Soaring prices draw influx of real estate agents, but they face stiff competition
Dave Hamilton was looking for a get-rich-quick scheme when got his realtor's licence in 2010.
"My dad always said, 'If you're going to sell something, sell something expensive,'" said the Torontonian.
"I have a cousin who sells cars and I know what he makes per car. You can make a lot more than that per house."
But Hamilton quickly realized that selling homes was a lot more work than he had anticipated.
After closing about half a dozen deals in his first year, Hamilton took on a part-time job at a bar, where he worked for several years before returning to the real estate industry on a full-time basis last year.
Today, Hamilton is a sales representative at the Condo Store Realty Inc. and he says in just the first months of this year he has closed around 50 deals. But many realtors are not so lucky, he says.
As Toronto house prices have risen, so has the number of people looking to make easy money by selling real estate.
There are just shy of 80,000 realtors licensed to practice in the province, according to the Real Estate Council of Ontario. That's up more than 26 per cent compared to five years ago, when there were nearly 63,000 agents.
In Toronto, there are 48,000 realtors who belong to the city's real estate board, up from 34,000 in 2012, according to data from the Toronto Real Estate Board.
Part of the incentive is the low barrier to entry, says Hamilton. It takes just six months and costs around $2,500 to get your real estate licence, making it a tempting side hustle.
Realtors caution, however, that newcomers expecting to rake in big bucks without expending much effort are likely to be disappointed.
"It's a very, very tough time to get into the market for a lot of realtors,'' says Shawn Zigelstein, a sales representative with Royal LePage Your Community Realty.
"Yes, people are trying to capitalize. They say, 'Oh, I'm going to go get my real estate licence, make myself a ton of money and walk away,' but they don't realize that 90 per cent of the business is done by 10 per cent of the agents."
Eugene Mezini, a broker with Royal LePage Real Estate Professionals, said it's typically relationships that give established realtors an edge. For instance, in the pre-construction condo space where Mezini has worked for the past seven years, developers typically have a roster of agents who they enlist whenever they have properties hitting the market.
"There are a lot more agents than when I joined but it's not really a lot more competition from what I've seen," says Mezini.
"It's still the same people doing all the business and getting bigger and bigger. It's not like their market share is eroding. Their market share is actually growing."
Although a hot market can seem like a blessing for agents, who typically earn a commission of five per cent of a home's price, Hamilton says in some ways it's tougher.
Representing a buyer in today's fiercely competitive market, where bidding wars abound, requires much more work than it did previously, says Hamilton. An agent may have to prepare numerous unsuccessful offers before finally managing to help a client snag a home.
Zigelstein's advice for those considering a career in the real estate industry is to go at it full time. That's what Zigelstein says he did 13 years ago when he got his realtor's licence, quit his job in the restaurant industry and went knocking on doors.
"It is very difficult to break in if you're working a full-time job and then you say, 'I'm going to do real estate on the side,'" says Zigelstein.
"Because at that point, how professional are you going to be? How knowledgeable are you going to be? Especially with market conditions that we're seeing right now."