Just how many Realtors do we have in Ottawa?

…and do we need this many?
There are just shy of 3,100 Realtors in the Ottawa Real Estate Board (OREB) at time of writing. This is one Realtor for every 322 residents in our City of a million population and one for every 129 residences in the city. (Based on 400,000 residences-an approximation)

This doesn’t count the Quebec side, as real estate is regulated provincially, so there is a completely different real estate market on the other side of the river.

If you think this sounds like a lot of Realtors, how about Toronto?  The Toronto Real Estate Board (TREB) references over 53,000 members, serving the GTA and its 6 million plus population.  This works out to 1 Realtor for every 113 residents or almost triple the concentration here in Ottawa.

What do Realtors think?
Most Realtors would agree that there are far too many agents, far too many part time or inexperienced agents and far too many poorly trained agents, doing 0-2 deals a year and just too many poorly qualified agents that reflect poorly on the industry as a whole.

 Why are there so many agents?
Relatively easy access to industry and potential for significant income: The barriers to entry in real estate have always been relatively easy, with a suite of courses to be taken and minimum hurdles to pass and obtain registration to trade in real estate. The potential for significant income is available from day 1, too and does not necessarily require years of apprenticeship to realize an uptick in income.

This is helpful for franchise broker networks, too-as they need an ever increasing supply to agents to optimize their profits.  Realtors are independent contractors typically on 100% commission and are highly mobile and quite often move from broker to broker or out of the industry.  So while no Broker of Manager would say they subscribe to the “masses of asses” philosophy, there is certainly a need for brokerages to maintain and grow their headcount to remain profitable.

  • Population growth and geographic range:
    Our population has grown and with that the number of homes, condos and commercial and industrial properties, therefore more professionals are needed to service this growth.  Ottawa is spread across 2,800 sq. km and incorporates urban, suburban, exurban and rural areas plus numerous smaller villages and communities, many with their own somewhat unique real estate needs.  This alone dictates a wide network of professionals is required.
  • Specialization:
    The increasing complexity of the real estate marketplace and our geographic sprawl, has meant increasing levels of specialization for Realtors, in order to become experts in a particular market, be it geographic or vertical or by property type.
  • Volume of business:
    Our business volume in Ottawa has grown significantly, doubling the number of residential transactions completed over the last two decades and given the labour intensive nature of the business, this necessitates additional personnel.
  • Service levels:
    Buyers and sellers require a highly responsive and available Realtor on their team, so there are limits to how many clients and customers a Realtor can successfully engage at any one time.
  • Large numbers of Realtors paying fees keep costs down for all:
    Given that Realtors are on commission, there is not a huge $ cost for a brokerage to carry a Realtor, and all have quota’s and franchise fees and other overheads to pay, so there is a bias to having more rather than fewer Realtors contributing to overheads.

Even those Realtors who say there are “way too many Realtors”  benefit from the fact that their own fees are much lower when 3100 Realtors are splitting Board fees (for example) compared to what it would cost them, if there were only 1,000.  But believe me, if these same Realtors had to pay 3x the fees for insurance, provincial and national association fees, provincial registration fees and broker splits…they would not be in favour

Demographics and diversity:
Internal migration and a wave of new immigrants to Canada, have both helped fuel Ottawa’s growth and also its Realtor population.  Home buying and selling is often quite tightly aligned with cultural, religious, nationality, language or other demographic group and our Realtor ranks have grown significantly to reflect this.

Realtor population fluctuates:
Being commission based, the Realtor population can fluctuate widely.  Though Ottawa is one of the most stable markets in Canada, we have had some historic highs and lows, brought on by adverse economic conditions.  At the end of the 1980’s and what had been a very strong period for real estate, the Ottawa Board had 2,566 members…a pretty robust number!

This changed quite dramatically through recession and government cutbacks in the 1990’s, where the Realtor population contracted to only 1,341 members by the end of 1996…a 47.7% drop. It would take until 2009 to get back to the total membership number two decades earlier!

With low mortgage rates and continued growth in Government and high tech in Ottawa, the Board has grown from 2,547 at the end of 2009 to our current level of 3,078, though the numbers look to be pretty flat going forward.

Bottom line:
While there are certainly some good arguments for fewer, better trained and more professional Realtors, we believe that the fact that there is a healthy, thriving and robust Realtor and Brokerage industry is indicative of the health of the overall market and provides more choice and competition for consumers.

Gord McCormick, Broker of Record
Dawn Davey, Broker
Oasis Realty Brokerage 613-435-4692  oasisrealty@rogers.com

What can you do when a Realtor behaves badly?

Most people have either had a personal experience or heard an outrageous story about nefarious Realtor conduct or practice.  Our Realtor only Facebook page is full of them and believe me, the Realtor community is furious with this type of behaviour, as it tends to tarnish all in the profession.  Most real estate professionals and brokerages operate fastidiously within the myriad of rules, regulations and policies that govern professional real estate. (more on this later)

But what is a consumer to do?

Consumers have many options they can pursue:

Speak with the offending Realtor directly and try to clear the air or gain some remedy from the perpetrator.
Contact that brokerage manager or Broker of Record (who is in most cases, also the owner)

  • Contact the Ottawa Real Estate Board and lodge a complaint. The Board has its own Discipline Committee and quasi-judicial processes and has recently begun to fine members for a variety of offences under Board rules and MLS® policies.
  • Contact the Real Estate Council of Ontario (RECO) the regulator and licencing authority for real estate in Ontario. RECO has sweeping powers including the ability to levy large* fines, licence suspensions and even criminal charges. *one prominent Ottawa broker was fined over $200,000 several years ago for obstructing a RECO investigation and falsifying records.
  • Contact a lawyer to see if there are grounds for a legal case.

Many, many pieces of legislation affect activities around professional real estate (which is one of the problems) and those with a beef may have a difficult time sorting out who to contact.  If it is a rental matter, then it might be to the Rental Housing Tribunal.  If a privacy matter, the federal Privacy Commission.  Aggressive and unwanted or unauthorized marketing may require a complaint to the Competition Bureau or the CASL (anti-spam) folks whichever Federal Department they may happen to be with.  Real Estate sign issues are a City of Ottawa bylaw matter and so on and so on…

Why it is difficult to curb bad Realtor behaviour:
We mentioned earlier that the core of the Realtor community is furious with the egregious behaviour attributed to some members and one must wonder: “so why isn’t something done about it…why don’t more people complain?

Though many are involved in managing and regulating the profession and many positive steps have been taken, there is still a long way to and any commission sales environment with relatively easy access, high commissions and large numbers of members, will have its share of those who deviate from the overall standards.  The rewards are just too good and the enforcement is often deemed lacking, so some Realtors must say to themselves: why shouldn’t I do what gets me more business and commission?

Barriers to enforcement and complaint resolution:

  • Consumers most often do not want to get involved with a formal or legal complaint which can take a lot of time and energy and possibly money. Most consumers do not even know all the rules, either or more would complain.
  • There are so many bodies and legislation surrounding organized real estate that it is very difficult to identify which rule, regulation or law has been broken and whose jurisdiction a complaint must be filed with.
  • Processes for various organizations are long and involved and often stop complaints before they are even heard. RECO for example, takes consumer complaints very seriously but is not able to manage Realtor complaints on what are considered minor issues, so they defer these mostly back to the originating locale. For example, as a Broker of Record, I cannot refer a discipline matter to RECO unless I have already communicated and discussed the issue with the perpetrators Manager or Broker of Record.
  • There is a bit of a “live-and-let-live” approach to most common Realtor misbehaviour, on the grounds that we have to work with these people in the future, so why spoil the realtor-realtor synergy that may be needed to do a future deal. Also, as one must identify oneself to make a complaint, many can be concerned about potentially “putting a target on their own back”  and are concerned with possible reprisals from the complaint target agent.

We will write about our many “Broker beefs” via broker rant reports, future posts.  We also welcome any notes, questions or comments on things you have seen or wondered about concerning Realtor activity and behaviour.

Regards,

Gord McCormick, Broker of Record
Dawn Davey, Broker Oasis
Realty Brokerage Ottawa, Canada
613-435-4692 oasisrealty@rogers.com