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 are 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? And, let me step out on a limb and ask for honesty... How many times have we been the agent that needed the help? Perhaps we saw that we were on track for a train wreck, and got our broker involved, or maybe there was an experienced agent that stepped in and saved our butts... or not. Maybe some of us got the opportunity to do a real live crash and burn.
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. Finally, just about every person with a pulse knows 11 real estate agents.
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 for little money and with no real experience.
Unless otherwise noted, all content of this blog is the property of Lane Bailey, ©2012 Lane Bailey.
I'd love to hear from you...
I prefer the economic model where supply and demand, and survival of the fittest reign. There is something somewhere that prevents the restraint of trade.
There are also too many lawyers, but the number of law suits is not decreasing. Perhaps more real estate licensees will ultimately lead to more transactions.
Amen, Lane. It seems like for every flunky that leaves the industry with tail tucked firmly between legs, there are 3 more to take his place. When you complain about it, the common misconception is that we agents just don't like competition. Which is silly. The dropouts are not taking my business (I am fortunate to have a very loyal base), they just stain the profession. I, for one, would like to see stricter licensing regulations, increased renewal requirements, higher licensing and membership fees, perhaps even a minimum transaction standard. The perception of a low cost, get rich quick industry does not foster excellence. There are great agents out there, but as an industry, we are judged by our lowest common denominator. Alright, now who wants the soapbox?
America was founded on the idea that everyone deserves the chance to fail...How many of the founding fathers do you think had questions about whether or not the country could last? I like the idea that only 20% of REALTORS last the first year. We should be telling everyone we know that fact. That could very well slow down the churn. If we take pride in our profession and our personal success, then the failures of others only makes us look that much better. It's a hard reality that a lot of people don't understand. As an individual, small business owner, all the decisions and responisbilities are mine.
Matt Crow is YOUR HUNTLEY REALTOR! 630-728-6051
Matt and Bob, I think you missed the point. the point is that we as professionals are looked at unfavorably because of those that are the lowest common denominator. I actually believe in easier licensing standards from the state, but more stringent standards for membership in the NAR. And remember, many of those agents that didn't make it through the first year screwed someone on the way out. The person or persons that they screwed think that YOU & I are no different because that may be their only exposure to real estate agents.
And Matt, do you think that anyone that wants to get in touch with you from your comment here won't notice that your phone number is also right next to your clickable profile link? You don't need to stress your fingers typing it again.
Paul, I think that it should be the NAR that sets REALTORs apart from non-member agents. Right now, in the perception of the general public, all REALTORs are real estate agents and all real estate agents are REALTORs. They see no difference. And, instead of making it membership to the NAR tough, it only requires a check for dues and a few hours of ethics class every few years.
Fran, next time I buy property in PA, I'll use you!
Steve, looking at the numbers, you actually need your 'A' game more during an up market. Agents flood into the market and dilute the number of deals per agent. We actually dobetter on average during downturns.