the list. Bullets that will, if implemented, launch them into a higher pay grade, sadly without a commensurate increase. Except for an increase in risk. They include:

  • 7 – reviewing and approving Disclosures of Interest in Trade by licensees before a sale is entered into.
  • 9 – retaining all offers received on any transaction and at some future date creating a multiple offer registry accessible to buyers.
  • 10 – deciphering how the application by the REC of “more stringent suitability assessment criteria” may affect the numbers of prospective licensees.
  • 11 – reporting to the REC all misconduct and receiving misconduct reports from licensees.
  • 16 – facing increased misconduct penalties up to $250,000 per contravention and increased administrative penalties up to $50,000 per contravention.
  • 22 – working under “a maximum ratio of licensees per supervising managing broker”.
  • 24 – even more record keeping requirements.

I feel older just reading the list. Speaking of age, I’ve been discussing my eventual retirement with my boss and I think 75 is a nice number to work with, ending a career at 50 years. He – my real estate boss – has no idea where his next managing broker is coming from. Although qualified by license, his skill is sales and quite frankly, he couldn’t live his lifestyle on a managing broker’s compensation, as generous as that may be.

But I’m lucky. My management career – award winning in several categories – has mostly been fully salaried. In my opinion, competing with salespeople for listings and sales inevitably creates conflict and impedes recruiting. Many business models offer salaries to managing brokers that force them to sell. Small offices can’t afford a non-selling manager.

And that’s the other problem – thin margins in the brokerage model. Slim profitability, licensees who can and do leave without notice, escalating costs and the increased financial liability looming from the regulator. What’s not to like about this career path?

Who cares? Well, the real estate education industry for one. The University of B.C. and the British Columbia Real Estate Association have significant investments in pre-licensing and ongoing education for salespersons and managing brokers. While the industry entry door for sales is broadly paved and banked for high speed, the career path for their supervisors is cobwebbed over, cluttered with warning signs and hampered by doomsayers hovering over a smoking cauldron fuelled by low pay and financial liability.

Who should care? The public – in the person of the new Superintendent and his Real Estate Council.

Why? Demographics. In the overall population of B.C., the age group 51 -70 accounts for about 27 per cent of the total. (Males vs. females break down within half a percentage point.) Based on data received from the REC as recently as March 24, 2017, 75 per cent of the managing brokers of B.C. are over 50! And 75 per cent of managing brokers are male. (No wonder women live longer; they get out of the high stress jobs!)

So, we have a comparatively high, older population of managing brokers, aging in place and like the Dead Sea, with relatively little fresh water being added. Not my problem, sales associates say. Or is it?

How many inmates – sorry – salespeople are being supervised by the older cohort? This is where it gets interesting. Sixty-eight per cent of licensees are supervised by managing brokers aged 51 – 70. To put it another way, when 10 Realtors tour a listing, seven of them can probably outrun their managing broker.

And for a final stat: 10 per cent of all licensees in the province, 2,696 to be precise, have a managing broker over 70. The industry should be recognized for its contribution to employing the elderly, proving there is life after a stint as a Walmart greeter. As proof, 249 licensees are supervised by octogenarians.

So when the other shoe drops and managing brokers assess their circumstances, particularly in light of the number of years remaining where they can purchase reasonable travel insurance and enjoy a second martini, I think there may be an exit of substantial proportion.

The industry is between a rock and a hard place. The government – regardless of political stripe, there will be no relief from the left or right on this issue – is resolute and the superintendent has his marching orders. The Real Estate Council, now all “civilian” but for two members, will be determined to confirm the government’s wisdom in their selection. The press, which took a very narrow sample and painted 24,000 licensees with the same brush, will no doubt be receptive to future headline opportunities.

Managing brokers who are approaching the retirement horizon are in a good position. Assuming they have made some preparation for their golden years (and like me, they raise a glass to Ottawa and the younger generation in the last week of every month when CPP and OAS enrich their coffers) when the ultimatum for new regulation comes, they can say, “Excuse me but I don’t think so,” and hit the links – or the pickle ball court.

The regulator does have a challenge. Charged with limiting the number of licensees per managing broker and a declining and aging population of suspects, what direction is likely? There are currently around 1,339 managing brokers supervising 24,516 licensees or roughly 18 licensees per managing broker. But I manage 70 and my competitor manages a similar number. And we know there are a significant number of mega-offices in larger centres with 100 licensees or more. There are about 340 managing brokers who supervise more than one office and there are larger offices with multiple managing brokers. To be fair, there are 1,593 individuals currently licensed as associate brokers, engaged in selling one assumes, who could assume the mantle.) How is that circle to be squared? What is the magic number?

In 1992-93, during my tenure as chair of the Real Estate Council of B.C., a little fuss had been in the public eye involving a real estate licensee, the former premier, a foreign buyer and a bag of cash. The then superintendent fixed us with a piercing eye and asked, “Where was the nominee (managing broker)?”

The knee jerk was a proposal to limit the number of licensees per managing broker to 55. At a subsequent meeting of Vancouver brokerage owners where I introduced the concept, torches, pitchforks and molten tar were wheeled into the room, signalling the crowd’s mood. The idea quickly became an orphan.

That was then.

There’s a new sheriff in town. And you, my managing broker associate, are on his list.

And by the way, if you think any of this is likely to happen prior to the provincial election in May, reminding 24,000 typically Liberal government supporters of the bus they were recently thrown under, then you my friend, are amazing!

Marty Douglas, irregular REM columnist, is a past chair of the Real Estate Council of B.C. He currently sits as a director of the Vancouver Island Real Estate Board, serves as an advisor to the Real Estate Council of B.C. and is on CREA’s Realtor Code Task Force. He is an associate broker with Re/Max Mid-Island Realty on Vancouver Island, B.C.

7 COMMENTS

  1. GREAT article in REM I hope you’ll write more, as I really miss your very witty and timely articles!

    I have been pushing managing broker succession planning as an “area of concern” for years and how we attract a younger demographic into the role. With limited financial remuneration, and the IAG recommendations including increasing workload with greater risk – it will only likely prove more of a challenge.

    While the “selling” manager has it’s own unique challenges, and may not have a role in larger offices, there are some real advantages;
    1) recruitment isn’t the focus it’s on retention of well seasoned professionals that are willing
    to aspire to a very high standard
    2) selling keeps a manager relevant to their sales representatives
    3) you can lead by example
    4) a selling manager does NOT want to loose or have suspended their license, as it could
    take away their financial livelihood.
    5) the trust you earn to be able to sell and manage is 2nd to none.
    These are just a few….

    One of the biggest challenges as I see it is “respect” how do you create a culture of recognizing the value a managing broker provides when they are not compensated accordingly. So why would a licensee that makes significantly more rely on the expertise and knowledge of their manager – as who would opt for a career in the future that means a substantial pay cut, greater supervision and duties, and incredible risk.

    I am grateful for having embarked on my career path when I did, as I do like “managing” BUT with the role of the future managing broker – how do we entice the future Marty’s, Dave P., Jim Mc., Randy’s, Scott & many other (of the great mentors) into the business and soon enough that they can learn from the BEST!

  2. Oh this is such an easy question to answer Marty! I can’t believe it’s not at the forefront of this discussion.
    From my experience as a former managing broker, for two major franchises, the compensation for managing brokers is the HUGE and ONLY problem, it totally sucks. it is simply not a win-win. Maybe I took the job too seriously, mentoring, training, developing retention strategies etc. and being on call 24/7. I even furthered my own knowledge and skills such as paying for a 6-month managing broker coaching program focused on recruiting and retention.
    When you as the manager are as passionate as I am about raising the bar in our industry, helping agents negotiate and close a deal late at night that was as good as dead, typically after a full work day, and at the end of the day the agent earns the full commission and my yearly gross salary, after 27 years as a full-time professional barely reaches six figures…. oh well, no wonder the managing broker is an endangered species!!

    • Just exactly who “is” the elephant in the room?

      Your comment is indeed true, Heidi, and expresses how it is in the industry. One gives till there is nothing left to give, often even without any acknowledgement or even a thank you.

      Your post leads back to the recent REM article discussing the Calgary office situation where the broker felt he had to use commission funds to keep his office afloat, even after dispensing his own funds to keep the brokerage operational, when all else proved unsolvable. And are you permitted to know how much the owner/president is paid? Or not at all? Is the broker manager expected to know such?

      Don’t such stories on REM speak to how broken the “industry-office” whole system is? In order to pay you more (and you certainly seem deserving), exactly from where within the costing structure would that extra money come from? Were you/are you ever privy to accessing the corporate branch, over which you manage, income statement. Did you, do you, know if the brokerage was/is in fact even profitable? Depending on your answer you might want to evaluate your position.

      It’s all well and good to offer agents a 100% in order to recruit agents, but at the expense of the demise of the company? It is truly an industry now where if you throw enough, often enough, at the wall – some of it sticks and recruiting can be the easy part of the job.

      Pay the agents a 100% to recruit them and when they throw temper tantrums and threaten to leave, offer them perks such as bonus holiday cruises, paid insurance and or board fees, company car: the perks list is endless, (where does that money come from? did the coaching classes you refer to address that topic?) but no money to pay extra to the managing broker.

      It costs massive amounts to run a brokerage office, who like sales reps, have to keep the corporate office name visible, and if the agents receiving a 100% don’t pay their share of office expenses, what’s left for a broker to do? Use commission funds to keep an office operating… until until… ? Out of the 100% the agent receives, do you keep track of how much the agents rebate to their buyers and sellers? Or is that figure personally guarded? do they figure out that off the top of that 100% often 50% goes to the government. So the agent has a net of something in the 50% range from which to share with his clients, and maintain his own office expenses. No small wonder there’s little left on their personal income statement.

      And readers need to take seriously the recent REM article describing the writer’s sharing with readers of her costs and incredible time involved in setting up as an independent sales agent within her existing franchise contract.

      Truly a massive undertaking. So now on top of her being an agent helping her public buy and sell, she gets to be the leader/boss of her team and her administrator and others. So many hats to wear, and how many additional transactions need to be written day and night to cover the lost setup time? Of course it is recoverable in part as expensed. Often agents don’t address the average value of gross (or net) commission per transaction needed to cover operating costs.

      If office operating costs are a million dollars, how many transactions does that equate to? Needing to be closed? Divided by how many agents? And if the agents get a 100%, what does the formula say as to how much each rep must pay in personal office fees? Of course every franchise has that schematic already in their base structure.

      It all sounds wonderful and even practical. But Humpy Dumpty’s mended cracks were so inclusive, the fixing could never put him back to his original shell, on his wall from which he fell.

      The brokerage schematic, and all its related strategies are broken, possibly beyond repair. It’s all so sad.

      Carolyne L 🍁

  3. Great article Marty. I especially like number ten on the government hit list: “deciphering how the application by the REC of “”more stringent suitability assessment criteria”” may affect the numbers of prospective licensees”. I just posted a comment about this very issue on another page before reading your article. Timely indeed! The chicken-plucking foxes will never self-eviscerate, but the government may do it for them. The public has spoken, and the legislators are finally listening. Maybe Realtors, one and all, will become widely known as professionals after all…hopefully before the next ice-age shows up.
    Not many registrants think like you do Marty, nor do they posses the skill to write and express themselves as do you, and that is the problem. Too many illiterates and too few purveyors of wisdom do not a profession make, but as you said, an office full of inmates an asylum makes.
    Maybe you should have been a psychiatrist. You probably are…without the license.

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