The Ultimate Canadian Real Estate Licensing Guide 2016

Congratulations on your choice to begin a career in real estate! You are entering a field that is in high demand and high earning potential, chances of getting a real estate sales job is more than excellent. Getting an real estate license will be the first step of your great journey ! 

Real estate sales is an extremely competitive field. Many college graduates often make the mistake of entering the field, only to find that they lack the ability or skill needed to survive. For those that are unsure about entering this field, it is recommended that you re-evaluate and assess your skill sets to determine the suitability of career as a real estate salesperson.

In order to pass the real estate license exam and get the license, you will need to spend your time and effort to complete the relevant courses, keeping in mind that you will also need to budget for the course and licensing fees which can range anywhere from $1000-$3000 in total. Moreover, each province has different real estate license requirement and standardized test. Some province may require additional testing, on subject such as geometry, Language Proficiency Exam (LPI) and etc. Click here for real estate license exam general study tips

If you believe this is a career that you are truly passionate about, then you have come to the right place. Our goal for this guide is to help you understand the ins and outs of getting your real estate license in Canada, so let's get started!

What is a Real Estate License

A real estate license is an authorization that is issued by the government, giving an agent or a broker the legal capacity to represent a home buyer or seller in the process of selling and buying real estate. Real estate brokers and real estate agents are required by the law to be licensed when carrying out real estate transactions. In Canada, each province has its own industry regulator and they are unique in the fact that real estate licensing requirements may vary depending on where you would like to register as a real estate salesperson. However, the procedures in each province are quite similar in a sense that you will first need to take some courses, complete certain exams, and submit an application to the real estate industry council for registration.

Real Estate Career Opportunities

The real estate profession provides a wide range of career opportunities for those who have acquired real estate licenses. Let’s have a quick exploration on the type of options available.

Residential Realtors

Helping individuals sell and buy homes is one of the most fundamental and basic services offered by a real estate agent. Real estate agents are professionals in the process of selling and buying property, relocation services, and financing options. The expertise of the Realtor helps in facilitating the transaction and thus saving the customer’s time and money while at the same time evading problems.

Urban Planning

Some of the urban planners have a real estate license. They work in conjunction with the local authorities and other civic groups to draw up the plan for the growth of their town or city. Not many career recommendations exist for urban planning, but the broad general experience is vital.

Commercial Real Estate

Commercial brokers concentrate on income-generating properties such as office buildings, industrial parks, shopping centres, warehouses, retail stores, and apartments. Commercial agents require in-depth knowledge of the current purchasing arrangements and tax regulations, local economic trends, and the property market. Commercial brokers can also help in arranging financing for the purchaser. Click here for more details on Commercial Real Estate Career.

Real Estate Appraisers

Real estate appraisers determine the true value of properties. Appraisers must know common principles of appraisal and associated information. They need to have good judgment, technical education, practical experience, and basic knowledge of economics, accounting, and mathematics.

Property Management

Property managers preserve properties so as to produce the maximum possible financial return over the long term. They are responsible for safeguarding the owner’s investment. Managed commercial properties are likely to be shopping centres and office buildings. Residential properties might include condominiums, developments, and apartment buildings.

Property managers preserve properties so as to produce the maximum possible financial return over the long term. They are responsible for safeguarding the owner’s investment. Managed commercial properties are likely to be shopping centres and office buildings. Residential properties might include condominiums, developments, and apartment buildings.

Financing

If you are attracted by the financial aspect of real estate; investment funds, developers, and licensed mortgage lenders, all provide a variety of career opportunities for holders of real estate licenses. You will need to develop proficiency in business practices, accounting, financial regulations, and tax law. Click here for detail on how to get mortgage broker license.

In residential real estate, the expert must know mortgage or financing options; in commercial conditions as a professional, you will be asked about productive uses of different types of properties and income opportunities. Explore more real estate career options here, such as Real Estate Broker).

Role of a Licensed Real Estate Salesperson

Aside from the daily activities of assisting clients, such as creating real estate listings and helping with their buy and sell transactions, there are other responsibilities that are expected of a real estate agent to fulfill. Due to the fact that Real estate sales is a regulated profession, the salesperson needs to put a large effort in maintaining a good reputation so that the clients can place their trust on the agent. All agents should also act in the client’s best interest, placing their interest above his/her own. Finally, it is crucial for the salesperson to show honesty and integrity. These are just a few of the duties that are owed by the salesperson to their clients – more of this should be covered on your real estate licensing courses. Click here to check out the typical job duties of a realtor.

Essential Skills Required to be Successful Real Estate Agent

Previous experience with sales is obviously an advantageous skill to have when it comes to doing this business. As a real estate salesperson, interacting and communicating with people will become a daily routine so people skill will become a necessity, especially when it comes to providing a service. Good service will often translate into word of mouth referrals by your clients and will greatly benefit your career as a real estate salesperson as these often result in new future clients. Other important skills to have are problem solving, negotiation, organization and planning, research and math skills among others. Check out the top 8 qualities of a highly successful agent here.

Real Estate Agent Full Time Agent vs. Part Time Agent

Being a real estate salesperson is very much like running your own business. It is not your typical 9-5 job and there is no limit as to how much you can make. The harder and smarter you work, the bigger your income potential. You get to meet and interact with many different new people and no one day will be the same, especially when it comes to real estate transactions.

Aside from the potential income factor, one of the major reasons that attract people to this industry is the ability to set your own work schedule and vacations. However, running your own business might not sound as exciting for some people. If you are someone that expects a stable monthly income and absolutely cannot survive without getting paid on time, then you might need to reconsider your options. With real estate, even when you have closed a deal, sometimes you are not immediately paid and you will need to find other ways to make ends meet. These are just some of the factors you may need to consider as high reward often comes with large drawbacks.

Full-Time Real Estate Agents

In the real estate market, agents can either do it full time or just part time. We will look at a few reasons why many people decide to do it full-time rather than part-time. The real estate market is ideal for someone who is ready to put all his time into it. As a full-time agent, you will work with several buyers and sellers in the course of the year.

Frequently, you will run into alterations in appraisal issues, mortgage requirements, loan programs, and so forth. Many times it is only when you have an issue that needs to be fixed that you become aware of not only of the changes but also the consequences of those alterations! What happens if you are a part-time agent who works from Monday to Friday on a 9 am to 5 pm job and the crisis erupts during the working hours? Will you be able to handle the situation perfectly? Will your client be satisfied with how you handle the matter? Will you be able to respond to texts or emails and make the necessary phone calls to resolve the issue? Probably not.

As an agent, you should always be there for your client. You should be there during the whole process, straight from the property search to contract closing. Numerous part-time agents join the real estate industry and after a few years, they leave. However, the full-time agents remain constant as this is their primary source of livelihood.

Thirdly, as a full-time real estate agent, you will have a track record which your potential clients can check on. On the other hand, if you are a part-time agent, you would only conduct a few transactions in a year and thus your track record may not be as notable as it could be.

Part-Time Real Estate Agents

Part-time agents are just like their counterparts (the full-time real estate agents). They take the same courses, pay for the equivalent regulatory fees, and have the same permits yet they are usually looked upon with scorn by full-time real estate agents. If you are going to be a part-time real estate agent, you will need to keep in mind that the market can be erratic; therefore, there are no guaranteed paychecks every month. As a part-time agent, it will be difficult to hit the 100 homes mark every year.

As you get started, you may go for three to six months without a paycheck, that is why it is recommended that you hold on to your salaried job before you have a wider customer base. When you are not busy during the weekends, you can spend your time interacting in the social media, calling family and old friends and also blogging. These are all examples of what is called a real estate agent utilizing the 'down-times’ to aid in the growth of his/her business. Unlike full-time workers of large corporations who get compensation in terms of health care services, real estate agents have to pay for their own healthcare services. This can at times be very expensive, so you must also consider this.

Things to Consider

You must carefully consider between becoming a part-time and a full-time agent before you take a real estate license. The majority of real estate agents get into the industry because they like the idea of having a 'flexible’ schedule. What many do not understand is that a job that is flexible for you means that you must also be flexible while serving your clients. This can lead to having longer days and nights, and even the weekends are not spared either.

For a part-time agent who might also have a full-time job means that he will have to work for between 80 and 100 hours a week. Before you take a real estate license, it is also imperative to take into consideration your current familial status. An individual’s familial status will mostly affect his or her availability.

A 22 year old single lady is going to have more time to show prospective buyers properties late in the evening than a 34-year old married mother of 3. The 'flexible’ schedule can be beneficial. Nonetheless, there are odd times when 'duty calls’. Deliberation of these odd times, is imperative, as these times can usually be overwhelming and lead to a new real estate agent failing in the industry.

From Part-Time to Full-Time

The transition from a part-time position to a full-time position is a risky venture but can prove to be very rewarding for those who do it right. Before you decide to do it full-time, take the time to grow your customer base first and learn the tricks and techniques of the business. You must also be very highly organized and self-motivated to make it as a full-time real estate agent.

For many successful agents, being organized is a 'must have’ trait for a number of reasons. Real estate agents are independent contractors. This means keeping track of pending transactions, keeping track of prospective sellers and buyers, and organizing daily schedules are all your responsibilities. Few programs are available to those who just started their careers in the real estate market, to help them keep track of their client-base, expenses, and closings.

It is very common that agents who are new or even those experienced 'drop the ball’ on transactions if they are not well-organized. Real estate agents do not employ book-keepers. It is imperative to be organized and maintain records and receipts of money being spent on education, customer entertaining, advertising, marketing, and many other categories. It is likely that a real agent can get audited, and having correct and organized records are vital in case this happen.

Real Estate Agent Myths Explained

You may have heard that those in the real estate industry are guaranteed with easy money with very little skills or training. Thousands of individuals enter into the real estate field with these assumptions, and after a short period of time, they leave dissatisfied. In reality, real estate agents can earn an extensive range of income, but that only come with a remarkable amount of interpersonal skills, organization, versatility, technological, and legal knowledge. Let’s look at the five of the most common real estate myths:

Real Estate Agents Make Loads of Cash

Real estate sector is one of the few fields today, where individuals doing the same job can have a vast range of incomes. If you are very good at your job and live in a location with high property values such as Vancouver, Toronto or even parts of Calgary, you can make a good amount of money each year. However, if you stay in a less affluent neighborhood, then your will just get an average salary yearly. Real estate agents earn a decent median salary and have a high-income potential, but it would be a grave mistake for individuals to enter this industry because they want to make millions overnight.

Real Estate Does Not Require Any Skills

This stereotype does exist because the training that is required before one gets a license is shorter when compared to other professions in the same income range. Nonetheless, selling and buying houses require more than just locating nice houses and signing contracts. Real estate agents must work with clients to find compatible properties, find serious buyers, act as mediators in price consultations, plan for title searches to authenticate ownership, make sure the terms of contract are being adhered to, monitor pest and radon inspections, be on top of financing options, ensure that environmental regulations are adhered to, and lastly guide sellers and buyers emotionally through the process, majority of whom might be going through re-locations or divorces. The above long list of duties shows that an agent has to be well equipped with a range of skills. In addition, some successful real estate agent can spot a valuable property before its price takes off, while other gained the ability to increase the property value without a big budget

Agents Are Just Concerned with Making Quick Commissions

An established real estate agent rarely advertises his services as he receives numerous return clients and new customers through referrals. Every starting real estate agent dream about getting to this stage. Therefore, it is in a real estate agent’s best interest to ensure that their clients are happy and well-taken care of, so that they will come back.

Naturally, real estate agents are eager to close a deal, as their income depends entirely on it. However, most real estate agents really care about helping individuals get their right home. They understand that it is usually the biggest financial decision that individuals will make, and will not pressure customers to make decisions which they are not ready to.

You Have to Bend Ethics to Succeed

The majority of sales professions have a negative reputation of taking advantage of customers. This is reflected in a Hollywood movie, 99 Homes, which describes foreclosure investing in its raw form. Real estate agents are of no exception. For instance, a dirty trick that can be used to show the worst houses within the customer’s price range and attractive homes for just a little bit more cash. However, real estate agents expect to see all their customers again or, at least, get to work with the friends of their clients. Manipulating customers and being dishonest are not needed in making a decent income, and is a strategy that will surely backfire.

Agents Have Control Over Their Own Schedule

The above statement is partially true. Real estate agents do not need to work behind a desk for 8 hours nor do they have to punch a clock every day, and there is no boss to seek approval from when they have a doctor’s appointment or when they want to take a vacation. They can easily get a friend to cover for them and take off. Nevertheless, real estate agents must be willing to sacrifice some of the weekends and evenings for work, as this may be the only time of the day that their customers are available to look at the properties.

There is always a sense of urgency when deals are being closed and this needs real estate agents to be at the mercy of their mobile phones, ready to take calls or meet customers at the 'dream house’ at a moment’s notice. So while there is flexibility with work schedule, sometimes real estate agents must also learn to be flexible with their day.

How Much Does Real Estate Agent Make

Real estate commissions in the G.T.A. are usually set as a percentage of the property sale price. There is no set rate or fixed commission rate and it is not legal to fix the rate, but total commissions are usually in the range of 3.0% to 3.5%, the value can go to 5% or even higher than that. As an example, The Young and Thrifty blog had a nice decode on how much a real estate agent really get paid in the province of Vancouver.

​The real estate fees are paid by the seller of the property. Naturally in British Columbia, it is 7% of the first $100,000 and then 3% - 3.5% on balance if you are using large brokerages such as RE/MAX. This is a split between buying and selling real estate agent, and typically it is split 50/50. So that means in case you are looking to purchase a home that is worth $600, 000, the commissions would look like this:

  • 7% on the first $100,000 = $ 7,000​
  • 3.5% on the remaining balance of $500,000 = 17,500
  • The total would be = $24,500 + Tax
  • Note: You have to pay for tax, as it is considered as a service

​So the seller of the property paid $24,500 out of their home sale for the real estate commissions. The $24,500 is split between the two agents, each getting $12,250 each. However, this is not always the case and it is never 50/50 always, as there may be other real estates involved in the deal.

​The real estate agents usually have to pay approximately 30% of their commissions back to their home company or, even more, depending on the agreement that they have with their brokerage firm. Some brokerages do not expect their agents to pay a certain percentage of their earnings to them as their agents do all the work including advertising.

​However, many individuals do not know that the commission's drawn by these brokerages firms do not have to be exactly that way. The Federal Competition Bureau (F.C.B.) enforces to real estate firms that they can charge whatever they want, so real estate firms such as 1% Realty can exist, that means you will only have to pay 1% of the total listing price.

Young & Thrifty Blog
www.youngandthrifty.ca

The Cost and Expense of a Real Estate Agent

In 2007, ​David Fleming from the Toronto Realty Blog wrote an interesting post about how much it costed him to get his real estate license. Keep in mind while the real estate courses/exam fees are fixed, variable costs such as clothing and computer equipment are largely dependent on your own needs. We thought that David's case would make an interesting case study for our readers. Below is a quick summary on David's post.

Upfront Costs

David Fleming www.torontorealtyblog.com                 

As per David, the first step of becoming an agent is to consult with someone who is already in the industry before you decide to sign up for the course online. There is a curriculum which all potential investors must follow. The curriculum begins with Phase 1 which is about 'Real estate as a professional career’. The course costs $390, and runs for one month, then you will have another month to get ready for exams.

​In case you take the course online, you will need the workbook, which costs an extra $50. If you happen to fail the exam, but intend to re-write it, you will have to pay another $50. If you fail it the second time around, you will be forced to retake the whole course, which means you have to pay tuition for the entire course once again.

​Phase 2 is about the construction of the houses right from the foundations. This includes segments on ground-fault-circuit-interrupters which all real estate agents should know about. The cost for this course is $420 and it takes two months to complete and one month to prepare for the exam. In the first five months of your study, you will have spent more than $800.

​In Phase 3, you will make a choice as whether to take commercial or residential real estate. In this phase, you will have to take half of the course in class as opposed to doing it online. The cost for this course is $620. The course will run for two months and after that, you can write your final exam.

When you get your license, there will be other costs that you will also incur. These costs will to some extent depend on the firm that you choose to work with. In David's example, his expenses are as follows:

David's fixed cost

• Re/Max Desk fee - $1,200 per month

• Re/Max Trademark - $1,500 per year

• Re/Max Marketing costs- $ 3,500 per year

• Toronto Real Estate Board License - $1,700

• CREA (Canadian real estate association) and OREA (Ontario real estate association) Fees- $3,000

David's variable cost

• Computer Software and Office Supplies- $300

• Business cards- $200

• Company Long-term disability plan- $30 per month

• Mobile Phone- $670

• Postages- $500

• Professional Photos -$200

• Signs fees- $500

• Computer- $1,800

• Website- $40 per month

• Clothes and Miscellaneous- $2,000

It should be noted that some of the expenses shown above, such as computer and clothing are only variable costs and depend largely on the company that you decide to work with. If you already have some of the listed items, then you will save a sizable amount of money. There are other expenses, such as real estate insurance. However, there are tax benefit of being an real estate agent or broker, make sure to understand and take advantage of them.


On-Going Costs

The following are some of the fees that you will incur in maintaining your Realtor’s license in British Columbia (BC) :

• GST Fees - $50.50 per year

• CREA Fees- $310 per year

• BCREA Fees- $232 per year

• REBGV Fees- $468 per year

• Licensing Fees every two years after start-up- $1,250

In Ontario, the cost for maintaining your Realtor’s license is as follows:

• RECO E&O Insurance - $400 per year

• RECO License Fee- $350 every two years

• CREA/OREA (Canadian/Ontario real estate association) Fees- $474 per year

• Local Real Estate Board Annual Fee- Depends on the area



What is Real Estate License Parking?

This refers to the term used for registering your real estate license with a brokerage firm which is not a member of the Associations or a Real Estate Board. You are still a completely licensed Registrant with RECO. However, you will not have to pay any of the associated fees or dues related to the Associations or Boards.

Reasons to Park Your License

• Your family member or relative have an illness and you need to take a break.

• You want to go on an extended maternity leave so that you can take care of your baby.

• If you are winding down your business and thinking of retirement

• If you have just received your real estate license and you are not ready to enter the market.

• If you and your spouse both have the license, one of you can park his/her license to minimize fees.

• If you are planning on taking a long vacation but still intend to resume the career later.

Advantages of License Parking.

• Your license will be active, but you will not have to pay the standard MLS and Board fees.

• The license will still remain as a source of revenue as you will earn commissions from the referrals from the leads that you send to your brokerage firm.

Disadvantages of License parking

• You will no longer call yourself a Realtor.

• You no longer have Association and MLS access nor have a Personal Board during this period.

Real Estate License Requirement Across Provinces and Territories

Realtors in Canada get licensed only at the provincial level. This means that you can only practice in the province that you have been registered and licensed in. In case you want to practice in other provinces, you must be either licensed in two or more provinces or retain a joint- or co- agent, licensed in that specific province, to assist.

However, most provinces today have accelerated the licensing of out-of-province Realtors. That is, if you are a licensed Realtor in Ontario and move to BC, you do not have to start the whole educational and licensing process afresh. All you have to do as an agent is just take a much-shortened education process and then write an equivalent knowledge licensing test, then you will become fully licensed.

Getting Started in Real Estate Agent

Becoming an agent bears some similarities with starting a small business. Though, you will work within a firm of established real estate agents or Realtors, you will still need a start-up fund to cover for several months for personal and business expenses as you build your client base.

Take each step seriously and you will grow steadily. Do not pay attention to the median or average income statistics that you see. If you want to be successful, work hard and plan your path in great detail. If you are consistent in your efforts you will have a significant client base and even your own brokerage firm.

Right now you should have a thorough understanding on what a Realtor license really is and things you should know before considering real estate agent as a career. Now you might be wondering, how to become a real estate agent in Ontario or Toronto? Or how to become a Realtor in Calgary Alberta? How do I get my British Columbia BC real estate license? No matter where you're from in Canada we've got you covered,​ simply click on a province on the map below to learn more about the specific requirements needed to become a fully licensed agent!

We hope you find this article useful. For more real estate licensing news, study tips, and real estate market analysis, updates, and career advancement guides. Please subscribe to our mailing list on the right. Thank you!




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