Saturday, August 4, 2007

Are there just too many real estate agents?

OK, stick with me here for a few minutes. I think this is becoming a more valid question. Looking at the most recent numbers I could find in a quick internet search, I found that there were over 1.3 million REALTORs (as of November 2006), and that doesn't count the ones that aren't NAR members.

And, those agents averaged 12 sides per year. Link to source here. Their average income was about $49,000. I chose this source for this, since it didn't normalize for a mythical 40 hour week. In reading a little background, I ran across a NAR paper that showed membership to be around 1 million members in 2004. If that is the case, there was almost a 30% increase in our ranks in under 2 years.

In other reading, I'v heard that 80% of agents fail and drop out in their first year, and that 80% of the remaining agents drop out in the next 4 years. That means that 96% of new agents are out of the business in 5 years. This tells me a few things. The first thing it tells me is that agents are not prepared to be in the market when they become licensed. They are obviously not trained on how to run a business. And, I would guess that a lot of them aren't that well trained to do their jobs, either... there simply isn't enough time.

I think that this is one of the main reasons we have such a low opinion with the general public. Look from their perspective. They had a very good chance of dealing with an agent that didn't have enough training to handle their needs, or be able to efficiently run their own business. Face it, how many times have all of us dealt with an agent that just wasn't making it? Further, how many times have each of us had to step in and make sure that the other agents job got done so that we could get paid? But, the point remains that there are too many agents that don't have experience, support, or training. Some are just plain dumb... not nice to say, but we've all dealt with at least one.

I think that there are a couple of things that need to be done to address this. The one that I don't like is that the various states could make licensing more difficult. I don't like that because I am a libertarian and dislike the government taking too much of a role in my business. What I DO like is the NAR making membership more stringent. I've said it before. Perhaps there should be an apprentice period with required training in order to be a member. I like that better, because the NAR is a private organization, and it would allow REALTORs to really be set apart from non-member agents.

Doing something along this line would make being a REALTOR more valuable, as well as deliver a better quality experience to our clients by making those that do become REALTORs better trained before dealing with their own clients.

Being a REALTOR shouldn't be something that can be done on a whim with no real experience.

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