Atlanta Real Estate | Atlanta Housing News for Real Estate

I don't have the answer but I agree we'll see many leave and I'm seeing those without "market systems" are really suffering - gone are the days where just having a license is enough and the deals just roll in. I love it - now people need a dedicated proven professional - not just a family member "playing" at real estate.   

I wouldn't know how to answer "How many agents are enough?"

The survivors will be the ones that are there for their clients. That are willing to work to find them the house that fits their needs. The agents that are willing to go that extra mile for their buyer or seller. And not just being there until closing but well after.

The best advertisement is referrals. I hope, god willing, to be here for a long long time.

My two cents.  ^_^

Cyndee, thank you for your comments.  The only thing guaranteed in life is change.  We must be able to see it, make allowances for it, and strategize a market strategy that succeeds.

Jaqueline, thank you.  Exceptional service matters a lot.

Jim - I think every one's reading the same thing. At our sales meeting this morning our manager was talking about how in this market the ones who are playing will fade away and the one's who are really working will rise to the top and hang in there. I share an office with an agent who is a broker, and has been for 22 years, and she said that market fluctuations come and go.

I believe what it's going to take is consistency in your business practices.

I agree with the article 100%. In my opinion, it is a healthy reduction. Many of these agents jumped on to the band wagon when the "getting was good".  Now that the market is readjusting to increased rates and rising adjustable rate mortgages, the number of agents has diminished, and I believe it will continue to do so. It is the law of supply and demand. So to answer the question, the market does not require as many agents as it did two years ago, due to a lack of potential clients.  

I agree totally! I think there are wayyy too many agents and I love working with the "hard working" agents out there. If that is all that's left when the market gets to recovery, that would be great. I'm a new agent ( approaching 1 year in real estate ) and the very fact that most agents drop out of the business in the first two years drives me like nothing else. I am more than determined to hang in there and I love my job too much to give up when the going gets rough.

I have seen a number of high producing agents drop out since Katrina. It was not for lack of business but a chance to do something they thought were more meaningful. I see new agents getting out quicker. I see fewer part time agents. I see the % of men going up. I see agents that work broader areas of the market. I see agents struggling who were once very productive but in a quick decline as they only did small areas of town. I also have no idea of when the brokers are going to see the shift and start cutting offices and staffs. I have no idea of what the discount brokers are doing as I see vey little of them these days.

Now is the perfect time to build market share.  Days of the "order taking" are gone.

Linda well said!  "I believe what it's going to take is consistency in your business practices."

Robert  Thanks for your comments. I think of it as the old joke...."How many agents does it take to screw in a light bulb?"

Amber it is a great career hang in there!

Eric you brought up some very interesting thoughts..."when the brokers are going to see the shift and start cutting offices and staffs. I have no idea of what the discount brokers are doing as I see vey little of them these days. "

If you can make rain, the business will always be there.

First of all Jim, welcome back! We're not seeing a drop off in the number of agents DC area at all. I think part of the problem is the average price of a home is so high, the part timers can earn quite a commission even after their split, it's worth their while to hold onto their licenses where in the past it would not have been. During the last buyer's market in the 90's we lost 30-40% of our agents. Now that one deal more than pays for itself.  What we are seeing is the top agents seem to be getting a bigger and bigger market share. The linited services guys are huting for sure.

 

I have seen a decline in agents.  Some I am sorry have gone.  There are agents who do not belong in our business due to lack of ethics. unfortunate some of these are still around.  The ones who taught they could make a fast buck are finding it hard because they realy have to work.  Its just the nature of beast (the market).

Andy Thanks!  I was moving!  You brought up a very interesting point.  Today there are many avenues for agents that want to stay in the business by hanging their license in a company that has low fees.  Also, I am a believer that this down turn is just starting,  This is going to take a while to work through.  We are returning from a trip to the moon.  There are credit issues, foreclosure issues, consumer confidence issues, and supply side issues that have to be worked out before we can start a recovery.  In the meantime, we also have to provide for our needs of our family and clients.  I am sure there are many agents making those choices.  I personally have a lot of my friends telling me they are struggling to get through very slow time.

Edson  Thank you,

I agree Jim. We're fortunate that we're in pretty transient areas that are always moving, even in slow times. That's not the case everywhere. While this market is good to do some weeding out, it unfortunately catches some very good people in its net. But I do strongly believe that there are opportunities in this market because so many agents are sitting around reminiscing about the good old days. That's why communities like this, and old-timers like you and me (  :-)  ) are such good resources in times like this. Keep up the great work.

Good post. I am a firm believer in the 80/20 rule, and have seen personally some agents come and go.. As a new agent (2 years) I have a good inventory of listings and always try to block out some of the "seasoned" agents in my office who are all talking about how bad the market is, etc.. I am currently doing very well and attribute it to my hard work, I always say, if it is so bad, I cant wait until it gets good! As far as number of agents, I can think of a few off the top of my head that should go.... But I believe the strong will survive.    

Jim, I am sure that we will see a decline in real estate agents.  Natural attrition given the changes in the market.

Great attitude Carl. I think the NAR stats confirm it's the 90/10 rule now.... LOL  I got started full-time in 1992, just as the last sellers market ended and nothing was selling. I succeeded because I didn't know any better. If I'd have listened to all the naysayers I'd be back in a 9-5 job I'm sure. This too shall pass. Those that weather it will come out much stronger. Keep it up.

Jim, I'm hearing almost daily about another agent who's left the business. The ones who were barely making it last year are now failing miserably. They don't know how to generate business in a slow market and were just living off the frenzy before. I believer we'll continue to see a massive ship-jumping trend among REALTORS, especially the part-timers. Not only is it getting harder to make the income, our expenses are all going up as well. Personally, I'm glad to see it. I'm happy to pay more if it means weeding out the agents who were just lowering the bar for our profession.

Orange County California was very similar.  The stats are staggering - 1 out of every 50 people have their real estate license.  I can't wait for the thinning out.

Andy  You are so right!  Recently we've made a great business of referring deals to seasoned agents that are great closers.  They have all the knowledge needed to be extremely successful in real estate, they are not great lead generators,  That is our strength...lead generation.

Ryan  lSelective listings, and lead generation of buyers is the key to survival right now. 

Adam in my area of Atlanta there are probalbly 9000+ agents living here.  Last month there were 210 sales.

I think that people are unprepared for the realities of the real estate business.  The attrition rate in a good market is 80%...even higher in this market.  There is money to be made here, but it's not easy money, it doesn't fall off trees.

 The good will remain and that's positive for the market.

Jim,

The market here never got really hot so it hasn't changed much.  I agree with Jacqueline who commented earlier that those who are looking out for their clients and working for them will hopefully survive.  Glad to see you are back after your move!

The most professional agents will survive.  There were a lot of people who made some quick bucks but really didn't know how to grow their business or represent their clients.  I think this will be healthy for the profession to see those who were taking it easy leave to do something else.

Jim, I have to admit I keep waiting for the day the numbers will drop in my market :)  I figure it will give me more opportunity, especially as a newer agent!  I've been hearing for the past year that agents will start "dropping like flies", HOWEVER, we keep increasing in number.  The market here is slowing but still good so I'm sure that is why we keep growing. 

Anyone ever read "Who moved my cheese?"  Great read, as it relates not only to life or your career,, but to PROSPECTING!

 

--John

Jim - This is a terrific post, and it is a subject I have thought about often.  When I started in real estate, I think there were about 2500 Austin Realtors - now there are 11,000+.  The sales have increased, but certainly not enough to support everyone.  I am fortunate to own a company with about 20 agents, some of whom are productive, and I still actively sell.  One of our colleagues managed one of the largest offices in this area, and she predicts that about HALF of the agents will be out of this business by this time next year.  While that would be a huge blessing for those of us who remain, I don't think it will be that extreme.  I would like to see some attrition occur, even if that sounds a bit selfish.

Jim - This is a terrific post, and it is a subject I have thought about often.  When I started in real estate, I think there were about 2500 Austin Realtors - now there are 11,000+.  The sales have increased, but certainly not enough to support everyone.  I am fortunate to own a company with about 20 agents, some of whom are productive, and I still actively sell.  One of our colleagues managed one of the largest offices in this area, and she predicts that about HALF of the agents will be out of this business by this time next year.  While that would be a huge blessing for those of us who remain, I don't think it will be that extreme.  I would like to see some attrition occur, even if that sounds a bit selfish.

That is a question that only time will tell. We were 23,000 strong here and we started at just over 11,000  when the market started to heat up. No prediction where it will go. We will do 23,000 transactions so I would guess maybe 8000 would be sufficient. :-)

I say use this slow time to get your marketing system together, keep networking and educating yourself.  It is understandable if you have to go get part time work because none of us want anyone to fail and fail their families. I wish each and every agent the best and I pray for a turn around daily.  Don't quit was a blog that I just read and it is right on time.

Jim, I think that the supply of licensees will seek its own level in response to the changing marketplace.  If there is a bright side to the current liquidity crisis in housing, it is that things will eventually settle down and the oversupply of agents will follow suit.

The market shifts and changes. There are issues not that make the market tough, but it will change and there will be some other new set of issues. I remember back when interest was 18% and agents were having a tough time back then also. Agents who are now just getting into the market will likely have a hard ramp up time and should be prepared to sustain themselves through the toughest part until the new agent can get a niche going.

Hey Jim,

My response here on a post I wrote last week ---> http://activerain.com/blogsview/175828/Only-in-the-Real

I'd be really interested on your take on the subject since it was partly inspired by one of your previous posts.

---- Paul

Interesting post. There will always be agents who do just hang a license somewhere and wait for their family or friends to buy .

In my area there are also way to many agents and real estate companies, but over the pass year you can see the #'s dropping! The one's that are going make it are the ones that are honest and do whatever they can for the client in this market!

Jim,

Agents that jumped on the bandwagon of the flip property era will now find out that they left the legacy of having to work for a living as the investors have dried up and so have the offers on the properties they purchased with the assumption of collecting commissions and then profit. Those days are over and now they see they have to cultivate real clients. You will see even more leave the business. Survival of the fittset.

They were talking about this on Wall Street Journal this Morning. They said that most agents were expecting the higher commissions of 2003 & 2004 to continue through this year & they just haven't made the sales.

One of the things that is happening in our market is the growth of a national chain that has higher monthly costs and MUCH higher commission than the average brokerage in our area. I will also probably be leaving, but it is less about the market and more about servicing my clients needs the best.

I think the agents who are focused on SERVICE will succeed. There will always be turnover & people turning into part time agents after a short stint in full time. 

It is funny, in this market, when people change agencies, many of the people at the old agency shrug it off & say, "Well, they must not have been doing well." When in reality, that is exactly the opposite! I see many agents who are doing well & changing agencies in this market. It is interesting.

Wow!  I am surprised how many comments here.  I could not address all individually...I'm under some time constraints this morning.  There is a line that describes this.  "Don't tell me you didn't see this coming!" LOL!  The numbers for the last few years were so exaggerated in real estate, and everyone was too greedy to acknowledge it was a false reality.  When this country was attacked on September 11th, 2001the US economy contracted 70 trillion dollars!  The , Govt.  reduced rates to keep the economy from going in to a great depression.  It worked!  Housing replaced industries lost or damaged...then everyone forgot why it all happened.  Greed replaced need.  Flipping, and speculation became the norm.  No one raised an eyebrow when NAR announced that over 40% of the homes being purchased were not even owner occupied.  The markets now are trying to return to those normal times, and there will be "EXCESS" in many areas that have be addressed.

JIM:  In any system, the conditions of the environment and natural enemies seem to take care of overpopulation.  The fat times of too little competition don't seem to last very long either.  Nature has a way of balancing us, and I agree with many of you, but specifically with NEAL:  survival of the fittest!

Cheers, from DC!

   Jaynee

Jim, your last comment is a great summary of what's gotten us to where we are today in RE. THanks for summing it up.

I'm not sure what you meant by the economy contracting by $70 trillion.  In 2001, GDP was right around $10 trillion.  We did not lose 7 years of output.

Jim, I think your question was rhetorical. You know that less than 20% of licensees are responsible for more than 80% of the business. Does it really matter if they stay or go?

After this correction we will see other changes in the way real estate is sold which will further reduce the need for these marginal players.

Bill Roberts

Good question, great post, excellent observation.  Now is the time when the true professionals will shine.  I feel that the mortgage industry played a big role in so many people becoming real estate agents.  Loans were easy to get, so people who had no real clue about home buying just wanted a house, did not care about being educated in the process, just latched on to any agent.  Many people saw this as an opportunity to make some "easy money."  But those of us that work hard and take our business seriously know that there is no "easy money."  Those agents who got their licenses now see that it takes more than that to survive in the world of real estate.  You have to spend a lot of time and money in order to become successful.  The focus has to be on the client and their needs in order to make it.  I love the referrals that I get because of my honesty (telling them what's true and what to expect within the process), because of my hard work (my willingness to go above and beyond the call of duty to make sure that my clients are taken care of) and sacrifice (sometimes reducinc comission just so that the deal will work out for my client - even though I don't make that common practice).  How many real estate agents are enough?  Enough that will represent the public's best interest.

We are a seeing a number of agents leaving the business or switching companies in an effort to get business.

Jaynee thanks!  I agree with your observation.  Natural forces are at play!

Ryan thank you.

Joe thank you for your input.  I read several econmic papers a while ago.  Without the Fed actions we woudl be in deep doo-doo!  Lets see, no air travel faor an entire week, stock markets shut down, airlines in almost total collapse, our financial system of brokerages had a direct hit, a plunge in the stock markets.  In Atlanta we had laods of business just totally fail,a dn it did cause a recession here in 2001.  I had contracts falling apart all over the  place from emplyess whose companies suth down overnight.  I stand by the comment.

Kevin great answer!

Vicki!  Thanks  But do you think they are playing musical chairs on the Titanic?

http://activerain.com/blogsview/40195/Changing-seats-on-the

 

I've been licensed since 1980.  Remember 22% interest rates?  That was a fun market.  I went against the grain and became licensed. Time passes and the market gets better.  Everyone was talking about too many agents. 1990 the market dives again.  We lost a bunch of agents.  time passes and the market went crazy in 2003, 2004, 2005 until Sept.. this craziness lead to greed, greed, greed.  Order takers were everywhere.  It didn't matter if agents were good or not.  the market let them be idiots.  Now they are leaving for "real jobs" because they haven't learned how to be your own boss and run a business.  It is not an easy business in a normal market.  You have to care about your clients in good and bad times. This is a serious business that has been my life for alot of years and I truly love what I do.  I work hard and take care of my clients.  There will be another wave of agents leaving at the end of the year when board dues need to be paid for next year.  It is said water seeks its own level.  It is the natural order of business to weed out the week.  It's time for weeding again.

Linda I think summarized it perfectly!  I love your analogy of order takers!  How can we forget the rates of the 1980's WRAP loans, no equity etc!  When you think about it back then it was a more difficult time in the sense that when homeowners walked away from homes in droves they had one thing in common.   They had purchased homes with 20% down.  The coming market will bring new scenarios, but with veterans of real estate like yourself to be the winners once more. 

This happens with every real estate cycle.  A big boom and a big increase in agents.  In slower times, when sales are down, you see a correction in the market.  This is when a lot of unseasoned agents can't weather the storm, shut their doors, and try something else. 

I've been suprised that in Michigan and in particular my area that there haven't been more agents leaving the field.  Maybe agents (people) have more staying power than we think considering the market conditions.

I've been suprised that in Michigan and in particular my area that there haven't been more agents leaving the field.  Maybe agents (people) have more staying power than we think considering the market conditions.

Tracy  it is just a cycle.  Sales are not about luck!  They are planned.  In the 1980's you'd hear agents whinning that the broker had pet agents and would only give leads to them!  The secret to survival is develop your own leads!

Tammy..it is just beggining..  It takes a while.

 

The trick is to find a niche, stay focused and become an expert.  Who has time to look to see if there is any competition.  It's always just been in our heads anyways.  There's plenty of fruit on the tree -- we have to be willing to harvest it!  What the newer agents lack is an established referral base -- that should be the largest portion of our "survival pie"!

I fully agree.  We established ourselves on the Internet years ago.  The phones still ring everyday.  We are not closing as much, but we are still closing deals.

One of the reasons physicians have always made so much money, aside from the fact that they get credit for saving lives, is that the AMA limits the numbers of students in medical schools.  Standards are very high and expensive.  Graduates and practitioners are limited and incomes are very high. 

Instead, the NAR followed the Amway model.  Anyone can be a Realtor. 

 

Lenn so true.  There are almost no limits on becoming an agent.

Tracey nailed it, the days of the "order taker" are very limited. I've only been in the biz short of three years and I've worked my tail off for almost every deal (everyone catches an easy one once i a while). I think if you want to survive your going to have to be full time, service oriented, accountable, and have an extremely healthy work ethic. The days of waiting for your phone to ring are over for a while!

Jim it does seem like agents have overgrown as much as the weeds in my garden. Many of our agents are leaving and re entering the work force. Interesting some of us are still busy and continue to market our services. Great Post.

While I agree that a great deal of commitment and work is required, I would state that working smarter wins over working harder.

The survivors will be the ones with the most money squirreled away.

Not necessarily the "best".

Great thought...... It will take a lot endurance for the agent to stay around until the market changes..... We had to work now... now harder,but SMARTER.....make it to through the changes.....

 

 

John, you are so right!  "to survive your going to have to be full time, service oriented, accountable, and have an extremely healthy work ethic."

Frank  There is a saying on Wal Street that can apply here.  The saying goes 'Everyone is an expert in a rising market!"  Many of the  agents that are in real estate today only know the good times.  They cannot deal with correct pricing, real issues of no equity, and for them,,, a 9-5 job looks really good.  I prefer real estate.

Devon I agree!  "working smarter wins"

Armondo...Rainy day funds are smart.  Many old timers in real estate put aside funds for a rainy day.  That means no car payments, low mortgaage, and low overhead.

I think that here in Atlanta, 10,000 is enough.  20% of the agents are going to do 80% of the work anyway... so let's get rid the deadweight. 

That was the figure in the late 1990's.  In 2004 it was 13000.  Today it is 45000.  I agree!

When I got my license two years ago, I made a committment. I told myself that no matter what I was going to make this work. I told myself I would give it my all. I told myself I would be the top producer at least once by my 5th year and that by year 10 I would be making what Lisa (an agent in our office who had been there for 10 years) was making. I will not give up. Could I support myself and 6 kids on my current income? NO WAY! Do I feel I am successful? Yes....because I am giving it my all, this year I doubled what I made last year and hope to triple it in my 3rd year and so on. Do I think other Realtors will give up or have to seek full time jobs? YES! It's inevitable because it you can't pay the bills you aren't going to waste your time. Thank goodness my husband makes good money! Others are not so lucky and will do what they have to do to put food on the table. The market will dictate how many drop out of course. That is good news for those of us that are able to stick it out.

In this business as in any business, only the strong survive.  After the first of the year when memberships in MLS's expire, we will have a much better idea.  If agents don't pay their MLS dues they are effectively out of real estate.  The agent pool is definitely shrinking and needs to in order for the rest of us to survive on what's left.

If 20% are doing the work, why do large brokerages continue to hire the other 80%.  If the industry is going to throw all of these inexperienced agents out there, they we as a group kind of get what we ask for.  Rookies make mistakes because they don't know what it is they need to do.

Some people clearly from the get go, don't have the skills necessary to be an agent.  Prior to hiring someone make them fill out a listing form or contract and see if they can put a grammatically correct sentence together for starters...

I agree 100%!  Plenty of room for everyone, but not everyone will survive!

Great Post!  The less is more theory comes into play.  Less agents means more for those professionals still around.  Many people jump on whatever bandwagon is making money and when things change they move on.  This kind of market weeds out those non-professionals.  It's a good thing.

Jim, I read an editorial on this AP article in our local paper but I must say it was much nastier.  They made all of us out to be greedy, heartless vultures waiting for the next kill.  What a horrible perspective the writer had! 

I believe the industry will suffer a rude shaking up as the housing and financial markets adjust.  What we saw in the last 5 to 6 years was unprecedented and unsustainable.  I don't think anyone with a realistic concept of how this business is run had a delusion that it would last. 

However, those who entered the business with that assumption are destined to fail....crash and burn, I would think.  If I had to guess how many of those agents will be out within the next 2 years, I would guesstimate somewhere around 25-35%.  I think a lot of newer agents who are tech savvy will survive and many older agents who were using the market as a retirement supplement are going to see hard times if they can't compete with advancing technology.

I agree with many of Irene's points, but I believe the percentage that drop out in the next 2 years will be much higher. I heard a statistic a couple of years ago that over 85% of new agents drop out in the first 2 years. That was when in a market was still ridiculously easy to succeed in. Now that things are getting tougher, that percentage should be much higher because most agents aren't willing to put in the effort it takes to truly make it work.

Cheri you are right!  Success takes a committment!

Ray in my market they are still hanging on!  Soem are changing companies as if that will make a difference.  I think that is the biggest mistake.

Melina the brokers hire anyone because if they bring in one more sale  it is a feather in the brokers hat.  That is the old model in real estate.  It is a kin to prostitution of the industry and professionalism.  It would be much better to hire agents that will stay and produce, rather than to join just to sell their own home.

Jen not everyone will stick around to pay dues and associations if they are not earning.

David there was an 80/20 rulr that everyone talks about in real estate, then a 90/10 rule that was bantered about when the Internet arrived.  A figure that I use in my seminars is that 7% of agents control 93% of business.

Irene I agree with you...."I don't think anyone with a realistic concept of how this business is run had a delusion that it would last."  It's just a business cycle that is neither all up or down.  But if you want to make a living at it, you have to take both the good and the bad.

Ryan we are going to have to wait and see.  Right now I do not see anyone leaving our market.

 

I definitely predict that we will see a substantial decrease in Realtors over the next few years.  When I became licensed 10 years ago, there were 25 people in my training class for the company I had joined. Three months later, there were 6 left.  They dropped like flies going back to find a typical 9-5 job.  That was in a thriving market.

The market now is more challenging than ever for Realtors.  In my area, we are being put to the test and only the successful are surviving.

Irene - I agree with you 100%, folks not in our business have absolutley no idea of what's involved, they only see what they want to see, and then criticize what they believe are to high commissions.

Jim - Same here, not many leaving the business, they can make enough on one sale to justify keeping the license. I also agree with the 7/93 rule and the that brokers keep the other 93% because they are on a more favorable split with the broker. Most offices around our area have only one "Top Producer" to promote and help recruit, a loss leader so to speak. I deally they want everyone else on a 45-50% split.

Cheri - Keep up the great work!

Thanks Andy!  I guess we'll all just have to wait and see.

Deb I agree.  We are going to go through some real tests.  I guess there is something to be said for Darwin's survival of the fittest.

Only the realtors that have great follow up systems will survive.  They will have to have a better referral system, great reputation, willing to learn new technology, and tighten their belts.  Our office is contemplating offering to pay the franchise fees, with a lower commission to the agents that are willing to go thru  certain training and sell x amount of homes per year.

As a new agent, I am often questioned and even criticized for even considering real estate, much less making a career of it.  Even as I went through my licensing classes, there was talk of the number of licensed agents in my area.  I am told there was a noticeable surge in the number of new agents in the years leading up to now.  I believe that agents that came in during the boom are at a disadvantage.  Though the number of agents has increased therefore increasing the competition for listings, I believe those who work the business, servicing their clients, will survive.  Even as a new agent, I realize that having more agents does not mean better service for clients.  No doubt, Kay, it means that there are more struggling agents.

Sam, more agents translates into less deals.  Less deals, more agents means leaner times.  It is a perfect storm of sorts.  The real estate frenzy until now has been sustained by some discount real estate commissions, and more agent concessions.  That is about to change radically.  To discount in this market is suicide.  Longer days on market, means more ad costs, more baby sitting listings, more stress, and you'll need to know what you are doing to get the deal closed.  Most agents will not have the patience for this.  Many will move on, or fade away by jumping companies, opening boutique real estate shoppes etc... It does not mean the older agents survive.  Many of my friends are throwing the towel in.  New agents with the right skills, have as much chance to succeed as any

 

Enjoyed your article. I am a firm believer that our choices determine our destiny not the economy or lenders or stock markets. The people who I have met that are successful in every kind of market do so because they adapt to change and change their choices as needed to get the results needed. Feast or famine survival depends on your choices.

I heard Mother Theresa tell a story many years ago about being late for a world conference on Hunger held in India. When she arrived she found a poor hungry soul had died on the step leading up to the building where the confence was to be held. He died of starvation where people had gathered to discuss how to help starving people.

We can discuss the crises or make choices to change it. I choose to make a difference.

Alan thank you!  Choices do help to control our destiny.  However, if I am traveling through a dessert without water, I may not be in a great position to make a significant change.  Attitude can be everything, but it has to be able to perform in the environment in which it is placed.

Jim:

 How did I get to dessert with no water. A Choice perhaps? HA.

Your larger point is well taken. We do find ourselves in circumstances not of our own making at times (The Book of Job is a great example). What I am referring to is more than an attitude however. It is more like the phrase from a Robert Frost poem. "Two roads diverged in a wooded path, I took the one less traveled and that has made all the difference.."

Even when we find ourselves in a "Job" like environment it is our choices "Though He slay me yet will I serve Him" that make the difference and lead to the promised land.

Choices, many of us in the field would say even "Greed" has led to our current crises of debt. We were in Las Vegas when we saw the first signs of trouble looming on the horizon. People were buying at the top of the market and looking to double their money. There were also Realtors who were happy to take their money and offered no sound advice to their clients. Realtor making choices today that have impacted their tomorrows. And then there were lenders using their money like they were playing the tables in Vegas.

Choices, choices, choices and boom we have arrived. How do we get out. Change our choices. Choose integrity over pay day. Choose, sound investing over wishful thinking, choose sound lending over the rolling the dice.

One choice we can all make that can only help is to choose to allow God to take first place in our lives. That will help us in our daily decisions.

Amen Alan...living by the Golden rule is the key. We cn't go wrong...

Alan, my point waws that sometimes we are in a spot not of our choosing.  I personaly cannot change the fact Atlanta has 115,000 homes for sale.  I cannot change the fact that there are 40% more expired and withdrawns a month then sales...So even adaptation does not work if there is not enough to nourish.  So I feel my survival is tied to more than choice and attitude.  I have to have faith and believe I can and will survive, it has to be coupled wiht a plan of action on my part. Personally, I must force myself to yield to new thoughts, embrace new ideas, think outside the box then act.  That is why I come to Active Rain!

Armondo, thank you.

 

Jim:

 Your article has opened some great debate. Thank you for allow me to participate. I think we are on the same page. By thinking outside the box you are adapting to a changing climate and you are active while so many others are getting discouraged and giving up. In Texas about 90% of the people licensed in Real Estate this year will be out of the business altogether in 2 years. The 10% who make it will be the ones who make things happen and not watch things happen.

 I have been to Atlanta several times, I love it there. If I meet anyone here heading to Atlanta I will pass that lead on to you.

Thanks again for your responses to my comments and allowing me to share on your site.

P.S. Believe it or not we still have 100,000 dollar homes in the Austin area. The taxes in Texas keep the prices low.

May God bless all of the effort and hard work you do.

Alan

http://www.wannanetwork.com/alanmaz 

Thank you for your comment!

Hmmm.whho cares...hate to be crass but really. Your business is yours and the market is ..well the market behaving as it probably should. You work, you play, plan and work some more... I guess what I am saying is the good adapt, have systems, relationships and understand we have a business. Some businesses fail...every day... some don't. We just might have a little catching up to do. By the way add to your numbers the 1,000,000 or so agents that don't belong to NAR...

Jim: Great questions, and many great comments!  But one aspect has not been discussed, unless I missed it. 

I think full timers are hit harder than part timers, and the Realtors getting out in this cycle may be the long time full timers.  There are a LOT of big hitters nearing retirement in this business.   

The full timers with teams and big marketing expenses may be the the ones hit hardest by this contraction.  I understand that the 80/20 principle looks more like 95/5 or 93/7 in Real Estate.  The top 5% of Realtors may seem immune but they probably have slimmer margins than part timers and those who are hanging on for part time deals. 

In any recession, when you take 10% to 20% off the top of any market for gross sales, you just took out all the after tax profit for the market leaders. 

I think the shock may be how many top producing and long time Agents get out in this cycle - and how many part timers hang on... 

Great string of posts.

I agree that taking care of current/past clients and building up your referral network is the greatest way to keep a steady stream of business, even in this slow market. Blogging is another way to ensure that you build up a strong internet presence. I believe the agents who do these 2 things will prosper. Agents looking for quick fixes, or "buying leads" will be the ones to suffer. I say, weed 'em out!

Well, since I am new to all this - literally, I am signing my documents with KW tomorrow - I feel I can weigh in.

I know I am coming into this career at a very difficult time. With the financing limitations put on potential buyers, I know I will hit a lot of walls and don't expect to be making a sale every week.

However, I think that if I work very hard and can survive through the current market, then I can succeed in more prosperous times. It will take A LOT OF HARD WORK. But I am no stranger to putting foot to ass to get what I want.

Perrin thanks for your comments you are correct.  Not every agent is a REALTOR!  So there are many more to add to the growing list of competition!

Lonn I fully agree!  Great point and observation.  The part-timer does not have a lot invested int he business, and sole source of income is not real estate.  I do know a lot of top producers that are leaving, their high over head is killing them!

Jim thanks!

Kim Weed them out!  Go for it!

Irene best of good fortune in your new real estate career!

Welcome Irene:

Cycles don't matter to new agents.  You can't go down. 

The only direction for you is UP!  Hard work always wins the day... 

BE GREAT !

I do not think it's the number which makes a difference in market sales, but the knowledge and experience instead. Quality not quantity is what affects productivity. In most market areas, it's a small percentage of agents handling the majority of the business. And very often, it's the same agents which make up that small percentage.

you guys are so way off on the numbers.

in the entire state of florida there are 160K realtors and even with the BOOM of 00-05 the number has remained steady.

in the miami board there are 12K, and in ft lauderdale board there are 11K, these are 2 vastly different cities and they have some of the largest membershgips of any boards in the country, they were ranked in the top 5 by membership.

as for austin having 23K realtors..i doubt it, and atlanta does not have 75K agents, the entire state of georgia does..

so do your research and get the number right.

ps, its a 90/10 rule and really does not make any difference to the number of agents out there.

Lonn makes some great points in regard to profits for the heavy hitters. That's why I believe the best thing an agent can do is work off of percentages. I set aside a percentage of each transaction's income for marketing only. Another percentage for staffing, another percentage for savings. As business increases, totals increase and as business slows, those totals decrease, keeping my overhead down. The savings is what really sustains during slower times, but keeping a fluctuating budget helps to control costs during slower times and build the business during busy times.

Irene, WELCOME to the business. It sounds like you have the right mindset and realistic expectations. Those are two of the most important tools a new agent can have. Wishing you luck!

Derrick I think more agents close more deals for a while.  However, they were marginal deals that probably would ot have closed in normal markets.

Steve Atlanta is 45K in our MLS.  I made no claim on the number of agents in the state of GA that are licensed agents.  I cannot vouch for other cities.

Ryan thank you.

Jim:

I am with you I don't know where Steve is getting his numbers maybe he posted his comments on the wrong group site. I went back to check and see what I said about Austin it is still there for everyone to read and I said nothing about the number of agents in Austin. My comments were ABOR stats for the State of Texas.

Incidently in the Austin Area you are required to join ABOR to get acess to the local MLS and ABOR requires you to join NAR. So all licensed agents in the Austin area also belong to NAR or their broker gets a courtsey letter from ABOR and a timeline.

Jim, thanks again for your post.

Alan thanks!

Quick story: I had a closing recently where the listing agent was a young man from a low service company. After sending the contract back to him 6 times he finally had everything initialed and signed correctly. He was polite and good about returning calls/emails. About 3 weeks prior to closing he stopped returning calls/emails. I called his office and was informed that he no longer worked there. "Why?", I asked. "Oh, he was doing this for a summer job. He had to go back to college."

Scary, isn't it? I don't know if it's worse that a company hired him or a seller hired him and trusted him to sell their house. Of course, to the sellers I'm sure every agent was the same and they don't know that they had a bad agent. I'm doubt they ever asked him anything, just signed where he pointed. It was not a smooth closing to say the least, but at least I got it there.

It is totally legal.  A summer job in real estate , I never thought of that one!  The thing about real estate either a buy or a sell is that it is the most expensive asset you will ever have in life.  So you can ask before you start working with an agent for referrals, testimonials, references, and ask how many homes that agent has personally sold!  That is reasonable.  If you decided to work with someone that does not have a lot of experience, and things go very wrong....it is then your problem.

Hello Jim... I was looking over your ActiveRain site... It's impressive!!! Have you ever had sales as a direct result of using ActiceRain?  I am new.... If you happen to know of anyone wanting to purchase real estate here on Alabama's Gulf Coast, I would be happy to pay a referral... I will keep you in mind regarding the Atlanta area.

We have some GREAT DEALS in Gulf Shores and Orange Beach right now... I look forward to doing business with you... Tinsley Myrick 251-978-5989 http://www.tinsleymyrick.com/
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Tinsley yes I have sold homes for Active Rain.  I would suggest you not place the photos or ads in a post.  However since you are new in AR it does not bother me.  That is what Blogging is!  LOL!

And, of the 45,000, how many do you think will be here next year?  I bet we drop 10%. 

And I would have deleted Tinsley's post... but that's just me.   

Jim, being a survivor of the early 1990's recession and observer of the growth in numbers that you describe, my prediction is that we will see the numbers cut in half when all is said and done which is still more than double what we had then.  I think the survivors this time around may not be the old timers who know everyone in town and who still want the return of the MLS "Book". I think the survivors will be those who embrace technolgy, change, and out-of-the-box thinking and see this next phase as an opportunity to improve their skills and their level of service.  Consumer-centric a must.

Lane  I don' know when they will leave.  It is not as it were years ago.  Today there are so many companies that will allow you to hang your license for almost nothing at all.  They may hang on forever.  There certainly is not enough work to go around.  There are currently 44676 agents in our MLS, and there are only about 5000 sales a month or less.  I believe next month's stats will bear out the number of sales has been deeply cut.  I personally cannot see more than 15K agents needed in Atlanta.  That will never happen, 

Diane  I agree, the old timers that I know are now hitting the road!

Hi Jim:

 It is now a long way to the bottom of your page now....

Just a thought. The Real Estate boom of the past 5 to 6 years across the US sparked a great deal of interest in the profession. Coupled with a frustration of the mid to late 1990's with the stock market many average joes jumped into real estate with their retirement money. Because the market was so hot especially in the West many of those people who jumped in made a great deal of money even though they did not do their home work or even know very much about the properties they purchased. They told their friends in the South, Midwest, East and North.

All of the sudden it was easy to make money in Real Estate(in their minds) and many thought they were professionals. (This again is just my observations and thoughts.) Getting licensed to do Real Estate seemed to be the logical next move: Save the commission, get the best deals first and all of that.

Here is where a "reality check" will hit. First getting into Real Estate means starting a new business. It is hard work. I have started a small business in my life and it was very successful and we sold it for a nice profit. However, I worked 70 and 80 hour weeks with no days off for months to get that business to that level. People who don't like hard work and long hours will check out first.

I also think some people who have been recently licensed will use it for their personally investing. I have met several in my area who have no plans to develop a business just buy investment properties for themselves.

These are just my thoughts and observations, I have no cold hard facts but I think there is still plenty of room for good, hard working Realtors.

Alan

 

I think we have more Realtors doing less business.  Since the prices of homes has gone up, but our commissions are still on a % based (most of us) that people's mentality is that they can still survive with fewer pieces of business a year.  Not saying that there aren't WAY too many Agents out there...but most likely that we won't see the number of realtors go down to what it was in 2001.

 

Lexa Montierth 

Alan Thank you very much  I agree with a lot of your insights, and with the personal investment side.  Years ago, we worked a lot of deals with real estate professionals.  Today that is not the case.  Most of the  deals we work are with newer agents, some have attitudes, some are really great, but have no contract knowledge.  Many of those that consider themselves investors are some of the toughest to work with. Since they are not answerable to a client, they feel they know everything.  For the other agent this can sometimes be more difficult to work with. I also know a lot of the listings that I see in both Georgia and in other states it is very common to see properties for sale with the disclaimer OWNER AGENT! If you also notice the listings sit for months and months!  I personally do not care how many stay in real estate.  That is the right of those that pass the exam and licensing.

Lexa I totally agree "we have more Realtors doing less business"  However, the number of sales has dropped exponentially also.  It will translate into why bother renewing the license and paying all those fees?

With many agents getting out of the business, I hope the level of competence and ethics increases in our profession. I have seen a number of agents who do not know what they are doing due to lack of training or simply lack of business acumen and common sense.

I am thankful that the majority of time I work with true professions that respect all parties in the transaction and care about our profession. Thanks for the article Jim.

Maribeth Peters - Dallas

Maribeth  you are more than welcome.  I do not see anyone leaving yet.  In some reale state markets board dues are due shortly.  That is usually a determinant of the agent level.  We'll just have to see later this year.

I believe there are way too many real estate agents across the U.S., but I think that many of them will get out of the real estate business soon.

The problem is in many states it's not that hard, relatively speaking, to get a license and then agents become an annual, revenue source for the states and NAR.

I would rather see MLS's, Realtor Boards, etc raise their fees, so that the agents that only sell zero, one or two homes a year, get out of the business.  How can they know everything there is to service their client?  I dealt with an agent recently, who wrote an offer on one of my listings.  He was very hard to reach, because he went back to doing a day job and tries to do real estate in his off-time. I was once a new agent too, but I've always continued to learn, improve my skills and it's been my full-time profession.

I fully support all new agents, who are eager to learn, make a business plan, and get to it. 

 

 

Dan I fully agree wiht you.  However the numbers just don't work anymore. The markets that got use to more agents, will have to go through their opium withdrawals after they leave real estate.  Many of the boards will have no choice but to raise their fees.  Like everyone else they started to rely on the big income from agents that were tripping over one another in markets where the units sold per agent plummeted.  Have you ever noticed how it is almost impossible to find out the number of sales sold per agent?  It is because they do not want you to find it.  The same with the units sold in some markets.  I do my own research. In Virginia in the northern VA area, I did some research and found the number of sales since 2004 on a month to month date are off almost 50% if you compare some months in June of '04 to June of 07' etc..  It isn't rocket science, but too many agents are out just trying to earn a living...I find it just easier if you know the odds!

I started in a tough market during the early 90's. but this ebb feels very different. I believe that the playing field will take longer to level out simply because of esculating home prices. I sure have noticed a lack of professionalism and common courtesy over the past few years. 

the people who didn't just come in for the boom will survive. The people that took the right approach and did the necessary work of marketing to past clients and setting up their ticklers for future clients...etc. I know a lot of people who got into the mortgage side when it was booming and all they had to do was answer the phone and now those people are calling the unemployment office.... "The strong survive" seems to make a little sense here...

Debbie I agree.  I was licensed in the Virginia Market in 88'  This is very different market, and the numbers on all sides, agents, sales, mortgages etc...are very exaggerated.  In my own opinion, this is going to sort our very differently. 

Rick so true.

Great post.  That shows you why the average number of houses that a REALTOR(R) sells is down to 2 (TWO) nationally!

My personal opinion is that the number of REALTORS(R) is going to go down.  A lot of them won't be able to survive their respective markets (as you pointed out, how are they making their mortgage payments??).  It's just like animals in the wild... when there isn't enough game to go around, the carnivores start to die off and the ones who can catch the most food will survive (and thrive).

Let's all go catch some critters...er closings!

Bill

Thanks Bill, but I still do not see any agents leaving the business.  The number are holding at this time.

Jim -- great post and great responses.  Probably a lot of factors will impact agents over the next few years.  Enhanced technology, new forms of competition, baby boomers attriting, etc.  One big factor to consider is increasing consumer expectations. Walmart has been in the news lately due to losing consumer $$.  Consumers have decided they are more willing to pay for service even if it costs them a little more.  Professional REALTORS should always have the advantage of experience and service - hopefully this period in time is requiring agents to focus on their service level as a value proposition to prepare them for tomorrow.

Scott Wooters   I could not agree more!  It is all aboutthe level of performace rather than promises not delivered.

Jim, we clicked the link to view the article you mentioned above and got this message: NO SUCH ARTICLE.

We often hear agents say they are pleaed and happy when other agents leave the real estate business.  Some how folks seem to think that if lots of agents leave the real estate business that there will be more business for them and this will some how clean up the industry and only the full time producing agents will be left to share the pie.

The truth is one agent can only handle so much business individually. The reason "showing agents" came on the scene is that listing agents needed help in showing their listings for sale and finding buyers.  The real estate industry may be the only industry that encourages you to seek the assistance of your competition.  The mls systems were designed for agents to share property information and work together.

The real estate industry is probably the last industry to offer an opportunity to be self empoyed, build your own business (under your broker) and follow your dreams for an unbelivable low investment. 

As the real estate market place worsens each day a threat looms overhead that few recognize.  As agents exit the industry there are less fees collected by local boards of Realtors which can effect support services, political power, etc. Continuing education classes could be cancelled which can affect active agents who need their ce credits.   Continuing education instructors could be layed off due to not enough students attending classes and nonessental board support staff may have to be let go. 

In areas like North Florida a board of Realtors who used to have annual trade shows have cancelled their trade show. plans.  Some Atlanta, GA real estate print media companies may be forced to reorganize. And major Atlanta real estate companies have laid off support personnel and closed real estate offices.

It might be a good course of action to hope and pray that many of your fellow agents stay active in this challenging real estate market for the good of all.  Consider offering your support and assistance to your fellow assoicates when you can....they might help you close a deal one day!

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HomeScenes® .com  The link is fixed.  I found another posting of the article.  I agree with you, but it is right to stop and ask questions like "What is wrong with this picture?"  We are currently in a business cycle and we have peaked, and even the National Association of Realtors is acknowledging there is going to be some major fallout.  Keep in mind, this is not a normal downturn or slow time in real estate.  This time is very different.  All out jobs are on the line.  It's epic!

I am also a national speaker and real estate trainer - I also list and sell homes.  A 300% increase in real estate agents in just a few years killed the Atlanta market.  I would surmise that it added to the fraud and exploding foreclosures due to sub prime mortgages.  Full time agents I know did not get into sub-prime.  Most have a conscience and looked to keep their side of the street clean.  I am neither for or against anyone leaving real estate as a business.  If you read most of my real estate columns they are informative, and give practical tips on how to survive, live well and prosper even in very trying times.  I wish you well and thank you for your comments.

Jim - It's great to see this blog revived after a few months.  I enjoyed the comments and, as always, appreciate your advice and practical tips (some of which I've used) on surviving in a slow market.

Devon Smith  A lot of folks don't want to know the truth, but it does catch up to us.  We lieve an operate in a transparent society where we have free access to loads of information.  What do we do?  We watch "American Idol!"  If we pay attention, we can survive!

As a real estate agent, I would say more is better.  More agents will make the cream of the crop rise to the top, and make it so we all have a higher standard to live by as well as keep us on our toes. 

 Dawn Workman, MBA  I disagree.  If the numbers are within a normal range.  Obviously my market Atlanta is not!  We went from 12000 agents to 45000 in 3 years.  A 300% increase!  No one was served by that!  The problem with too many agents is mathematical.  The pie that was once divided into 8 pieces becomes 72 pieces.  How can you survive on 1/72?  How can your broker pay the bills?  More agents led exactly to the market we are just leaving a feeding frenzy for dollars at any costs.  Fraud, undisclosed bonuses or compensation, undisclosed interests, steep discounted commissions, rebated commissions etc.