Jessica Richard’s apartment in Milton, a suburb in the Greater Toronto Area, was old and dirty.
“It was the kind of place where you feel like you can never get it clean because it's been there for so long,” she recalls.
When Richard decided she wanted to move to Toronto to be closer to her campus, she wasn’t having any luck scanning Craigslist to find a suitable place. The search was looking grim — until a friend gave her the number for a real estate agent.
Within a few days, the 26-year-old student and her boyfriend found a new one-bedroom condo in the Mimico neighbourhood of Toronto, near campus and in their price range at $1,400 a month. It has all the amenities they were looking for: it was clean, came with in-suite laundry and a thermostat they have full control over.
“I was tired of going to the laundromat and of not being able to control my thermostat,” says Richard. “I like sleeping in the cold.”
In cities like Toronto, more prospective tenants are turning to realtors to find an apartment. Jim Kim, a Toronto native, used an agent to help him find his one-bedroom condo near the Rogers Centre stadium in the downtown core. “In today’s market, people are lining up, cheques in hand, to see places,” Kim says.
With realtors, you can sidestep the madness, he says.
The development frenzy in major urban centres like Toronto and Vancouver means that hundreds — if not thousands — of rental properties are listed on the market every week. But with fewer renters upgrading into homeownership, the supply of rental housing in major cities is tightening. In today's market, speed is the name of the game.
“I don't think people realize how quickly the market moves today,” says Carly Hansher, a sales representative with Bosley Real Estate Ltd. in Toronto. “It's time sensitive. [Agents] can get you in quickly and get the offer in quickly. That’s the edge it takes.”
It was the kind of place where you feel like you can never get it clean because it's been there for so long
Agents get first dibs on multiple listing services, or MLS. (While listings on MLS are publicly searchable, there’s a 48 hour lag before the public can see them — and by then, it’s very likely a few offers have been placed, says Hansher.) Agents can arrange viewings (saving you the trouble of dealing with the landlord), and will sift through hundreds of listings to find the most suitable options in your price range.
And it’s a free service to tenants: the landlord pays the commission, typically first month’s rent.
Another bonus: they’ll be your chauffeur.
“The best part of using a realtor was the fact that he could drive me around — we saw four places in an hour and a half and from those four, I found a place that worked for me,” recalls Kim.
Sound too good to be true, right? Before you pick up the phone to call up an agent, there are a few drawbacks to note.
An oft-repeated claim is that they can help you because they have the expertise to suss out sketchy lease agreements. That may be true, but in many instances, there’s a conflict of interest baked right into the agent-tenant relationship — which could put your best interests at risk.
I don't think people realize how quickly the market moves today. It's time sensitive
The vast majority of real estate agents don’t advertise that they work with renters. That’s because the commissions are substantially lower than the ones they can fetch in the resale market. They have to take on many clients for lower pay to turn a profit, explains Conrad Rygier, a real estate broker with Keller Williams Neighbourhood Realty, meaning they might be less motivated to help you in your search.
Most realtors take on lease listings because they have a long-standing relationship with a landlord. And in many cases, the agent is representing both the landlord and the tenant.
It’s called multiple representation and it’s not allowed unless the landlord and future tenant sign an agreement consenting to the arrangement, according to the Real Estate Council of Ontario, the provincial regulatory agency.
"It can be on the back of the napkin, it doesn't have to be a formal document... But the agent has to be able to produce a document that shows that both parties have agreed that they can represent the landlord and the tenant for the purposes of the transaction,' says Kelvin Kucey, the RECO's deputy registrar."
It’s a free service to tenants: the landlord pays the commission, typically first month’s rent
Another drawback: given the competitive nature of the rental market in big cities, agents are less likely to take on clients who are still in school, who have a less than ideal credit rating and anyone looking for cheaper housing.
“With the way the market is, if I’m not selective, I’m wasting people's time,” says Rygier. “If a client has poor credit, no employment — even with substantial savings — there's only so many times you can represent people and have deals fall through. With the commission’s being low, I have to manage my time and my expenses fairly closely,”
Hansher doesn’t show anything under $1,100 a month. “That’s where they start,” she says. “There isn’t much out there for less than that.”
The best advice, says Kim, is to keep doing your homework. “You can’t rely on an agent,” he advises. “Keep looking on Kijiji and Craigslist… and the thing is that some people just don't list — they put up a sign in their front window. Just walk around the neighbourhoods you want to live in.”
Take responsibility for yourself. “Know your rights by studying the Landlord Tenant Act,” says Richard.
Do your due diligence when choosing an agent. “You can't tell the dishonest [agent] from [the] honest one from their words alone,” says Rygier.
Is your agent sending you listings that don't have any pictures, room dimensions, or aren't on MLS? Then the agent isn't fully committed in the process and they’re likely doing a favour for a landlord. Your agent should have a “proper website, with a decently written property description.”
Hansher doesn’t show anything under $1,100 a month. That’s where they start
Be prepared to move fast — really fast. “People will start looking for rentals two months before their move in date… but a large majority of rental units are unoccupied and landlords need quicker occupancy,” says Hansher. Start looking a month before you plan to move, at the earliest, she says.
Don’t feel pressured to sign a Buyer Representation Agreement (BRA), which obliges you to be exclusive with the agent or face penalties. Most agents don’t make tenants sign one until they’re ready to put in an offer, says Rygier. If you feel pressured, take it as a signal to back away.