There is gold in them there hills!

By Lindsay Smith/Real Estate Columnist

I began my real estate career in 1986, just after finishing post-secondary education. I was just returning to the workforce after spending a couple of years learning how to walk again after a nasty car accident. The reason I decided to follow this direction was that I felt I would meet people in many different jobs, determining what I wanted as a lifetime career. It may sound “Pollyanna” however, it was the truth. I quickly found out that real estate sales representatives have a unique role, dealing not only with homes, but also becoming involved in family relationships. Deaths, divorce, financial difficulties, financial windfalls, babies being born, kids leaving the home; there are so many reasons people need the services of a realtor.

Then there is the financial reason to become a real estate representative.

I have chatted with many people over the past few decades who have been interested in real estate sales because they see that there is an incredible amount of money to be made selling homes. When you watch realtors on TV, they all seem to be driving expensive cars and leading lifestyles of the “Rich and Famous.” What is it really like? Is what we see online or on our TV screens accurate? Let’s dig in and look at what the average sales representative makes in Durham Region, and then break it down to our local communities.

In 2020, there were 12,917 properties sold in Durham Region and the average selling price was $706,917. With a total of 56,000 members currently on the Toronto and Region Real Estate Board, the average sales representative in 2020 sold 1.7 homes. You read correctly; less than two homes sold for the year. Here is what the average sales representative made last year.

Year to Date Numbers:

Area             Number of homes sold       Average Price   Average commission/sale    2020 Commission income

Durham:             12,917                                $706,913                          $17,672                              $30,042

Oshawa:              3,651                                 $595,900                         $14,897                              $25,325

Clarington:         2,300                                $659,400                         $16,485                              $28,024

Whitby:               2,389                                 $770,800                        $19,270                              $32,759

Let’s view the commissions that a realtor makes similar to what a business reports as income. Income before business expenses, marketing, salaries and insurances. The above incomes are also before the realtor pays their brokerage to run the office they work for and CRA. Oshawa, for instance, has an average income of just over $25,000. You might look at these numbers and be a little perplexed, wondering how the realtors on TV can drive such fancy cars on such small incomes. In fairness, most don’t.

The reality is, the realtors who are full time sales representatives work tirelessly and make decent incomes. There are many who sell very few properties that bring the average down. To shed some light on the numbers, in 2012, the Real Estate Board had 22,000 members. This means that in less than a decade, there have been over 30,000 sales representatives enter the business. The challenge is, how do you determine which end of the scale a realtor occupies? If you review the top 100 realtors who sell homes in Durham Region, you will see that the average sales representative in that group is currently at 18 sales for the year. This confirms that some realtors are selling large volumes of inventory, while other are doing little.

One thing I have noticed over the past few decades is that sales representatives who enter the business of selling properties, with making money as their main objective, that these individuals are the ones who leave the business within the first couple of years. This is a career built on relationships, integrity, and honesty. When the client feels their interests are the realtor’s number one concern, they want to continue to work with the agent and refer them to their family and friends.

Real estate sales is a profession where the sales representative can earn a higher than average income, or, can barely makes ends meet. No different than any other profession. Lawyers in Canada, as an example, make an average of just over $86,000, however, we know by the cars some lawyers drive, many make way above the averages.

If you are planning a move, my advice is to interview a few different realtors, ask your family and friends for recommendations and make sure your choice is a sales rep with experience. In the end experience, a proven track record and a strategy to help you will help you achieve your real estate goals.

If you have any questions on the above information, or if you can see a real estate emergency on the horizon, I can be reached at lindsay@buyselllove.ca.