Gary Wong says he was surprised how easy it was to become a real estate agent in British Columbia.
When he graduated with an MBA at Simon Fraser University four years ago and wrote the exam to enter the industry, there were nearly 18,000 licensed agents in the province. Now, he is one of more than 22,000 licensed agents working in an increasingly heated housing market that is under scrutiny over unscrupulous tactics by agents facing weak penalties.
"The barriers to [getting an accounting licence] are huge: You have to study four years in school and do a practicum, so [losing your licence] it's a huge deterrent for people to break the rules," said Mr. Wong, who thought about an accounting program after his MBA before deciding to sell homes in and around Vancouver. "But in real estate, there's a superlow barrier to entry: Anyone can do a six-week program, write the exam and pass it."
Most agents act in the best interest of their clients, but it can be difficult for consumers to track the disciplinary history of agents who don't, because only the most egregious infractions remain posted indefinitely to the website of the industry's self-regulating body. B.C.'s 11 private real estate boards hand out separate penalties, and guard access to the Multiple Listing Service, but their decisions remain confidential.
Complicating matters is that a member agent can be disciplined by these boards if they warn a client about a shady colleague.
"If somebody I know is working with a Realtor who has been disciplined before and known for questionable practices, I can't warn them, unless it was in the news," Mr. Wong said. "Most Realtors want to improve the reputation of all Realtors – we're not the shady salespeople, we are professionals."
The Globe talked to several established agents and industry experts to gather some tips for choosing a good agent.
The right fit
Experts agreed it was essential for clients to interview multiple agents before considering their ideal candidate. For the most part, they agreed that means ignoring any agent who papers your doorstep with unsolicited offers in favour of taking the time to find an agent with whom you feel comfortable.
"Ask tough questions and take notes," long-time real estate lawyer William McCarthy says. "From the start, did the prospective Realtor seem organized, punctual and professional? Did they know your market and did they put your specific requirements – either the quality and value of your home if you are selling; your price range and other considerations if buying – in context?"
Another way to suss out the character of agents is to attend one of their open houses to see how they conduct themselves with the public and the quality of information they provide, he added.
Though agents operate as individual contractors, one should also consider the track record of their brokerage firm, he said.
In a profession where one's success is heavily influenced by reputation, finding out whether an agent has faced past discipline can be difficult.
Most decisions are scrubbed from the Real Estate Council of B.C.'s website after a year, but any disciplinary penalties from the past decade can be found in the CanLII online database by searching your agent's last name.
Carolyn Rogers, B.C.'s financial services watchdog now heading a review into the regulation of the real estate industry, said, if in doubt, call the council for confirmation on a real estate agent's history.
Structuring a deal
In the current seller's market, good agents will offer their clients several listing prices, including the strategy behind each approach, before letting the client decide, Mr. Wong said.
"I usually recommend pricing it at market value or a tiny little bit below market value," Mr. Wong said. He added that using a bonus to entice agents is not necessary in this market and doing so will only attract "sketchy Realtors."
To avoid having your home shadow flipped – where one property is resold before the original contract closes – write a clause into the contract that stipulates any assignments must kick back any monetary gain to you, the original seller. Mr. McCarthy said the consumer should take notes while asking the agent to clearly explain the parameters of any contract and its commission structure.
"The consumer can also review online information as presented by the local real estate board and provincial Real Estate Council so they have a better understanding of their rights and what level of service and disclosure they are to be afforded by realtors," he wrote in an e-mail. "The power to say no or not to commit to any contractual obligation that they do not feel comfortable with is their first and last resort."
Mr. McCarthy also recommended having a lawyer or notary review the contract.