Does this sound like what goes on in the Home Inspection industry
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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. It’s one of the reasons we joined Sage Real Estate. 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….
- Basic licensing courses would teach agents how to negotiate, market properties, communicate and run a business.
- 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.
- 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.
- 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….
by Melanie Piche on December 31, 2012 in For Realtors, Realtor Rant
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42 thoughts on “Realtor Rant: Real Estate Licensing in Ontario”
Rick Sergison says:
December 31, 2012 at 8:57 am
Melanie – I couldn’t agree with you more. In fact, I’d go further. If I ran the world (as you put it) all new agents would be directly under a mentor or (as they are now, the Broker of Record – but REALLY under the Broker of Record) for their first 2 years while they complete their mandatory courses. During their 3rd year, they would be required to complete their Brokerage courses and at the end of the 3rd year, they would be required to be full Brokers – with all of the responsibilities for their actions, rather then with the corporation, as it now exists.
The concept that a Broker of Record can keep track and know what every sales representative is doing every minute of every day with every member of the public is absurd, especially when we have Brokerages that now have well over 1,000 representatives in a single Brokerage. The experienced reps should be properly and fully trained and be responsible for their actions.
As far as the continuing update training, I agree that much of it is a joke too. Part of that is the difficulty and time involved in getting good courses and material approved that qualifies for Continuing Ed Credits. The mortgage industry does a far better job at this.
Anyway – GREAT rant and have a great New Year!
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Gina Hillis says:
December 31, 2012 at 9:12 am
Your mindset is so refreshing! Very well articulated! I know many realtors who are outstanding professionals, who take their role and business seriously….however I shutter at the others who don’t! Thanks for sharing. Happy new year!
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Barry says:
December 31, 2012 at 10:10 am
Let me go one further, I DETEST OREA! They are a bunch of uptight, bureaucratic, smug, holier-than-thou autocrats. Ontario in one of the few jurisdictions in North America where a real estate association controls real estate education. When I was running my appraisal firm we used to have highly educated people coming to us. They could tell you how many bricks were in a house, the quality of the bricks, the process of making the bricks but they did not have a clue about the value of the real estate. This article is bang on. I would make it mandatory for a class in business etiquette, one on how to be groomed and dress for success but more important, how to negotiate. Look, the turnover is absurd. Most don’t make it past their first year and one of the big reasons, they lack the training to actually sell. OREA will tell us that it is the brokerages responsibility to train and that is bull****. Given the commission splits today that prevail, most brokerages cannot afford to train. Too allow the academics to control the education in Ontario is dangerous and we see the failure, the failure in those who have spent a lot of time and money to get in. It is not for everyone but given the present criteria, the weeding out process is too high. It is a doomed system, it sets itself up for failure as many come in without a lot of funds, they have sacrificed the time and money to get their licence and then they are not equipped to actually sell. As a former owner of a real estate school in Ontario, you have no idea how much I detest OREA and their education process. Education in real estate should reflect reality, be practical and give the students skills that they can use and can assist the public. OREA needs a total shake up starting with the head of their education department and RECO should not allow them to control the system. The present system sucks! Many people has licenses and are legitimate and will never sell. For example, broker/managers. Then appraisers need to be Realtors for MLS access. Commercial people can work on one major deal for a year and see it fail. Many property managers have licenses, the list goes on. You have to step away and see a picture that is not just residential centric.
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Jake says:
January 8, 2013 at 9:56 pm
The best way to eliminate 90% of useless Realtors (those who do no business) is to charge 10x more the fees required to be an agent. Quickly they would disappear. Say your fees are $3K per year. Imagine charging $30K/year? And if you did 10 deals / year it may be worth it, but if you did 1, or 2, then obviously it wouldn’t. It’s just an example and a pie-in-the-sky idea but it would certainly skim the wheat from the chaff.
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Robert says:
March 31, 2014 at 1:07 pm
Have you thought what affect that will have on your fees. The will go up. Say thanks to those people when you meet them.
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david pierre says:
January 13, 2013 at 7:38 pm
Wow cares how many houses you sell a year. Its a free country, id like your self paying 30k a year to stay in bussiness.Means than 1 year your wife sick cant not focus you lose your job and investment sorry for ortografe english is my third language
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Joyciejoys says:
January 28, 2013 at 2:58 pm
This is very interesting and very helpful especially for home buyers and sellers in the neighborhood! =)
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Stephen Silver says:
February 21, 2013 at 11:25 am
Love it! Love it! Love it! The only other thing I’d add in is to have the courses run through as University or College Course, and I DON’T mean the OREA College. People would have to meet certain basic criteria established and approved by the governing body of the Institution. It would increase the professionalism, ethics and overall perception of our members by the public.
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Robert says:
March 31, 2014 at 1:13 pm
Says the guy who did the OREA program. There is other ways to minimize the competition. Let me think now… Hard Work…. that’s it !
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Joe Q. says:
March 5, 2013 at 9:20 am
There are statistics out there on actual work activity of RE agents in Ontario. I believe that within Toronto there is a significant proportion of registered REALTORS who only do one or two deals per year.
I also think a strong argument can be made, in certain areas / segments of the market in particular, for only working with REALTORS who have worked through a market downturn. They tend to have a more realistic perspective.
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buying a house in toronto says:
April 15, 2013 at 2:31 am
Your blog about value a house and having a full understanding of real estate law. Very interesting subject, especially for home buyers .thanks for putting up.
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Richard H says:
June 19, 2013 at 11:26 am
Thanks for the interesting blog and follow up comments. I am just commencing the “education” process and already have issues with the “College”. I am very familiar with the absolute need for and value of a solid education and what it takes to have a chance to succeed in business. With my background in planning law I believe that I will bring a valuable skill set to the mix but without proper and thorough mentorship and education I am concerned about my ability to succeed. Currently starting my discussions with brokers about what I can offer them and what they will offer in return. Any ideas would be appreciated!!
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Melanie Piche says:
June 20, 2013 at 7:26 am
Congrats on taking this big step! My best advice for choosing a brokerage: don’t decide based on the commission ‘split’. Ask what training, mentoring and services they provide their agents – that’s what really makes a difference. If you want to make more money, sell more real estate – a few percentage points won’t matter if you aren’t in the right environment to succeed.
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jack says:
July 20, 2013 at 2:40 pm
I agree with your points. New real estate agents often enter the industry only to find out that the profession is not as easy as it seems to be. Great post!
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Greg Balanoff says:
November 12, 2013 at 7:03 pm
I am a new agent going through my first year and I couldn’t agree with you more the orea courses didn’t prepare me for the selling side of real estate at all! I can understand why most people drop out of the profession quickly.I was extremely unprepared to be in this business after I got my license I would love a mentor or to be part of a team but unfortunately that option isn’t available to me at the moment. I have to teach myself how to manage and run a business all while I’m trying to find clients to do business with. The last 7 months have been one of the worst times of my life Ive almost given up on several occasions and just walked away, simply because I don’t have the tools I need to succeed.
Does anyone know of a training program that’s not a bull **** how to prospect program for a thousand bucks. I want to sell I want nothing more then to succeed in this business and I am willing to do the time! the problem is most days I can’t find a client to work with!
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Melanie Piche says:
November 14, 2013 at 6:45 pm
Sorry to hear you’re having such a hard time…I suppose it won’t make you feel any better to know you aren’t alone. Have you reached out to your broker? There are some brokerages out there that teach newbies all the tricks of the trade (vs leaving you on your own). For us,a strong website and social media presence are both critical to finding buyers and sellers. We’re not cold callers or door knockers, so building relationships online was a necessity to grow our business.There are lots of kinds of prospecting/lead generation courses out there, but it really depends: what kind of agent do you want to be? What are you comfortable doing? What are your strengths? Spend some time figuring how you want to build your business, then figure out who can teach that to you. There are courses for building an online presence, generating leads from social media, or prospecting old-school (call X people/day, send x letters or postcards per week, etc.) kind of courses. What kind of agent do you want to be?
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Greg Balanoff says:
April 25, 2014 at 6:31 pm
Its amazing how much things can change in a short amount of time when you work hard and give it 110%. Since the last rant back in November I took your advice and looked to my colleagues. Things couldn’t be better now my career is taking off and I’m feeling great. I love what I do, real estate is my true passion in life, the feeling I get when a first time home buyer cries with joy after their offer is accepted or when I’m putting up the sold sign on the lawn of a retired couple thats financing their retirement with the equity in their home, makes the initial struggle to get here all worth it! OREA taught me the basics my broker is where I learned how to put it all in action. The key to this business is to find the right brokerage to call home.
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Melanie Piche says:
April 26, 2014 at 7:59 am
That’s great to hear! There’s no doubt it takes hard work and determination to make a great career in real estate. Congratulations!
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Neil Codling says:
November 22, 2013 at 5:14 pm
To be absolutely honest; I don’t think the courses are that bad.
It does lack some of the things you said, like marketing and negotiating with clients
But I also believe these are the things you need to learn through experience.
They do teach you how to appraise a house in the second book.
Anyhow, reading this article gives me chills.
I agree that new agents need a mentor or a training program through the brokerage
But understand this, everybody has to start somewhere.
We have ZERO sales doesn’t mean we’re not trying.
If i’m in your world; without selling 3 condos then I will need to spend another $500 for the “refreshment” course, on top the other fees.
Yes, you will succeed and eliminate almost all of the new agents who sells nothing.
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Robert says:
March 31, 2014 at 12:59 pm
Here is my RANT!
I am currently enrolled to obtain a Real Estate License.
If someone is willing to spend THEIR MONEY to acquire a real estate education and pay all the relevant membership fees, “JUST LIKE YOU” no one has the right to deny or hinder their right to hold a valid license. This is the freedom and privileges we enjoy as a Canadian Citizen. While I respect your opinions and have given them careful thought, your methods seems unfair, if you ran the world.
Why should new Representatives have to cover “negotiation strategies, marketing, the difference between right and wrong (THIS WAS TAUGHT BY OUR PARENTS OR SHOULD HAVE BEEN) and how to run a business” YOU DID NOT
“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 5 years experience? They may have only ever sold 2 houses. Or none.” YOU DID NOT HAVE THESE REQUIREMENTS WHEN NEW. IF YOU DID MAYBE YOU MIGHT NOT BE HERE RANTING
Also for every Registrant that is below or not 100% active translates into more Clients and Customers for you. What’s you gripe?
Try not to be so dismissive about the hurdles new Registrants go through to obtain and maintain their licenses. We do have them just as you did when you were new. The program is not flawless but I find your extreme suggestions unwarranted.
Competition drives our economy and workforce. Fair play is highly encouraged. If you cant stand the heat get out of the kitchen. I am getting into Real Estate and I like it hot.
Thank God you don’t run the world!!
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