Consider these numbers:
- 4,600 – the number of veterinarians licensed to work in Ontario according to the College of Veterinarians of Ontario
- 14,690 – the number of family doctors working licensed in Ontario according to the Canadian Medical Association
- 40,000 – the approximate number of licensed lawyers in Ontario according to the Law Society of Upper Canada
- 124,000 – the approximate number of full time teaching staff in all of Ontario according to the Ministry of Education
Now consider this – there are over 70,000 licensed real estate brokers and salespersons working in Ontario with over 48,000 of these professionals working within the Toronto Real Estate Board alone. The Toronto Real Estate Board (TREB) covers the GTA and surrounding townships, including Ajax, Aurora, Barrie, Brampton, Burlington, Caledon, Halton Hills, Markham, Milton, Mississauga, Newmarket, Oakville, Oshawa, Pickering, Richmond Hill, Toronto, Vaughan and Whitby.
Let’s look further into these numbers:
- The population of the Greater Toronto Area as of 2016 was approximately 6.418 million so for every 134 of these people, there is one real estate professional
- In 2016, the Toronto Real Estate Board (TREB) reported 113,133 residential property sales, which equates to 2.4 homes sold per agent if all of these property sales were evenly distributed amongst the massive list of TREB members
Mark McLean from Bosley Real Estate posted an interesting chart in his real estate blog (Realty Lab) a few years ago, showing some interesting statistics:
At the time of this post, almost 19% of TREB members did not have one single transaction within the year. More than half of TREB members did less than two or less transactions in the year.
What do we conclude from all of these numbers? It is too easy to become a real estate professional in Ontario and many of those working as a real estate professional are not taking their career seriously. While many people living in the GTA struggle to find a family doctor, the real estate profession in this city is overflowing with agents just itching to sell your home or help buy you a new one.
In order to start practicing in real estate, an individual must complete what OREA terms the “Pre-Registration Segment”. This segment must be completed in 18 months and consists of five courses (or six as two are combined with one exam) adding up to 255 hours worth of studies at a cost of $2,850 in course fees. Most of these courses can either be taken in-class or online. If you go the in-class route, your attendance is not mandatory.
The courses that need to be completed during the Pre-Registration Segment include:
- Real Estate as a Professional Career – a very general and not so accurate depiction of what you can expect if you become a real estate agent
- Land, Structures and Real Estate Trading – looking at how land and property are registered an owned in Ontario, which is a good subject to touch on in a chapter but not the focus of an entire course
- The Real Estate Transaction – goes through the forms and clauses used in the real estate transaction
- Commercial Real Estate – a basic rundown of what to expect on the commercial side of real estate, which apparently makes you qualified to transact in commercial real estate if you want to give it a try
- Real Property Law – looks at legal issues concerning property ownership
After this segment, you have 12 months to obtain employment and be registered with the Real Estate Council of Ontario (RECO) as a real estate salesperson. This is your opportunity to interview with several real estate brokerages and start selling. This process is not your typical job interview. Since you are considered a real estate brokerage’s bread and butter, the ‘interview’ consists of the brokerage selling YOU on their office, brand and company vs. you selling them on how well you will represent their company.
During the next two years, you have progressed into the “Articling Segment” where you need to complete a whopping one elective course and can choose from the following topics:
- Principles of Appraisal – a fairly useful course when you are looking at comparable data to price homes or assist a buyer in making an offer on a home
- Principles of Mortgage Financing – useful as a chapter but not an entire course, unless you’re looking to moonlight as a mortgage broker
- Principles of Property Management – useful as a one page memo but definitely not an entire course
- Real Estate Investment Analysis –useful course that is very heavy on numbers, calculations and formulas. Definitely one to consider if you are looking to become a commercial real estate agent.
Finally, once you have completed the challenging “Articling Segment”, you must adhere to RECO’s continuing education requirement every two years by taking a mandatory Residential or Commercial update course as well as two electives by simply clicking through the slides on your computer until you are finished.
The Ontario Real Estate Association needs to consider the following in order to improve the education process and help to elevate the industry’s poor reputation:
- Make exams harder – these multiple-choice questions are making the process too easy. Why not consider some short answer questions or even some oral questions that truly test a prospective agent’s ability to act professionally in any situation? Yes, these questions take more time and resources to mark vs. a simple scantron sheet but surely the $2,850 that each prospective real estate agent pays to take these courses would help pay for these added costs.
- Place more emphasis on the characteristics that a successful real estate should demonstrate with his or her clients such as patience, empathy and dedication.
- Give a more accurate depiction of the hours, work, competition and stress involved as a real estate professional.
- Incorporate some basics about psychology to study the thoughts and feelings that a buyer and seller will show throughout the transaction and how a real estate agent can support these emotions.
- Add another course or two that better delves into the commercial component of real estate for those agents who wish to trade in commercial transactions.
- Job shadowing with an experienced real estate agent should be mandatory for all new agents so that they can see first hand what to expect in the real world.
- Keep topics practical – negotiating, bidding wars, price reductions, multiple representation (if it doesn’t become illegal soon), etc.
While some of these topics are covered by brokerages within their training program for new agents, this training is not consistent across all companies and puts some agents at a considerable disadvantage and at a higher risk of making mistakes.
The real estate education process needs to evolve and improve in order to support its members and give a much-needed boost to the industry’s reputation. There are many good real estate professionals working in the GTA but the hard work and dedication of these individuals is consistently overshadowed by those not-so-great agents who obviously require more training, who aren’t in the business for the right reasons and who aren’t willing to take the time to make improvements to their approach on their own.