If you have not been following the TREB (Toronto Real Estate Board) v. Zillow case I will catch you up. Zillow has filed a complaint with the competition bureau that TREB should release MLS data to the public which led to a court battle between the two. Zillow won at the provincial level in Ontario and now TREB is appealing to the Supreme Court of Canada over the matter. The competition bureau can stop the appeal within thirty days of the appeal that TREB submitted.

Essentially the battle is to allow for more open data and access for the typical consumer. TREB's arguments for not allowing access are weak at best and the courts have agreed with that sentiment to date.

Why does all of this matter to Canadians? Zillow coming to Canada will no doubt cause a disruption within the real estate market as it did in the US, however that disruption might be even more profound. It could lead to many people thinking that real estate agents are not needed anymore. In researching this matter I was shocked to find that there are pockets of people who believe the following about real estate agents:

They are a monopoly

They control the market for housing transactions unfairly

They are glorified paper pushers for transaction contracts

Like any line of work, there are individuals that don't uphold high standards in themselves or others within their industry to make sure a bad reputation is achieved. Real estate agents are not immune to this, especially in the Toronto market. The Toronto market has been so hot and many people have lost and gained fortunes overnight, the bad taste that can be left in someone's mouth can lead to the perception of a bad experience.

I know many great real estate agents that take the time to properly market and handle client relations. The actions of some can easily make the entire industry be viewed in a negative light.

What is next for real estate agents?

With any disruptive change in a market, the market users need to react appropriately or be left in the dust. I believe that the next step for the different Canadian real estate councils is to take the same approach to agent certification as any other professional group (ie. Engineers, Lawyers, Doctors). In order to increase the credibility of agents, the provincial real estate councils will need to implement a more stringent training and certifying program.

Recently, I was at an event for the Edmonton real estate industry and someone who was in financing asking me the steps to becoming an agent as they wanted to become certified to avoid transaction fees. It was in that moment I realized the barriers to entry are way too low. Do I think a real estate agent needs the same length of training as an engineer, lawyer or doctor? No. I do think, however, that the model the professional organizations use should be utilized. Specifically the following:

1. Potential new agents should be required to have a certain level of knowledge to enter a certificate program.

Take an entrance exam.

Having a certain level of schooling beyond high school (perhaps a certificate directed at real estate agents offered from post-secondary institutes).

2. The tuition requirements and length of schooling should be increased to make the decision more meaningful and less casual than it is currently.

~$5,000 in costs to become an agent in Alberta is currently not meaningful enough to sway the causal agent. That cost would be recouped in their first transaction after receiving certification.

A person looking to take the courses full time (online based) could complete them in as little as two months time. That is not a long enough period to make potential agents feel invested in their learning.

3. New agents should be required to work under a more experienced agent or have a final test before being allowed to complete transactions solo.

Not unlike an engineer under a professional engineer or a new lawyer who needs to article before being called to the bar.

A final exam like the bar exam (lawyers) or ethics exam (engineers).

4. The content of agent education needs to expand to allow for more comprehensive knowledge in real estate market forces and client care.

All current agents should be required to show competencies on a regular basis in order to keep their licenses (beyond what is currently required) such as professional development hours or directed coursework.

The education should be expanded, as previously mentioned, to include for more content on economics, financing, marketing, and client care.

How do you think Zillow coming to Canada will disrupt the market? Put your thoughts below.