Friday, September 26, 2008

The At Risk Agent

Amid all the doom and gloom that has been swirling around for the last year and intensifying in the last few weeks, regarding the stock market and of course, the national housing market, is it any wonder that some are questioning the survival of that strange animal called the Real Estate Agent? Are we headed for extinction? Or just a severe culling of the herd?

My opinion is that, yes, there will be a culling of the herd and we know from numbers from the last two years that this process has already started. In our local market, we believe the real fall out will be visible at the first of the year ( when local board dues come a calling). If we were to project the groups that might be most likely affected, whom do we think they might be?

Conventional wisdom usually starts off with the "older" group, the agents having been in the business for more than twenty years. You know, those agents who existed before computers, fax machines, cell phones, text messaging, blogging, etc. These are the agents who have been dragged kicking and screaming into the twenty-first century and yes, still miss their weekly MLS books.

My thought here is this is probably not the most at risk group for a variety of reasons. First, they have seen very bad markets before. Think the late 70's into the early 80's. I find it constantly surprising the media today never reflect on how really bad that market time was. Interest rates were at an almost inconceivable (now) high. Eighteen, nineteen, twenty, twenty-one percent were the going rates. Talk about cutting the Affordabiltiy Index into smithereens......there it was. And yet, a stalwart group survived. Combined with some innovative products from lenders and other ways around the barn, some business managed to be done. But just for comparisons, in 2007 our local board of Realtors closed just under 27,000 properties . Back in 1981, the same board closed less than 6,000. Whining anyone? GOI.

And we learned how to use loan assumptions, wrap loans, blanket mortgages, and the adjustable rate loan was born. So those agents still doing business at that time learned things the hard way.

The next most likely pick would be the new or newer agent in this market, the ones who have come in within the last two to three years. While they may not have the interest rate concern to deal with ( yet), they have been bombarded with all the media telling them what a horrible market they are entering and why on earth would they want to be getting into this career? And yet, many have chosed to do so and quite frankly, the ones who went with companies who actually train and school their agents consistently are doing just fine, thank you very much. There is a caveat in there.

No, the truly AT RISK agent is that agent who entered the industry during the time period from about five to fifteen years ago. Times were "good" or so we are told. Business was booming. Money was easy to get (or so they say ) right up to the time where we saw lenders making loans to people who had no money, no credit and sometimes, no income. How easy was that? Many agents have never had to learn to do that nasty thing called prospecting and unfortunately, most existing brokerages have allowed this ignorance and laziness to exist because hey, it was easy for all the players. The brokerages also did not invest in technology tools and most are now too far behind. They relied on the agent to pay the tab and most didn't. Now that it is time to "go to the mattresses", they don't know where to start.

I have some suggestions. First, get yourself to a company that will actually spend time and resources training you. And I mean every day, not just sporadically or once a month. I mean everyday either in the form of a class, a workshop, script practices or personal coaching. If you are interviewing, ask to see a schedule. If they are organized and really doing it, they will have one. Second, learn self-discipline. Make yourself do the prospecting activities that will put you in front of the necessary number of people to get the necessary number of appointments that you will need to obtain the necessary amount of income. Third, have someone hold you accountable for your activities whether it is your manager, your coach or your significant other. Put that person in place. Fourth, treat this like a "real" job. You know, show up for work everyday.

Real estate is hard work. It is stressful and emotionally and physically draining. No, this has not changed in the thirty-four years that I have been doing this. People just kidded themselves for a long time that this was big, easy money. The joke is over.

1 comment:

Sean M. Carpenter said...


A very good post. This job isn't easy and anyone who was told otherwise was lied to and most likely taken advantage of.

Once you realize how difficult achieving success is in this industry, you work harder and then when you truly achieve a significant level of success (defined by the individual and no one else), you can really appreciate the journey it takes to get to the top of the mountain and stay there.

I have found that success in any business requires a few things - self discipline, hard work, a sense of humor and good old fashioned luck. As Samuel Goldwyn once said, "The harder I work, the luckier I get."

Welcome to the blogosphere!