Natalka Falcomer

Natalka Falcomer is a lawyer, real estate broker and Certified Leasing Officer who started her real estate career in private equity. She created, hosted and co-produced a popular legal call-in show on Rogers TV and founded and recently sold Groundworks, a firm specializing in commercial leasing law. She is currently the Chief Real Estate Officer of Houseful.ca, leading the development and expansion of the company’s personalized home buying and selling experience for the Canadian market. She sits as an advisor on NAR REACH Canada and is the former multi-year board member of the Ontario Trillium Foundation.

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Mario Toneguzzi

Mario Toneguzzi is a contributing writer for REM. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He worked for 35 years at the Calgary Herald, covering sports, crime, politics, health, faith, city and breaking news, and business. He now works on his own as a freelance writer for several national publications and consultant in communications and media relations/training. Mario was named in 2021 as one of the Top 10 Business Journalists in the World by PR News – the only Canadian to make the list.

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“I thought that creating a ‘Vancouver Special’-themed gingerbread house would best represent a Christmas in Vancouver,” says Jon Chung, marketing director for Sutton. “This is an iconic house design that anyone living in the Lower Mainland would be familiar with.”

Chung, along with his marketing team colleagues Sandra Malesevic and Brooke Matthews, turned the challenges of the new project into a fun, team-building event.

“None of us are bakers or have ever built a gingerbread house, so it was an interesting process,” says Matthews. “We had a full-on workshop happening in the office complete with power tools. When we delivered the gingerbread house, the first person to see it said, ‘Hey, I live in one of those!’, which is exactly what we were going for. We chose to do a Vancouver Special because we felt like it would really resonate with everyone in the area – almost every Vancouverite has either owned or rented one of these at some point.”

The Vancouver Special is a home design that has been both loathed and loved. Exploring the history of the style, Montecristo Magazine notes that the Vancouver Special was controversial in the 1980s for its bulk and uniformity. “But despite the name-calling, this two-storey stucco ‘box’ design has played a heroic role in housing our city. Easy to build and cheap to own, the utilitarian Special helped absorb the city’s population growth for decades, providing affordable housing for many.”

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By comparison, in Quebec and B.C., where Sutton has a strong presence, its market shares are 14 and 12 per cent, respectively. The “ultimate goal” for the Vancouver-based company is a 20 per cent share in its markets, Keddy says.

Given Ontario’s size, it makes sense to focus on the province, he says. “We gain one per cent in Ontario, that’s like gaining 10 per cent in some of the other markets.”

Keddy says the long-term goal is to increase Sutton’s market penetration in key markets “because there’s a direct correlation between market share and broker profitability. So rather than spread ourselves thin by trying to get into every market, we want to concentrate on helping our brokers become bigger and stronger in the markets that we’re already in and to ensure that we have sustainable business over the long term.”

In Quebec, the focus is being put on strengthening existing brokerage groups. Last year, Sutton acquired a Quebec City brokerage and merged it with two others to form Groupe Sutton Nouvelle Demeure.

In B.C., where Sutton has acquired a couple of companies in the last few years, the goal is to expand into some of the smaller markets and to take advantage of opportunities for consolidation in the province’s major markets.

Sutton, which has more than 200 offices and 8,000 sales reps, also opened its first office in New Brunswick last year.

Keddy predicts the residential real estate industry will follow the route of commercial real estate, which had a plethora of independent companies 15 years ago, many of which have since left while the big companies have gotten bigger.

Opportunities for growth at Sutton will arise across the country because of aging demographics of brokers and increased regulations and competition, he says.

“I think we’re in for a culling, if you will, of Realtors in the market. If you look at the last decade, the number of Realtors in Canada has increased by 50 per cent and that to me is not sustainable.”

The volume of transactions is slowing and there will be more competition for fewer sales, he says. “You’re going to have people that just can’t make it anymore.  And they’ll end up leaving the industry.”

As “frustrated” brokers head toward retirement, “I think they’re going to look for exit strategies and that’s going to present opportunities for companies that have the ability to grow through acquisition or consolidation.”

Keddy also believes Canada’s financial intelligence unit, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), is going to look more closely at the residential industry, which will lead to more brokers leaving the industry.

FINTRAC was previously interested in the commercial industry because of its higher transaction sizes but “with the escalation of housing prices in Canada, we’re becoming visible,” he says. “I believe they’re going to start doing a lot more audits and I think they’re going to make some examples of some people to get people onside. I believe FINTRAC is going to put a burden on our brokers.”

As a result, Sutton recently held FINTRAC training for all of its brokers.

Sutton will invest alongside them to help brokers acquire companies and grow their market share and market penetration, he says.

Keddy, who arrived at Sutton last year after 15 years with Colliers International, says one of his first goals was to put the brokerage’s house in order by making some personnel changes.

He has been putting a focus on culture, which “is really the backbone of any successful organization” and something that takes years to develop. “People want to be part of something good and when they are, they tend to stay.”

Keddy would like to create a culture of inclusion and collaboration, something he admits could take some time. “Brokers by nature, they’re competitive and sometimes compete against themselves. Eventually, I’d like to see them competing together as a single team. We all do better by helping one another.”

To break the trust barrier, Sutton is getting brokers together at events to hear what’s going on within the company and to share their perspectives. “I believe that’s what’s going to build our culture.”

Teaming will become more prevalent as real estate professionals get together and specialize, he predicts. “Within a team you’ll have speciality tasks for people – you’ll have a marketing specialist, listing specialist, administrative specialist. People are going to have to become more efficient at what they do.”

In addition, Sutton is putting a greater focus on technology to help eliminate the amount of time salespeople and brokers waste on what he calls non-value adding tasks.

Keddy also wants to create a mentorship program that will allow for a transfer of knowledge from baby boomers to millennials. “Our demographics are aging quite dramatically. A lot of these people, when they end up leaving the industry, are going to take all their knowledge with them.”

The program, which Keddy would like to implement in the next two quarters, would take brokers with huge client databases who are close to retirement and put young people who are new to the business under their wings.

The newbies would “do all the grunt work” and learn firsthand what’s taking place in the industry rather than learning from a seminar. “That is the fastest way you’ll learn – by being thrown right into the fire.”

Danny Kucharsky

Danny Kucharsky is a contributing writer for REM.

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“The federal government has also pledged to match donations to the Canadian Red Cross, so donors could effectively quadruple their donations,” says Melissa Mungall, a sales rep from Sutton Group Realty Services Ltd. in Burnaby.

“If Sutton Realtors and their clients donate $100,000, factoring in the matching contributions from Scott Shaw and the federal government, the result would be $400,000 for the Fort McMurray relief efforts.”

Instant tax receipts will be issued to those who donate through the website.

Donations will help the Canadian Red Cross provide emergency food, clothing, shelter, personal services and other necessities.  It is reported that more than 2,400 buildings have been lost in the fire.

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With the installation of a new intranet that marries all programs and software relevant to sales reps, Sutton has found a way to minimize time spent on prosaic duties. Its agents have responded positively to the November implementation, and the company says it is a useful recruiting tool.

Jon Chung, national director of marketing for Sutton Group, whose team designed the program called Sutton Homebase Dashboard, says given how many tools brokerage employees need to access, streamlining them into one coherent system made sense.

Jon Chung

“We noticed Realtors need to access more tools than ever, but from different sources and it’s frustrating to remember different sites, logins and passwords,” says Chung. “It saves them time when they can access them all from just one place.”

Sutton agents can use the Print and Design Centre to customize their own marketing material, like postcards and personalized labels, and they can easily construct presentations – which upload to cloud software – that can be accessed via mobile devices.

Another easy-to-use tool is Sutton University, a Netflix-inspired training module through which agents can progress as quickly or as incrementally as they choose, continuing from where they left off whenever they log back in.

“With a lot of real estate training sites, people give up on them because they don’t want to spend 45 minutes on the site,” says Chung, adding that typical training sites use PDFs, whereas Sutton uses pictures and videos. “As with Netflix, you can watch five minutes of a training video (on Sutton University). We benchmarked Netflix and applied it as best we could. It’s a more efficient and enjoyable way to learn about how to be a Realtor, broker or office manager.

“It has a really awesome search bar where you can search any keyword or relevant information, so you can easily find anything you’re looking for. We made our training centre brokerage-flexible, meaning if you’re a brokerage somewhere in Ontario, you can make it tailored specifically to your office. Brokers can also track progress to see which agents are using the courses and to see who’s doing what.”

Additionally, referrals aren’t being lost in a fray of disjointed websites; they enter the dashboard and, thanks to smart technology, find their way to suitable agents, no matter where they’re located. That means a referral from Toronto can easily find its way to an agent in Regina with a higher chance of conversion.

“A positive side effect is, in the past, a lot of leads weren’t being accepted or used or dealt with because you’d have to log in to different websites or emails, but now you can go through the dashboard,” says Chung.

Laura Marks

Laura Marks, managing broker for Sutton Group – Heritage Realty in Markham, Ont., says Sutton Homebase Dashboard has improved lead generation in ways that far exceed what anybody expected.

“Lead generation is unbelievable,” she says. “We’re getting hits on a regular basis, and it’s much more successful than any other lead system we’ve had in the past because they’re more qualified leads.”

Along with the intranet, Sutton.com has been updated with smart technology as well and now agents and brokers can track potential clients’ viewing habits.

“You know what the public client had been looking at, so you’ve got a little bit of information there when you contact them,” says Marks. “At least you know what they’re looking at and what their interest is. Turning that into a bona fide lead is so much greater than opening the conversation with no previous information. It gives you more depth and you sound more capable.”

Perhaps the biggest advantage of the new system is the ability to recruit. Mariko Baerg, a relatively new sales rep, credits the dashboard with her decision to join Sutton Group West Coast in Coquitlam, B.C.

“One hundred per cent it helped recruit me,” says Baerg. “At that point in time I was already doing research and knew how much time and money I’d have to invest, and when I saw it was all resolved (in the dashboard) that’s all I needed. One thing I like is it’s very organized and straight forward, and I have all the resources in one place.”

Baerg says the simplicity of the dashboard permits her to be conscientious with time by prospecting potential clients instead of passively prospecting with haphazard marketing ploys.

“I think a lot of us come from sales backgrounds, not marketing, design or communications – things that focus on look and appeal and how consumers take things in – so I believe this saves a lot of time,” she says. “As a salesperson, I want to be out there prospecting, knocking on doors and being where I need to be. I can outsource the passive prospecting to the Sutton Brand and Resource Centre.”

Though a neophyte, Baerg believes a tide of change is about to wash over the industry, as younger, tech-savvy sales agents take over from the old guard.

“I think as we see a lot more agents in their 20s, 30s, even 40s, (similar programs) will be recognized as a huge way to elevate business,” says Baerg. “It’s about wanting to learn and all the information is there.”

As a managing broker, Marks extols the dashboard’s oversight capabilities, but she is especially cognizant of the necessity to remain competitive among other sales reps and, most importantly, the public.

“You don’t want to be sending off leads to somebody who isn’t going to do anything – your reputation will go down the tube,” she says. “We can coach the agent. We can take time to explain the value of this to our salespeople so that they realize they’re getting better-qualified leads through this system. It’s good for the public, it’s good for the brokerage and it’s good for the agents.”

Neil Sharma

Neil Sharma is a contributing writer for REM.

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Keddy has been involved in the real estate industry for over 20 years. He was with Colliers International for 15 years and participated in many key milestones for Colliers, including several mergers and acquisitions both domestically and internationally, as well as the eventual sale of Colliers International to FirstService.

Scott Shaw, co-founder and former president, says in a news release: “We have been very patient to wait for the right leader to take the reins of Sutton. Drew’s proven ability to build high performance teams and grow companies both organically and through acquisitions will help accelerate our growth in the years ahead.”

Lance Tracey, co-founder, says: “While Scott and I will continue to be involved with the company at a board level, we are in alignment with Drew and know that he will be a complement to our team for the benefit of our franchisees and all of the real estate professionals that make Sutton the company it is today.”

Sutton was founded in Vancouver in 1983 by Shaw and Tracey.  The brand has more than 200 offices and 8,000 real estate agents across the country.

“I cannot be more honoured or excited to be tasked with leading a Canadian company with Sutton’s pedigree,” says Keddy. “I will have the benefit of being able to leverage Sutton’s best in class service to create sustained growth for our franchisees, agents, shareholders and investors.”

Keddy says his mandate will be to strengthen the Sutton brand by working with and investing alongside franchisee partners to strengthen existing markets and enter new ones.

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The transaction is expected to close before the end of June.

Founded in 1983, Sutton has more than 8,200 agents and 200 offices across the country. “Sutton is a franchise business with a history of innovation and a tradition of leadership in the residential real estate industry,” says Diversified Royalty Group in a news release. “Sutton began with a revolutionary business idea (charging agents a low fixed monthly fee) that remains current and relevant after over 30 years.”

The company says Sutton has a strong presence in B.C. and Quebec (together representing 45 per cent of their total agents). Ontario has about 40 per cent of Sutton’s agents while Alberta has less than five per cent.

Sean Morrison, president and CEO of Diversified Royalty Corp., says in the release: “The royalty acquisition from Sutton is… another step in our strategy of purchasing royalties from a diverse group of high quality multi-location businesses and franchisors.

“Sutton is a market leader with a strong national brand, an attractive business model and experienced leadership – all of which are key success factors for a royalty acquisition.”

Scott Shaw, president and co-founder of Sutton, says, “The transaction… provides Sutton with the ability to realize some of the value of the Sutton brand today and an even more exciting opportunity to invest in and grow Sutton.”

A management presentation for investors says that Sutton charges agents a “low fixed monthly fee (currently $110), which contractually increases by $2.50 each year on July 1.” It says virtually all of Sutton’s revenue is generated by the fixed monthly fees. “Sutton continues to offer a compelling model for top brokers and part-timers alike,” says the presentation. “Sutton is a pure franchisor (no corporate stores) with over 125 franchises across Canada.”

It says that Sutton’s agent count has remained steady during the last 10 years, “despite it not being active in developing new regions or acquiring brokerages.” It says after the transaction closes with Diversified Royalty Corp., “Sutton expects opportunities to be more active in expanding its agent count – primarily through investments and acquisition.”

Diversified Royalty Corp. describes itself as “a multi-royalty corporation, engaged in the business of acquiring top-line royalties from well-managed multi-location businesses and franchisors in North America.” The company’s objective “is to acquire predictable, growing royalty streams from a diverse group of multi-location businesses and franchisors.”

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