Seeing as the Canadian Real estate market has been on a red hot tear in recent years, you would think that anyone involved in the real estate market would be making a killing. But if you think you can just jump in to the ring and start scooping up the easy money, you might want to think again.
With the rise of demand and correlating market prices for properties across Canada – especially in Toronto and Vancouver – hordes of folks have decided to pursue real estate as a career. What was, for a long time, a respected, well regulated industry is becoming somewhat watered down with opportunists who don’t always play by the rules. This is both problematic for veteran agents who’ve paid their dues, as well as for folks who are trying to buy or sell their houses.
One problem is that it is perhaps too easy to obtain a real estate license. Prospective agents need only to take a small number of requisite courses and undergo a brief training period. While regulations and curriculum for this process is currently being reviewed and re-written, for the time being there are very few barriers between your every day Jane or Joe and a license to sell real estate.
For long established realtors, this is a huge problem. With so many young, hungry agents entering their environment, their territory is becoming jeopardized, the profession is becoming diluted. One thing that often happens is that new agents pressure relatives and friends in their social circle to hire them for a listing, so that many listings that would go to seasoned realtors go to rookies who are still wet behind the ears and may end up quitting from despair after a short run (many young realtors last less than a year).
The problem isn’t necessarily competition – as in any industry, competition is completely healthy. Of course, there are honest, well intentioned young hopefuls who play by the rules and deserve a share of the market. For these young hopefuls struggling in a runaway market that has gone completely off the rails, sometimes using a commission advance service is the only way to stay afloat in the salad days of a new career, discover AccessEasyFunds to better understand how this works.
Since the year 2000, the Canadian Real Estate Association has nearly doubled in size. In Vancouver the spike has been quite drastic in the past five years – there are roughly 23 percent more agents than there used to be. Some of these newer agents looking to make a quick buck cut corners and engage in reckless practice. Agents have been known to hide sales from the brokerages they work for in order to avoid paying their brokerage its fee. The practice of double ending is another trick, where the agent represents both the buyer and the seller, and are able to pocket the entire commission. Tricks like this give a bad name to what has traditionally been a respectable industry.
As the market continues to heat up, the real estate industry will no doubt experience conflict within itself as things get more frenzied. The government is scrambling to improve regulations to bring some order to the current state of affairs, but in the end it’s up to the new generation of agents to develop their own code of ethics.