Canada’s white-hot housing market has revealed blemishes in the real estate industry pertaining to the professionalism of some agents.
Looking at how many real estate agents are registered with the Toronto Regional Real Estate Board (TRREB) alone, Christopher Alexander, chief strategy officer and executive vice president of RE/MAX Ontario-Atlantic, isn’t surprised that the level of professionalism consumers receive could be compromised.
“The explosion of agents in Ontario specifically, and particularly under TRREB, is having an effect on the quality of service people are getting. People get in with good intentions but their motivations don’t always align with providing the best experience for the customer, and the current state of the market has allowed a lot of agents to stay in business who arguably shouldn’t be,” Alexander told CREW.
“A lot of business models have been surviving off of rapid price appreciation and robust demand, and they’re not always providing the experience that a consumer deserves and people are finally starting to notice it.”
Multiple offers have arguably become the biggest pain point for the industry because there’s a dearth of consistency from one agent to the next. It isn’t a stretch to imagine that many disappointed buyers, having gone through the song and dance a few times only to be blindsided by something new every time, have had enough.
“Oftentimes, people have already bid on multiple homes and lost and they end up going through a different experience each time, and that sours a lot of them,” said Alexander. “It seems like each agent has their own way of doing it.”
But Mike Usiri, president of the Mississauga Real Estate Board, says that, while agents follow clients’ instructions, they’re duty bound to extract the best possible sale price from buyers.
“The owner is the principal and they call the shots. Agents only offer certain strategies to extract the highest price because they work for the seller, but sellers sometimes get greedy and the agent has no choice but to take their instruction,” said Usiri, adding that there’s been talk about switching to the auction model, but that could easily backfire.
“There’s talk about the auction—it’s been done in Europe and the U.S.—it’s very much like a car auction where there’s complete transparency and everybody knows what the offers are, but if buyers are already complaining about prices, what will happen is homes will go for even more money. If you bring an open auction, all that will do is put more undue pressure on buyers and make homeownership more unattainable for buyers.”
RE/MAX released a survey this morning detailing consumer confidence in the real estate profession, and 57% of millennials stated that they were more likely to buy or sell a home using real estate technology in lieu of an agent. Ninety-one percent of respondents want their agents to conduct business ethically, exercise patience, actively listen and be empathetic.
Alexander noted that overall consumer sentiment is positive, he believes the industry could always do better and says multiple offer situations have yielded more complaints than ever before.
“There are rules agents bound by, but some people do a closed bidding process where you get one shot and if there’s a tie, there’s a tie breaker. Agents hold off offers and take the bully offer, but then their brokerage remarks say there was no bully offer, or they take an offer well past the deadline. People don’t like to lose but knowing they have a fair shot would do wonders for our industry.”