One of the things that anyone considering a career in real estate should understand is this; unlike the way it was decades ago, the fact of the matter is in most cities there are more licensed realtors operating than there is a fair share of the pie to go around. This is especially true in regions where you’d think there is ‘money to be made’ – Vancouver, Toronto, Calgary, Montreal etc. If you live in one of these areas and are thinking about becoming a realtor then you really should know that you’re going to be in direct competition with literally thousands of other individuals.
It is true that you have less competition in smaller, more rural areas but know as well that properties here are not as valuable and as such your commission rates and profits will be lower. It’s definitely a trade off. Here at Real Estate Leads, our online real estate lead generation system is designed to help working realtors generate greater numbers of buyer and seller client leads, but we feel there’s also value in helping people decide if making the move to real estate is a smart one for them.
We’re not aiming to be discouraging here; choosing a career in real estate is a viable profession with a great deal to offer a very large cross-section of Canadians. But weighing the pros and cons and then referencing them against the particulars of your situation is something you really should do.
Is Self-Employment Right for You?
All of the benefits of being self-employed also come with much more in the way or responsibility and requirements. Many people simply aren’t cut out for the potential volatility and sheer unpredictability of being alone in the career. Real Estate has no guaranteed income or benefits packages (realtors operate exclusively on a commission basis) and being out on your own can be a daunting prospect. However, flexibility and autonomy are big pluses and add to the appeal of real estate as a career. The way the career rewards people for endeavouring and being entrepreneurial is really great for those who are successful with it.
A statement from Stats Canada some years back related that ‘long-term rise in residential real estate prices, particularly in Canada’s large cities, has benefited real estate agents and brokers. Between the first month of 2014 and the same time in 2015 real estate professionals saw a 2.5% increase in weekly earnings on average across Canada. In real terms, though, this is different – real estate is often very much a ‘feast or famine’ livelihood. An average realtor can earn $50,000 through a very small volume of transactions, and this can be very attractive to outside observers. What many fail to see is the incredible time and effort required to sell even one of those properties. Understand that realtors can go months (even years) between sales, so earning potential is often tied to a very small number of transactions that realtor has facilitated.
Low Commitment & Barrier to Entry
What it takes to become a licensed realtor varies depending on the Province. Generally there is a very low barrier to entry, however, and many realtors do agree that there should be more required to enter the profession. It’s true that only a basic level of formal education is required, and aside from that a written realtor’s exam is needed to become a licensed broker. There is also a very low level of commitment required to remain a realtor, and the best indication of this is how many people get their realtor’s license as a means of working beyond their existing careers. Generally, these people won’t hustle to get clients but if the opportunity to assist in a sale arises then they are quite open to earning a realtor’s commission on the side.
Too Much Saturation
This is perhaps our biggest caution about becoming a realtor in Canada; In March of 2015, the Canadian Real Estate Association was representing more than 109,000 realtors working within Canada. The number will of course have increased greatly since then too. It is estimated there is one realtor for every 245 Canadians over the age of 19. In Toronto, Canada’s largest metropolitan area, the Toronto Real Estate Board represent 39,000 brokers, which works out to one for every 140 people living in the GTA. The numbers will be only slightly better in other major urban centers, and it speaks to what we talked about earlier – there’s so much competition in the real estate business these days.
Fewer Qualified First-Time Homebuyers
The new mortgage stress tests introduced by the Bank of Canada last year have had a direct affect on the real estate business in Canada, as fewer first-time homebuyers are out there for realtors to serve. Yes, there are qualified buyers out there that you can secure as clients, but the general consensus is that there’s fewer of them now. Add to this that the current real estate market is considered to be ‘flat’ – meaning that homes are generally not gaining or decreasing in value nationwide, and fewer homeowners will be selling.
These market conditions always change, and the current ones shouldn’t be dissuading you from a real estate career on their own. But it is important to know that these climates will have an effect on you at times throughout your career, and if they’re not favourable when you’re starting out you may find it very difficult to establish yourself on solid footing like you’d want to.
For those of you who have decided to begin a career as a real estate agent in Canada, we are happy to help you build your business. Sign up with Real Estate Leads here and receive a monthly quota of qualified, online-generated leads delivered to you exclusively, and for your privately-served region of any city or town in Canada. It’s a proven-effective and potent way to put you in touch with greater numbers of people who may become your home buying or selling clients.