One Million Real Estate Agents Can't All Be Leaving
Get your rotten tomatoes out: I'm one of America's million-strong army of real estate agents.
So of course a friend sent me a highly e-mailed business story of the NY Times: that real estate agents are dropping out.
Since Realtors' aggregate numbers are still rising, that's not the general point of the piece - instead, there are many anecdotal stories about agents falling away. The writer, Katie Hafner, doesn't use the phrase "thinning the herd," but that's what appears to be happening. The residential real estate biz is weakening nationally, and the weak are dropping out.
But interestingly enough, of the four women Ms. Hafner interviewed, two stayed on as traditional real estate agents, and two have simply switched to other sales jobs.
It's always dangerous to make generalizations - or in this case, genderalizations - about somebody else's work, but it raises the question of why sales is so rewarding for women.
I'd argue it's because straight corporate work is such a crappy alternative. Certainly it looks that way in the aggregate - women still make only seventy-seven cents for every dollar earned by men, according to the National Organization for Women.
But it also looks that way anecdotally - I came to real estate as a second career after fifteen years of business journalism. I found even when I had great successes - projects that made millions - I didn't get rich.
I think this is true for a lot of women in the corporate world - it's not that we can't make money, it's that we can't capture it. A sales career, at least, seems to remove that barrier.
How am I doing? It's tough to tell. My first year away from the corporate world, I ended up writing a book about my career switch. My second year out, I put together a little file of laudatory book reviews (thanks, Newsweek!), honest and helpful housing advice (thanks, Money magazine!) and placed some nice people in some nice homes. On bad days it feels like a dumb move, on good days (like today, when I deposited a fat commission check into my bank account) it feels like I could never do anything else.
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I knew the real estate market was going down in 2003, it was unrealistic at the time even though it was on full upswing. No surprise there except that it took so long.
Know anybody on the city zoning board, or over at the tax assessor's office? wink wink nudge nudge...
Too bad the NAR stronghold on the MLS has kept real estate commissions from being discounted in the same way that the internet (etrade, etc.) completely reduced broker commissions on stock trades. When I was young it would cost about $200 to make any trade in stocks regardless of how big a purchase you could afford to make. Now you can buy stocks for $9.95 a trade (or less).
RE Listing agents do very little other than type the listing in the MLS, and if it's a $1 million house they generate $60k commissions to be split between them and the selling agent. That's just criminal.
It's all because the NAR won't let the MLS information become available to other internet sites. They are protecting Realtor commissions.
Want to get the housing market back on it's feet? Go to every citiy that has a Historic Distric and get them to tear down all those home built in the 1940's and 1950's BECAUSE THEY ARE FULL OF HADEROUS MATERIALS.
Belive me there is nothing Historic about abesteos and lead paint.
How sad; I can't imagine a more universally beneficial profession.
Well,,, you got three choices.
Go into business for yourself, MAKING SOMETHING.
Open a Sushi Bar, Coffee House, gourmet chocolate boutique, and starve.
Or,,,,,
Get a job at Wal-Mart as a Door Greeter and spend your nights reading Greenspan*s book and trying to figure out just what went wrong and praying to God that he forgives you for pimping ARMs.
Enjoy!
All the best
Knute (Neo-LIB)
Now is the time a lot of Agents are getting that medial work done with all the money they made.
Get those TOES fixed and straightened out from all thoe years wearing high heels.
Get that boob job so you can make more sells the next time Real Estate is booming.
The current problems in home real estate are the direct result of the greedy, unregulated MORTGAGE INDUSTRY, including many "fly by night" companies created to cash in regardless of consequences.
The housing industry & sales collapse is the CONSEQUENCE of the MORTGAGE MESS. Their unethical business practicess and bilking the public for quick profits finally caught up with them!
Both the unethical mortgage companies, and the government run by Bush were caught with their pants down. The market punishes MISMANAGEMENT harshly. The MORTGAGE INDUSTRY MESS has a domino effect on USA and world economies. And it's NOT A GOOD THING.
An investigation should be done about the COLLUSION between Property Assessor's who OVER VALUED properties to make the loans look good on paper.
And don't forget all those folks that wanted to make a KILLING by "Flipping" that's a new word for "I want to get a 100% loan and sell the house at 50% more than I got it for at no real increase in value"
Isn't it sad that the largest number of defaults are these folks..what do they have to lose? It's the BANKS money------
Just a thought, why doesn't our government make selling real estate as easy as a purchase at wally world? If I want to sell my house and land, shouldn't all the laws be simple and something I could do on my own? Real estate agent is a job made by our own government and adds no value at all to the property.
Even if the market tanks a number of real estate agents who take other jobs to put food on the table will be back to selling when the market improves. It isn't unknown for a real estate agent to take a temporary job driving a taxi, bar tending, waitressing or whatever but keep an eye out for a prospective sale. Real estate agents are hooked on the excitment of a sale. The money is good but it's just a way to keep score for a devoted, pro, real estate agent.
Since I'm not a real estate agent-I can't explain it. I consider myself lucky to recognize the signs of excitment a real estate agent has when they close a deal since I've dated a few real estate ladies. No man can hope to excite a real estate lady like a deal excites them.
Real estate agents made money because they had the ability to monopolize information: information that the buyer and seller created.
For some reason, somebody decided that it should cost $30,000 to sell a $500,000 house. The market found alternatives, decided the $30,000 price wasn't anywhere close to fair, and voted with their feet. The internet played a big role, allowing home buyers for the first time, to quickly look through 50 homes in an afternoon without even leaving their house, and narrowing the list down to 2 or 3 homes before they even left their driveway.
There was no way the position of a "real estate" agent would continue to exist. It was waaaaay over priced.
The interesting data point from Freakonomics is that real estate agents own homes sell for substantially more than other homes in the neighborhood. Wonder why? Because they usually succeed at getting you to low-ball your house so that the home sells more quickly and they get their money sooner. When it comes to their own home, they opt to maximize profit. Hmmm.
Good riddance to this profession. It was a scam from the gitgo.
Between the start of this year and the end of 09, there will probably be a drop of at least 20% in 'working' RE agents. There is a 12 month supply of homes on the market and the only people buying and selling will be the ones that have to.
Good luck to you though.
And wait until those Arms start resetting. Are those tales of up to 2 million homes defaulting real? Who is going to buy them if they are repossesed?
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