I spent nearly an hour yesterday talking with freelance reporter, Christian Gaston, about all things real estate. He’s got a couple of stories brewing so I won’t steal any of his thunder here that would relate. I’ll post or let him post once the stories hit the streets.
One of the subjects that we talked about that was off topic was what our changing market has in store for Realtors. Lots of us entered the market when it was easy money. The barriers to entry into the real estate profession are too low. It would cost just over $1000 to be able to call yourself a Realtor in less than 60 days. You’d be completely unprepared, inexperienced, and lack to professional tools to fully service your clients but you’d be in business. You could get your Internet access from the public library and buy a disposable camera at Safeway just in case you happened to get a listing from friends or family that were trying to help you jump-start your career. You could probably get away without having a car. Carefully plan to meet your buyer at the one property you’re going to show and arrive early enough via public transportation or bike to cool down and look professional by the time they arrive. Pray that the listing isn’t at the top of Council Crest. Just remember that you don’t get paid until the deal closes which will mean a couple of months of ramen unless you have financial backing to realistically not receive a paycheck for 90 days. What? You thought you could do this part time?
Did I just describe your Realtor?
Obviously everyone starts their career at zero. I have no problem with that. I know I can find an attorney that will charge around $50 an hour. I can also find one that will charge $400. Is one better than the other? It entirely depends on the situation. What we do know is that they both passed the bar exam which is well respected. The bar for entering real estate is a little more than a trip hazard. I honestly think that if you fail the exam, you shouldn’t be able to try again for a year.
The distinction between full service and discount brokerage isn’t clear either. Each individual agent determines what their version is so it is up to the client to know what they are getting regardless of how the agent describes themselves. If you and a friend are going to look at numerous houses on a hot summer day, you might have liked to have known in advance that your agent drives a two door car and the air conditioner broke last week. They may have the best website in the city but your day is going to be pretty much a disaster as you unfold yourself from the backseat for the tenth time.
After a listing appointment yesterday we were told that the seller has a friend that will list their place for a significantly lower commission rate than we will. That’s nice but we won’t come down and we’re not going to be upset if we lose it because we feel that what we offer is commensurate with what we charge.
Our market is clearly cooling. I have to believe that we are going to see fewer people trying to make an easy buck at it as a new career and see more people dropping out of the industry who are finding they have to work harder or lack the tools or capital to compete. Hopefully the cooling market will thin the agent herd so that we can strengthen the perception our profession.
It is even easier to become a lender. About $25 and an online exam and the state says you can call yourseld a Loan Officer. Most Mortgage Brokers provide minimal training so it either needs to be self driven, or school of hard knocks.
With internet lending you never have to come face-to-face with a borrower so it can be hard for an uneducated person to know what they are getting into. Just as a realtor is more than a commodity, so is a mortgage lender. If it was just a low rate and fee then you would see 7-11 getting into the loan business.
While this year hasn’t been the easiest due to desperate lenders promising a borrower whatever they have to in order to make a buck, we also have seen a thinning of the ranks. This is good, and healthy. We will be left with a stronger corp of real estate professionals and mortgage lenders who know what they are doing and can provide expeet advice. I welcome that.
Your post is factual but I would hope new agents would educate themselves. That’s where the board comes in. Here in Naples, our board offers a wealth of classes that provide fantastic education to the new REALTOR®. You’re right that someone could because an agent very quickly and without training but I think it would be tough for them to last in the business unless they really took it upon themselves to learn immediately and expand their real estate knowledge.
Of course our local RMLS board is a great resource as well. However, a lot of agents have never walked in the door. The ones that search out the knowledge and education are the agents that will probably make it in the industry. Like any time you are “self-employed” the motivation, determination, and focus has to come from within.
Great post Charles! As you saw, I posted similar musings at my blog
Couldn’t agree with you more. And Jennifer too on the response to the boards having classes. Having classes available is one thing. Getting people to attend, listen and then practice what is taught is a completely different animal.