Real estate transactions: a trench war

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If the Quebec real estate market is going through a period of lull, the transaction industry is different. The number of real estate brokers is in free fall since 2011, and a trench warfare has taken place between them and DuProprio.

Read also : Residential real estate: a soft landing

After uninterrupted growth from 1997 to 2011, to a peak of 19,638 brokers, the number of real estate brokerage professionals has been declining ever since. At the beginning of 2015, there were 16,802 real estate and mortgage brokers governed by the Quebec Organization of Self-Regulated Real Estate Brokerage (OACIQ). Decrease of about 15% in four years, according to the data of the annual reports of the organization.

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A decrease that depends on three main factors, according to the chairman of the Board of the OACIQ. "This is explained by the economic situation, a market that is becoming more complex, and by all the redesign of our exams and our training," says Serge Brousseau. Training, now mandatory, and new exams lead to a lot of reorganization. By the time everything is set, it's sure that it creates an unfavorable situation. "

"The standards to become a broker have been tightened," adds Sébastien Jean, chartered appraiser and director, advice and transactions at PwC. It's harder today, and barriers to entry can discourage some people. "

Asked about the potential impact of DuProprio (a real estate marketing service) on the decline in the number of brokers, Mr. Brousseau responds unequivocally: "You can take that out of your pipe! They are far from having the market share of brokers. It's really not a threat. And many of their clients end up selling with a broker, anyway … "

For DuProprio, the drop in the number of brokers is partly due to the fact that "in 2016, Quebecers no longer need an intermediary to sell their property," says Marco Dodier, President and Chief Executive Officer founded in Quebec. As to whether his company poses a threat to the "traditional" industry, "when you look at all the resources and the energy that they deploy to try to [nous] undermine, you might think so. "

DuProprio estimates its market share in Quebec at approximately 20%, and the average selling time of a property by its customers, to 114 days in 2015. A delay similar to those posted by the Quebec Federation of Real Estate Boards during the same year: 117 days for a detached house, 135 days for a condo and 104 days for a plex.

Strained relations, even in the courts

According to a study conducted in 2012 by Ad hoc Research and cited by DuProprio, 90% of its clients were solicited by about eight brokers during their sales process.

The same study found that 74% of DuProprio's Montreal customers found that the approach of some brokers was "unacceptable, abusive, disrespectful or disparaging".

To which Mr. Brousseau, of the OACIQ, replies: "It did not come to my ears, I did not get wind of that".

"If he is not aware of this reality, he who is at the head of the Board of the OACIQ, which is supposed to protect the public, it's a shame," DuProprio responds.

Both parties tabled briefs for the provincial government last fall. The OACIQ is trying to define DuProprio as a brokerage firm, while the company concerned is defending itself.

Mr. Brousseau is of the opinion that the members of DuProprio "do the brokerage. That's why we want Quebec to define the brokerage act. The day someone gives advice and opinions of market value, it becomes brokerage [et, dans le cas de DuProprio], illegal brokerage ".

"We do not do brokerage, we do not act as an intermediary and we do not ask for commission", replies DuProprio, who does not claim the definition of "broker".

A record to follow, while both parties are in court. The OACIQ is trying to ask the Superior Court to declare that DuProprio's activities fall under the Real Estate Brokerage Act.

Read also : Residential real estate: a soft landing