Consumers need more than basic housing market knowledge from their professional realtor when navigating challenging Canadian real estate market, new study finds
New consumer survey by RE/MAX reveals that buying and selling in the Canadian housing market is not a simple “transaction,” but a complex negotiation
- Almost half (41 per cent) of Canadians claim they aren’t knowledgeable when it comes to buying or selling real estate
- 91 per cent of Canadians say that when looking for a REALTOR® for outside support, the top must-haves are ethics in business, patience, active listening and empathy
- Eight in 10 Canadians (81 per cent) say that they would be more likely to work with a REALTOR® if they had a certification in professionalism
Toronto, ON and Kelowna, BC, May 26, 2021 – Homebuyers and sellers navigating the Canadian real estate market are in uncharted territory. Not only are they confronting another cycle of rising prices across the country, but historically low interest rates may test their long-term thresholds of affordability. As demand continues to far outstrip supply, none of this will be easily rectified in the short or mid-term.
Adding to these complexities is the unexpected rise of Canadians upending their urban lives in favour of new beginnings in suburban and rural settings, creating a dramatic shift in lifestyle expectations. As many as 35 per cent of RE/MAX brokers across Canada recently indicated that “move-over” buyers from other cities and provinces will continue to spark market activity in 2021.
Given these mounting challenges, it’s not entirely surprising that nearly half (41 per cent) of Canadians claim to not be knowledgeable about the buying and selling process, according to a recent Leger survey commissioned by RE/MAX Canada. Yet, 50 per cent still expressed interest in buying or selling a home using a DIY platform for its perceived efficiency, ease and convenience. But nothing about the current Canadian real estate market is easy, and with affordability issues coupled with the current health and safety measures, going it alone could have unintended consequences.
Alexander adds, “It’s about educating buyers and sellers on how to vet and source a REALTOR®. Agents with the right local knowledge to help them successfully find properties that are reasonably and transparently priced, and homes that will not leave them financially stretched when interest rates inevitably creep up.”
Of the 41 per cent who aren’t knowledgeable when it comes to buying or selling real estate, nearly half (46 per cent) are millennials, the largest cohort of buyers and sellers across the country. They are also the ones most likely to test alternatives to a REALTOR®-led transaction; as many as 57 per cent state that they are more likely to buy or sell a home using real estate technology, given its increased availability.
Canadians’ thoughts on REALTOR®s
To date, most Canadians will choose to lean on a real estate professional to guide them through the buying and selling transaction; as many as 77 per cent claim to have previously used a REALTOR® to buy or sell a home. A streamlined process enabled by technology, knowledge of the market, support with legal paperwork, and access to listings are all notable reasons why consumers retain an agent, but technical acumen alone is not the marker of a REALTOR®.
According to the report, much of the satisfaction Canadians derive from the working relationship with a REALTOR® comes down to skills and qualities such as honesty/transparency (52 per cent), trust (39 per cent), and effective communicating (31 per cent). Good business ethics, patience, active listening, and empathy were all tied for the top REALTOR® must-haves by Canadians (91 per cent).
Yet, less flattering perceptions of the profession persist as a result of the industry not putting enough emphasis on the importance of using an agent who embodies the qualities of a professional realtor. As many as 51 per cent of Canadians feel that REALTOR®’s commissions are their only priority, with a third (32 per cent) believing that REALTOR®s do not accurately represent their experience or credentials, conflicting with the importance of honesty and trust.
Certain industry practices, such as blind bidding or under-market-listing, also add fuel to the fire, particularly for buyers. The lack of transparency around the transaction process has become a prominent point of conversation amongst industry professionals and consumers alike. The ongoing discussion of ethics as it relates to these practices presents an opportunity for those within real estate to realign on the best way to move forward for Canadian home buyers and sellers.
Guiding Canadians toward true industry professionals
The key to ensuring that Canadian home buyers and sellers are adequately supported through this challenging market, as well as breaking down any negative stigmas, starts by informing and educating Canadians on the attributes of a true professional realtor. With increasing technology providing more options for virtual, DIY listing and selling, it’s more important than ever that REALTOR®s promote and advocate the professionals who represent the vast majority of the industry.
“When 86 per cent of consumers who have retained a REALTOR® in the past say that they’ll retain once again, it suggests that we’re doing a lot of things right. But given the tragic and disruptive effects that the last year of living in the pandemic has shown, we cannot take anything for granted and we must advocate for the interests of our clients by helping them source the best, most ethical, most proven REALTOR®s in their communities,” says Ash. “We can start by advocating for more transactional transparency, helping consumers know the questions to ask when vetting agents and assessing their quality of professionalism, and educate them on the credentials and referrals to expect from their REALTOR®.”
What will drive Canadians to work with REALTOR®s?
In addition to the foundational legal licenses required of a REALTOR®, eight-in-ten Canadians (81 per cent) say that they would be more likely to work with a REALTOR® if they had a certification of professionalism or a standard they need to formally abide by to operate. Governing bodies such as the Canadian Real Estate Association have a professional code of conduct, known as CREA’s REALTOR® Code. Many provincial regulators have their own sets of regulations that also exist. Unfortunately, home buyers and sellers are often unaware that these standards are in place, not understanding the rules that govern industry practices, and may make assumptions that all REALTOR®s are free to professionally engage as they wish.
With nearly half of Canadians needing additional support and guidance when buying or selling real estate, certifying and making Canadians more aware of the proven markers of professionalism must be encouraged. It can serve as an optimal way to support home buyers and sellers through one of the most complex real estate landscapes experienced, while simultaneously improving public sentiment of the profession.
Additional survey highlights
- 56 per cent are confident in buying/selling residential real estate; 48 per cent are not confident – and almost half (49 per cent) of those who state they’re confident are millennial homebuyers
- Those who have worked with a REALTOR®, which accounts for 77 per cent of Canadians, are satisfied were very satisfied with their experience (51 per cent)
- The factors conducive to real estate professionalism, as determined within the RE/MAX’s home buyer and seller survey include:
- Honest/transparent (52 per cent)
- Trustworthy (39 per cent)
- Effective communication skills (31 per cent)
- Neighbourhood knowledge and expertise (27 per cent)
- Effective negotiating skills (24 per cent)
- Ethical (24 per cent)
- Dedicated (17 per cent)
- Personable (11 per cent)
- Punctual (9 per cent)
- Good use of technology and online tools (9 per cent)
- Good email/phone etiquette (8 per cent)
- Empathetic (7 per cent)
- Poised/can maintain composure (5 per cent)
About the Survey
Leger is the largest Canadian-owned full-service market research firm. An online survey of 1,500 Canadians was completed between January 28 – February 2, 2021, using Leger’s online panel. Leger’s online panel has approximately 400,000 members nationally and has a retention rate of 90 per cent. A probability sample of the same size would yield a margin of error of +/- 2.5 per cent, 19 times out of 20.