Fact: there are nearly 35,000 licensed REALTORS in the city of Toronto. That’s 1 REALTOR for every 74 people.
You may also remember from an earlier blog (All Realtors are Not Created Equal) that in 2011:
- 6,100 agents sold zero homes.
- 5,500 more agents did one transaction
- 4,000 agents sold two homes
If you’re a regular reader of this blog, you know that I sometimes like to get up on my soapbox about ethics and standards in the industry. Today, I take on the licensing requirements for Ontario real estate agents.
Getting Your Real Estate License in Ontario – the Good, the Bad, the Ugly
To get your real estate license in Ontario, there are a series of courses that take around 200 hours to complete and which cost about $1,600. There’s a lot of focus on the history of real estate (!!), basic construction, professional standards, the role of the REALTOR, and paperwork. Almost completely absent from the courses: negotiation strategies, marketing, the difference between right and wrong and how to run a business.
In their first two years in real estate, new REALTORS are required to take three additional courses. Included in the selection: Property Appraisals and Real Estate Law. Yep, you read that right. If your real estate agent has less than two years experience, they may only have a very basic understanding of how to determine what a property is worth and the applicable real estate laws. Scary! [UPDATE: Starting April 1, 2016, Real Property Law is now a prerequisite course, before practicing real estate. Clearly we weren’t the only ones who thought that might be a good idea.]
Beyond the first two years, REALTORS are required to get 24 credits of continuing education every two years, roughly 24 hours of instruction. Included in the continuing education course selection? Feng Shui and Facebook. (Ontario agents are also required to take a refresher course on rules, standards and ethics, which while not the most exciting way to spend 6 hours, is extremely valuable.) [UPDATE: the continuing education course content must now relate to consumer protection, no more Feng Shui or Facebook credits]
Of course, some brokerages (not many) also see it as their responsibility to train, educate and arm their agents with the latest tools and techniques. But for many agents out there, the basic licensing and continuing education courses are their full education.
And then there’s my biggest pet peeve: there isn’t a threshold of transactions that a REALTOR has to complete to keep their license. So that REALTOR with five years experience? They may have only ever sold two houses. Or none.
If I ran the world….
1. Basic licensing courses would teach agents how to negotiate, market properties, communicate and run a business.
2. Learning how to value a house and having a full understanding of real estate law would be mandatory BEFORE you could list a house or help a Buyer.
3. REALTORS who don’t sell at least three condos or houses every year would be required to take a refresher course (not just about ethics). And if they don’t meet the threshold the following year? They lose their license.
4. New REALTORS would be required to have a mentor or work as part of a team for the first year of their careers. On-the-job learning is all well and good, but Buyers and Sellers shouldn’t unknowingly be part of that learning process when it’s their money on the line. Apprenticeships are required to practice most trades…why not the trade of real estate?
Full disclosure: in my past life, I was a Director of Human Resources, so performance standards and training may be more important to me than most. But as a Buyer or Seller, wouldn’t you rather know that your biggest financial decision was being facilitated by someone who knew what they were doing?
If you’re a Buyer or a Seller:
Ask questions. Do your homework. Look for an experienced REALTOR or one who is working with a mentor or team. Look for someone who is making the effort to invest in themselves beyond the mandatory courses, who’s taken the time to learn the latest marketing techniques to sell your house and knows how to use technology to make finding you a house easier. And above all else, look for someone who knows how to negotiate.
The reality is that there are lots of great REALTORS in Toronto who take education and running their business seriously. I have some phenomenal peers in this industry. It’s just all the others that scare me.
Want to share your opinion? I thought you might. Please comment below….