Blind bidding. Houses priced well under market value. Average home prices skyrocketing. Homes selling for hundreds of thousands of dollars over asking. Welcome to the current norm in Canadian real estate.
As such, homebuyers are more often than not finding themselves in uncharted territory.
It's tactics like those listed above that are bringing a sense of uncertainty to Canada's housing market, with nearly half of Canadian homebuyers now saying they feel unknowledgeable when it comes to real estate, according to a new survey from RE/MAX.
Not only are hopeful homebuyers facing escalating housing prices -- that show little signs of cooling -- but historically low-interest rates are testing their long-term thresholds of affordability. Adding to these complexities is the unexpected rise of Canadians upending their urban lives in favour of suburban and rural settings, creating a dramatic shift in lifestyle expectations.
Given these mounting challenges, 41% of Canadians say they are unknowledgeable about the buying and selling process. However, 50% still express interest in buying or selling a home if they can use a "DIY buying and selling platform."
READ: Ontario Homebuyers Deserve Choice When it Comes to Auction Buying: OREA
Of the 41% who say they aren’t knowledgeable about buying and selling, nearly half (46%) are millennials, the largest cohort of buyers and sellers across the country.
According to the survey, millennials are also the buyers most likely to test alternatives to a realtor-led transaction. As many as 57% say that they are more likely to buy or sell a home using real estate technology, given its increased availability.
However, the survey reveals that these frustrations could be eased if a homebuyer has the opportunity to work with a knowledgeable and trusted realtor.
In light of this, 51% of Canadians feel that realtors' commissions are their only priority, with a third (32%) believing that realtors do not accurately represent their experience or credentials, conflicting with the importance of honesty and trust.
“The stakes have never been higher for buyers and sellers. It’s incumbent on the real estate industry to help consumers differentiate between full time, regionally knowledgeable, professional realtors who genuinely have the required expertise to advise clients through these challenges, versus agents who treat their license as a means to ‘make a quick buck,’” says Christopher Alexander, Chief Strategy Officer and Executive Vice-President, RE/MAX of Ontario-Atlantic Canada.
Alexander said the survey results revealed that any "negative sentiments" tied to the real estate profession drastically decline once Canadians are exposed to a professional realtor experience.
“But like many advisory and professional services, some advance their interests before those of their clients. We must do a better job of helping Canadians find the best advisor for their needs,” said Alexander.
That being said, 91% of Canadians said that when they look for a realtor for outside support, the top must-haves are ethics in business, patience, active listening, and empathy. What's more, 81% said they would be more likely to work with a realtor if they had a certification in professionalism.
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."
Certain industry practices, such as blind bidding or under-market-listing, also add fuel to the fire, particularly for buyers. RE/MAX says the lack of transparency around the transaction process has become a prominent point of conversation amongst industry professionals and consumers alike.
"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 realtors in their communities,” adds Elton Ash, Regional Executive Vice President, RE/MAX of Western Canada.
Considering that nothing about the current housing market is easy -- let alone in a 'normal' market -- beginning your real estate journey comes with its challenges, and going at it alone could add further frustrations, not to mention unexpected consequences.
