The Toronto Real Estate Board (TREB) currently has over 38,000 agents trading in real estate. While this number is even shocking to those of us in the industry, even more shocking is how little in the way of real estate trades the majority of these agents do. The diagram above is both a warning to consumers and what I personally feel is a clear indication that for so many licensed agents, trading in real estate is a hobby, or part time endeavor that has the effect of lowering the standards and professionalism of our industry.
When 30% of licensed agents aren’t involved in a real estate deal and nearly another 40% of agents are only involved with 1 to 4 trades a year, this combined segment represents 70% of the real estate industry, or approximately 27,000 agents! Personally I feel this is not only bad for the industry, but bad for the consumer!!
I've always believed that the barrier to entry to a career in real estate is to low. Just about anyone who can show a piece of I.D, scrape together a couple thousand dollars and pass some very basic courses (don’t worry, if they fail the exam they can take it over multiple times) and presto, they're unleashed upon the public with the expectation and the promise of being able to help an unsuspecting consumer navigate one of the largest financial transactions of their life.
So why does it matter that 27,000 agents only do 0 - 4 deals a year? With such limited involvement actually trading in real estate, how can these agents actually develop the skills, knowledge and experience to effectively represent and protect their clients best interests. The Ontario Real Estate Association, which is responsible for licensing agents, continues to pump them out and there are now companies that require almost no investment from an agent trading under the brokerage banner. It's feasible for someone to keep their real estate license, pursue another job and wait for someone needing the services of a realtor to fall into their lap! The problem here is that these moonlighting agents are not likely to be keeping up with the market nor developing the skill set to effectively represent their clients.
An even more cynical perspective to consider is that for these moonlighting agents who receive little to no income from being licensed, when the prospect of being paid for simply being a realtor in name comes along, whose best interest do you think they’re going to be acting in? Are they going to be willing to tell a client they should walk away from a deal because it no longer makes sense or it’s the right thing to do?
I've painted some broad strokes here but I continually come across agents whose level of incompetence is astounding when the stakes for their client and mine are so high! It's for this reason I work with the industry leader in Toronto, Re/Max Hallmark Realty. New agents aren't unleashed upon the world without extensive training and both them and experienced agents have access to a vast network of expertise and training that is unparalleled in the industry. Being a professional realtor means committing to it as a full time career, continually developing your skills, staying on top of the market as well as changes in the industry, legal issues, and ensuring you're always able to protect your client’s best interests.
The take away from this is that consumers have to do their due diligence when it comes to hiring an agent. If you're going to work with someone for the biggest transaction of your life then your level of comfort with their skills and ability should be reflected in your process to hire them. At the end of the day, a skilled agent will be able to find you the home you want, make sure you're making wise decisions, stick handle any issues that arise, and protect you when the other side is falling short!