The changing real estate landscape

0:00 – BCREA and the Changing Real Estate Landscape

0:00 Ryan Grant: All right, so next up we have Trevor Koot from British Columbia Real Estate Association. He'll be presenting on the topic of the changing real estate landscape.

0:10 Trevor Koot: Well, thanks Ryan, and thank you for the invitation to come here and present. You just saw my colleague Brendon Ogmundson present on kind of the economic outlook from a housing perspective, market perspective. Certainly another big area that the BC Real Estate Association focuses on is kind of the housing conversation in general, when it relates to policy and government initiatives to affect some aspects of housing changes, whether it's affordability or availability or accessibility.

0:48 But then of course the BC Real Estate Association, representing 26,000 realtors in the province and about 1,400 managing brokers, we also have a real focus on the advocacy when it comes to the regulatory environment.

1:03 – Government, Regulator, Industry and Consumer Overlap

1:03 Trevor Koot: So that's where I'm going to start. I want to reference this Venn diagram to the — well, depending on your perspective, I honestly don't know, I'm leaning to the left and it's moving me to the right. But this Venn diagram that you see on the screen, this intersection that we have related to government policy, to regulatory rules, the bottom piece there says industry requirements, that's more our role, the BC Real Estate Association, the real estate boards, kind of that environment that we've built around the real estate sector, whether it's related to Realtors or managing brokers.

1:40 And then of course the consumer expectations. And really the consumer expectations drive a lot of what the government and the industry is doing. But then you see this intersection of all of these things in kind of that centre, where what each of these groups is doing is influencing or influenced by the other.

2:05 – Unhealthy Markets and the Home Buyer Rescission Period

2:05 Trevor Koot: And so one of the big areas that I like to talk to is kind of how this all connects together. And what generally happens is, something happens out in the environment, whether it's a major spike in demand as we saw in kind of that 2021, early 2022 era, where there's a significant increase in demand and housing prices are going crazy, multiple offer scenarios. And the wording that I used during that time, and even since, is the market at that time was unhealthy.

2:38 It was unhealthy for Realtors, it was unhealthy for sellers, it was unhealthy for buyers. You kind of think it's a sellers market, but then they're under pressure with multiple offers trying to navigate things, usually they're buyers in a property that they're moving into as well. It just creates an unhealthy environment for everybody. What the government does is reacts to that. They say, okay, so if that's going to be the case, what can we do to kind of quell this?

3:06 And then they stand at a microphone and come up with some policy. In this case it was a cooling off period, what ended up being the Home Buyer Rescission Period. And then the regulator has to react to government, and then the regulator starts to kind of feel out a regulatory environment: what is it that we can do in order to manage this, what does that cooling off period do, what are the requirements for all the stakeholders in this scenario?

3:29 And then industry stands up and reacts to the regulator. Now, we, on behalf of the 26,000 Realtors in the province, and then the additional licensees and folks that are related to other aspects, strata and anything else in the residential real estate environment, is being affected by this. So then they all stand up and have words with the regulator. All of this is being driven by the consumer, whether it's under the premise of consumer protection.

4:01 Regulator, that's their primary role, make sure they protect the consumer. Government is reacting to an environment that they want to step into and protect the consumer. And industry directly interacts with the consumer and wants to advocate, wants to create a better environment for the consumer, but sometimes not in the same way or with the same perspective as regulator and government. So really at the end of the day the consumer is driving a lot of this.

4:33 You see there's not a lot of intersection between the regulator and the consumer, other than in the centrepiece. And the reality is that regulator is working to protect the consumer, but there's not a lot of interaction there. Government and our industry, there's not a lot of interaction other than the advocacy and the work that we do to lobby to the government.

4:52 – Do Housing Policies Actually Work

4:55 Trevor Koot: So, an interesting intersection of all these various groups. Certainly with the myriad of policy changes and attempts to create housing affordability and housing accessibility, and certainly availability by larger construction and development, we're seeing this environment where everybody is honestly just having a hard time keeping up. We're having a hard time keeping up with, how does one policy intersect and affect other policies that are existing. You heard Brendon say as much, that a lot of this policy, and especially when it comes to the taxation environment, is intended to have a positive effect either on affordability or on development and supply, positive supply impacts in the market.

5:56 We're just not generally seeing… supply is not moving at the pace that it needs to, prices are not coming down and will not come down. And so at the end of the day the question is, to what extent do the policies work, but also should the policies continue to be the primary driver for government as kind of the solution that they're looking for.

6:17 – Advocacy With Government and Regulators

6:22 Trevor Koot: So what I'm going to do is shift from that overall environmental perspective and give you a sense of the various things that BCREA is working on, and kind of our primary role in this environment. Now, I certainly, we do have direct impact, and especially with our role related to Realtors and Realtors trading in kind of the strata environment. There are crossovers, there are intersections between what BCREA does and the strata environment in British Columbia.

7:01 But I'm not going to be specific in those areas. What I'm talking to is more what BCREA is working on in a general perspective. So from an advocacy perspective there's kind of two primary stakeholders. There's the regulator, from a trading, a transaction perspective, as it relates not just to buyers and sellers but certainly to the Realtors involved in that transaction, and how that works, whether it's the rules that are related to that, to the enforcement of the rules.

7:37 There's a lot of changes that are happening around the enforcement area that BCREA is certainly in conversation with the regulator on. But then from an advocacy perspective there's the government, and that's related more to the housing policy, to the things that I just talked about kind of from a market influence perspective. And we build policy positions on a lot of those things, and try to give influence, or at least provide feedback and act as a response to a consultation when that opportunity arises.

8:00 – Becoming a Central Housing Information Hub

8:10 Trevor Koot: The other thing that we do is advocacy beyond those roles, and this is something that BCREA has ventured into more recently, where we want to start to act as a resource, as a central information hub when it comes to all things especially residential real estate related, no matter where they are in the province, no matter who the stakeholder is. And so we've been having a lot more conversations with other stakeholders that you might not immediately think to align with BCREA.

8:41 And this could be groups… we're seeing a tremendous amount of demand, especially in the Lower Mainland where we're constrained for land and land development and opportunity. We see a lot of opportunity to start to have conversations, not just from a housing and a housing production and supply perspective, but how does that affect, and what are those conversations with other stakeholders outside of the housing arena but still involved in the land use arena?

9:15 So that could be around ALR, the Agricultural Land Reserve, that could be around food security as it relates to ALR. Certainly it has to do with industrial land, industrial land availability, and then other commercial uses, like for business use or office use or things like that. There is a real environment where we're starting to see industrial land use, industrial stakeholders, constituents, with a concern around the availability of industrial land for development, for good jobs, for increasing capacity of existing warehousing space or production space.

10:00 And if they are lobbying, if land becomes available that works for an industrial use and they're lobbying for that side, and then we come in and lobby from a residential development side to increase housing supply, do we look anti-industry and anti-good, high producing, high paying jobs, and do they look anti-housing? And so these conversations are ones that we're starting to engage with more, so that there can be more alignment around what that messaging is, have better and more informed conversations with decision makers and leadership in the province and the country.

10:43 Because if we have a more aligned message that benefits each stakeholder to the degree that it can, while achieving still a best outcome — not easily done, and I'm not saying that this is any type of a solution — but certainly understanding we're in an environment where we need to break out of our silos. BCREA can't exclusively talk and act on behalf of the Realtors and the housing market, industry can't talk and focus exclusively on industry.

11:18 There needs to be a better understanding of how each intersect and what the overall environment looks like moving forward. So the advocacy, we're working to branch out, really focusing on government and regulator but branching out from there.

11:34 – Continuing Professional Development for Realtors

11:34 Trevor Koot: Professional development: we provide a professional development environment for 26,000 Realtors in the province. They're required to adhere to their licensing education requirements, but they're also required, in order to retain a realtor status and their access to the resources of the boards and the provincial association BCREA, they're required to take 18 hours of continuing professional development each two-year licensing cycle. So that gives us a real opportunity to look at what are the current expectations and kind of changes and updates that Realtors need to be aware of.

12:17 Certainly a lot of strata focused courses and education opportunities for Realtors in those areas, and we work with the eight member boards, the real estate boards in the province, to really provide a comprehensive and productive professional development program for all Realtors in the province.

12:36 – Managing Broker Support and Succession

12:36 Trevor Koot: Broker support is something that I've talked passionately about. Any of the audience that have heard me speak at various other conferences or sessions, online or in person, hear me talk very passionately about the future of the managing broker role. And this isn't exclusive to the environment of organized real estate as it relates to the BC Real Estate Association. A lot of industries are starting to see the impacts of kind of an aging population of leadership and business ownership within their industry, more liability and accountability being put on those positions, a lot more stringent regulatory environment around those positions.

13:21 And as a result we see this lack of succession and lack of desired movement from new entrants into industry to be in those leadership roles.

13:32 And certainly, speaking in the context of the real estate industry, this is going to come to a head in the next five to 10 years, and we're in a position where we need to make sure that we're getting in front of that succession plan, making sure that managing brokers feel supported, that there's the resources that they need, that we're speaking on their behalf when we talk to regulators, that the environment becomes a lot more tenable to be in those leadership positions.

14:03 Because otherwise we will get to the point where we don't have enough people in those leadership positions, and regulators are either going to say, you've got to change the business model, something's got to change, or the industry is going to be forced to, because in order to be compliant with the regulatory environment something has to be pushed through there. The stat that I use, it's roughly accurate, it's always kind of changing slightly, but 45 to 50 percent of the managing brokers in British Columbia — 1,400 managing brokers — are over the age of 65.

14:40 And we do know that managing brokers work later into their career, certainly a lot get leaned on to come back into the industry to help brokerages navigate some rough terrain, if they lost a managing broker or whatever the scenario might be. But that's not a fair thing, to have to lean on that, make the expectation that a generation of folks who have contributed so heavily to the industry continue to do so, and make that our kind of safety plan.

15:20 So broker support is a really big aspect of what BCREA is doing, a lot of resources there.

15:26 – Communicating With Realtors and the Public

15:26 Trevor Koot: On the communications side, we've taken a little bit of a different approach, and I kind of alluded to it earlier, where BCREA is starting to be a resource beyond just for Realtors and just a voice for Realtors and the transaction in British Columbia. But looking to really broaden that, and really looking inward at what is our identity right now, who is our audience, what messages do we have to share, and how are we going to reach each of those audiences.

15:59 And so the obvious answer is that one of our audiences is Realtors and managing brokers, folks who work within the sector and provide a service to consumers and the public as they navigate their real estate transactions and movement. But the other, less obvious answer is the public themselves. And so we've recently done a shift.

16:22 We've created a new communication strategy where we really diverge those two audiences, make sure that we have an area for, and a communication style and a communication method and channels to speak to Realtors and managing brokers, but we also have one for the public, and to keep the public up to date on all of the myriad of changes that are happening, but also the value of Realtors and the value of using a realtor as you navigate the biggest financial transaction of your life.

16:52 – Standard Forms and Contract Responsibility

16:59 Trevor Koot: And then finally, if I can lean over to the standard forms. The staff, the team at BCREA loves it when I say this, that the standard forms are the most boring thing that we do, but certainly the most important.

17:15 We co-own all of the contracts with the Bar Association in British Columbia, and there's a tremendous amount of responsibility that comes with making sure that those contracts that are being used by those 26,000 Realtors in what's now about 40 to 50,000 transactions, sometimes up to 100,000 transactions in a year, that they're accurate, that they're protecting the consumer, that Realtors are aware of what those contracts say and why they say the things they say, how the contracts can be used and filled out in a way that allows for flexibility but not breaching any of the disclosure requirements or contractual obligations of the parties to the contract.

18:03 And we saw this through the cooling off period. This was my first introduction to it in my role at the BC Real Estate Association, was the tremendous amount of effort and lift that comes with one small change. And the Home Buyer Rescission Period, cooling off period, wasn't a small change, but in the big scheme of things it wasn't too profound, it was adding the three-day cooling off period for the buyer.

18:32 But the amount of research and legal advice and double-checking, crossing t's and dotting i's in a contractually obligated environment, really was a heavy lift for the BCREA team on the standard forms side. So, making sure that with all of the regulatory changes, all of these policy changes, every time something in that world changes we have to go back and make sure that everything is still compliant when the consumer signature touches the iPad screen, or the pen touches the paper for some of our folks, or it's getting electronically signed, which is probably more the case these days.

19:23 So the standard forms environment is extremely important to us, and extremely important to consumers and Realtors, even though they might not see it on a daily basis. So I'm going to leave it there. The environment around the BC Real Estate Association, I'm very optimistic. I'm very optimistic about the economic opportunities in British Columbia. I'm really optimistic about the real estate, housing environment that's going to come. But only optimistic because I think this stuff is front of mind for so many people.

20:11 It seems untenable, the number of changes that are happening on a daily basis, but the alternative is one, either we don't change, or two, that we're in an environment which so many of us have seen in the past, where people are leaving community and schools are closing down and economic environments are stagnating. That is the inverse of what we're experiencing today.

20:40 And I think if we collectively have open conversations, we break out of the bubbles and the siloed environment that we've traditionally worked within, we move beyond protectionism and focusing on legacy, and we start thinking about innovation and future, and we do it collectively, there's some really cool opportunities for a lot of folks out there. I think the future can be bright if we look at it in the right light.

21:13 So I'm going to leave it there, happy to answer any questions. I know this is wrapping up the end of the conference, I didn't want to take a long time to kind of say my bit, but hopefully it resonated with people.

21:27 Ryan Grant: Yeah, that was perfect timing actually. So it looks like we do have one question here, if you could check in the private chat, see if it pertains to what you can.

21:32 – Q&A: Working With Regulators

21:36 Trevor Koot: You bet, I'll read it and then provide my thoughts. So: encouraging, a good presentation, and encouraging. That's nice to hear. I try to balance my criticisms and cynicism with a little bit of positivity and optimism. Regulators need to change too, and need help to do so, although may not realize it yet. Are you applying — and then in brackets, trained — plain language expertise to forms, etc?

22:10 This is a really interesting question. I'm going to speak to the first part before I answer the forms part. So, when I was brought into this role at the BC Real Estate Association… I was a regulator. I was with a real estate regulator in another part of Canada, I was part of an international real estate regulatory group, and it's an entirely different perspective. I will admit that I was in industry when I was with the regulator, so I brought both perspectives, but sitting at a regulatory table you do look at things through a different lens.

22:46 There is this perception in the industry, and I've written articles on this, where as soon as the regulator says anything, if they sneeze, then we as industry should look for torches and pitchforks. That's our role: every time the regulator does something we should be mad and upset and go after them. And the words that I use when I'm talking to rooms full of Realtors, or in conferences when those types of comments come up, is, if that's the case, if that is the desire of the industry, then they hired the wrong guy.

23:19 Because I don't see the value in that approach, when really, under the circumstances, no government in this world is looking at the current environment going, you know what we need is less regulation. Every government is looking at, how do we continue to protect the public? Our role is to intervene. They're going to intervene, we just have to accept that, whether you're capitalist or not. This is the world that we live in.

23:49 With that knowledge, knowing that governments are going to influence, knowing that the regulators are going to respond to government influence with a regulatory environment, we're best to have a seat at that table. We're best to have a relationship where the regulator can call us, get our feedback, which is exactly what happens. We're not always in favour of the policy or the rules that are coming out, but we are really proud of the fact that we work closely with regulator.

24:19 If this is going to be a rule, here's the environment that it has to work with, here's the things that are wrong with it. We don't win all of those conversations, but we do have a lot of good wins. From the point of view of plain language expertise to the forms, I would suggest that we're moving in that direction. There's a few things that still have a strong influence over this.

24:43 One is the co-ownership with the Bar Association, that's something that we have conversations about on a regular basis. We co-own a bunch of the forms, not all of the forms that Realtors touch every day, but a bunch of the forms BCREA co-owns with the Bar Association. We would like to see an opportunity where we have a little bit more autonomy over that. But also, we have a standard forms committee.

25:10 It's very robust, we have different players at that table, and really the language is formed by folks who are using those forms on a daily basis, whether they're brokers, Realtors. But also there is influence from the regulator and from legal expertise and legal advice, so there's always going to be a little bit of that legalese influence.

25:26 – AI in Contracts, Forms and Courses

25:36 Trevor Koot: Final point I'll make on this, and I know we're wrapping up, is the influence of artificial intelligence in all of this conversation. And there we are exploring internally some opportunities to start to use artificial intelligence. I talked about how much change there can be with one regulatory change, and that change is not just on our standard forms. We have 70 courses. All of those courses, if they reference one section of the regulations or the Act or whatever, and that changes a little bit, all of those references have to get changed throughout our entire course catalogue and our entire forms catalogue.

26:16 So we're looking at trying to figure out if there's AI that can kind of help us streamline and ease some of that tension when those types of things happen. I will say there is a future where AI has a very instrumental and fundamental role in the creation of unique and customized contracts pertaining to a specific deal between two specific people on a specific property. That's not tomorrow, might not be five years from now, but that future exists.

26:50 And I think it's incumbent on BCREA to start to have those conversations and figure out what those roles of technology are down the road.

27:00 Ryan Grant: That's awesome. You're at the forefront, right, and always exploring new opportunities, right?

27:06 Trevor Koot: Yeah, and it's a fun place to be. We work with some really great people, we have a great team. But just being able to look at all of this stuff through various different lenses, and having a direct influence on consumer experience but also realtor expectations and business practices and opportunities to do business. I consider us to be representing 26,000 independent business owners in British Columbia, and business isn't easy.

27:39 There's opportunity for BCREA to play a role in making sure that, it's never going to be easy, but we can certainly play a role in assisting.

27:51 Ryan Grant: That's awesome, thanks so much for the presentation there Trevor. We really appreciate you coming on, it was a big win for us to have you guys join the BC Strata Tech conference this year, and we look forward to all the changes to come.

28:06 Trevor Koot: Absolutely, yeah, it's my pleasure. Thanks for the invitation Ryan. And if anybody has any questions or wants to reach out independent of this, feel free to do so. bcrea.bc.ca, you can find my contact information hidden somewhere in that website.

28:22 Ryan Grant: Awesome, thanks so much Trevor, you have a good rest of your day.

28:28 Trevor Koot: Thanks everyone, appreciate it. Bye.