20% of more than a million is a big number…
Today, I read that the number of Realtors in this country is expected to drop by 20% or more in 2009 according to a poll conducted by Inman News. I realize that this is a natural consequence of our poor housing market. But I have been surprised to see wonderful agents that I respected a great deal, leave the business and I wonder what makes the difference between those that survive (or even thrive) and those that don’t.
For several years now, I have had a quote taped above my desk. In my hours spent coaching agents, and even in moments of my own frustration and doubt, I have referred to it. I believe the author is Goethe but that is debated. Either way, its message is one that never ceases to strengthen me.
“Until one is committed, there is hesitancy, the chance to draw back — Concerning all acts of initiative (and creation), there is one elementary truth the ignorance of which kills countless ideas and splendid plans: that the moment one definitely commits oneself, then Providence moves too. All sorts of things occur to help one that would never have otherwise occurred. A whole stream of events issues from the decision, raising in one’s favor all manner of unforeseen incidents and meetings and material assistance, which no man could have dreamed would come his way. Whatever you can do, or dream you can do, begin it. Boldness has genius, power, and magic in it. Begin it now.”
Difference between success and well, not success:
That quote may contain the biggest difference between those that remain successful in real estate and those that leave the business. “Until one is committed, there is hesitancy, the chance to draw back…” – therein lies the answer. If you lack a real commitment, the chance to draw back remains and a Plan B is always consuming a portion of your attentions and energies.
There is a gentleman in my Mastermind group that is really a great example of deep committment making a big difference. He is the sole provider for his family of five and for some agents, this kind of pressure – in a market rife with challenges – might be enough to drive them to a safer, more predictable type of income stream. Mike has never wavered in his committment to his clients, his business, and his family and he has had his best year since he began in the business 4 years ago.
The irony in that small shift in thinking – the commitment – is that often “A whole stream of events issues from the decision…” in an effort to support you. Does it come from the work you put in with your renewed commitment? Or is it Law of Attraction? Does it matter?
As you begin your new year and start to execute on that excellent business plan, ask yourself the level of commitment that you bring to your business. Don’t let hesitancy or doubt put your business at risk. We want you to be included in the 80% that will be showing up as a Realtor in 2010.
Happy New Year!
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Amen sister.
All IN or nothing. Go BIG or go home.
Commitment is an X factor.
Thanks.
You’re right on the mark with this one!
‘If you lack a real commitment, the chance to draw back remains and a Plan B is always consuming a portion of your attentions and energies’ sums it up beautifully. I’m always amazed at other agents who are always pitching the ‘next big thing’ to me, and it’s always those agents who seem to struggle in the RE biz. They’re not fully committed to it, therefore will never get to that next level.
I couldn’t imagine it any other way!!! When I tackle anything, it’s usually 100% or I don’t waste my time!
Ken – Wow! I wish I had thought of that while writing this. ‘Go Big or Go Home!’ is the family mantra while we ski and it certainly fits the bill for this!
Ryan – I think there is so much truth in what you said about agents always looking for the next big thing. There is no immediate fix for a business in flux. Sometimes our attentions become spread too thin rather than staying focused on the plan we committed to at the outset.
20% is indeed a sad and sobering number. It’s tough to see someone walk away from a career that they’ve spent so much time and effort creating. It’s something I think about every day.
But here’s an even more sobering thought: That number may turn out to be greater than 20% when this year is over.
Why? In many regions, the number of transactions dropped in ‘08 by well more than 20%. Add to that the dip in average selling price, and it becomes evident that the PIE is shrinking at a much faster rate than those who live off it. (The huge tilt toward REO sales didn’t help matters either.)
Finally, one could make the argument in many areas that there was an excess of Realtors for the business to support to begin with.
All of this points to one conclusion: 2009 will be the year of reckoning for many, and we all will have to work harder, smarter, and longer than we ever had before to take a bigger piece out of a smaller pie.
Here’s to seeing you all there!
In 2007 my local board dropped 18% and it looks like 2008 will be in the 20% range. Who knows what will happen in 2009. For years in the past selling real estate was easy.
For builders it was “If you build it they will come”. I was in a subdivision yesterday where the builders properties are now short sales and not too far away in another development every home was a foreclosure.
For agents not enough effort was put into managing leads and contacts. There were just so many of them agents didn’t have to worry about it. This would possibly be good training for today’s less than flattering market.
The “Good Old Days” are gone. It’s time for agents to run their business like a business. I’m probably preaching to the choir here but the agents falling by the wayside more than likely will never read this.
I’m all for the professionals staying in, but the fact is that the vast majority of “Realtors” don’t do any business at all. Those are the ones who need to find a new hobby to occupy their free time.
I think we need to lose at least 40% of the current Realtor population.
I am wondering if this stat is a little misleading. Has the number of licensed real estate agents dropped by 20% of the number of agents who chose to pay dues and join the NAR? I am guess that less than 20% have dropped out of the biz, some have simply dropped their NAR membership.
I agree with Jim though, the less Realtors there are, the better it is for the rest of us, not just monetarily.
No surprise, but I’m with Jim. 20% may be surrendering their license, but probably another 35% are getting “real” jobs and even more staggering is that 15% more are probably doing 1 or 2 transactions a year. Even in a productive market 20% were really making a career out of it and carried 80% of the business.
Our Association only lost 100 of it’s 1500 members at years end. We have about 20 transferring from other agencies, 12 who are new and just applied for membership and a truck load that are registering for new classes. We’ll not feel a heavy loss in “numbers”, but we’ve seen more than a few folks having to “make room” on their credit cards to pay dues.
I really think agents should NOT concentrate on number of competitors, because you just can’t quantify if they are really a threat to your business…
Thanks for the insight in this post!
Jim & Matthew,
That’s a great point that I forgot to consider…there are indeed a bunch of dormant licensees in my area, and that will skew the numbers significantly. However, as I look around our weekly staff meeting with all of our “active” agents, I still wonder how there’s enough business to support everyone…
I truly hope there is!
There is an awful lot of intolerance for the part time agent here. I taught RE lic. law for over two decades, I met a great number of wonderful people and agents that operate in a less than exclusive work environment (multiple careers). Conversely I met plenty of full time “Jack Ass’ types. Live and let live is my opinion.
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Steve,
My comments weren’t related to dual-career agents. I also teach pre-licensing and my experience has shown that only about 20% either full time or dual-career can actually handle the job. Mostly because of lack of dedication to education and a desire to make this a career.
Having said that, there are very few who can do this proficiently without doing it frequently. This is a career that is more “on the job training” than anything I’ve ever seen before.
Dual career is great so long as they can still give their client 100% and the if not, the client is aware of the barriers and ok with them.
Steve –
I do have intolerance for part-time agents. You don’t have part-time doctors, mechanics, (ok, some lawyers), plumbers, etc.
Why? Because to be good at this business, one has to do it full-time. If you’re not doing more than 2 (really, 10) transactions a year, you’re not making enough mistakes to represent your clients effectively. You’re likely not reading the blogs, you’re not going to CE, you’re not going to local association meetings, you’re not showing property nearly every day … I could go on and on. (not networking with other agents, building a book of plumbers, contractors, etc) …
Part-time agents, in my opinion, do a disservice to themselves, their professions, and most importantly their clients.
@Matthew I can’t speak for Virginia, but in FL the market has crashed so dramatically that there is no other option for many but to switch and or add a second job. The local Board here was well over 1600 in the ‘05 time frame. The last count the Realtor Pres. (an old friend) told me was 800 and many hadn’t sent in dues. To declare that these results are because of lack of committment or poor training is well, almost silly… “A rising tide lifts all ships…” and the reverse…
Agents who stay in the business are forgoing the “automatic button” gimmicks that are passed off as cutting-edge technology.
They are investing their time and money is serious foundational systems that support the long-term interests of their business.
Aloha, Linsey – great post and oh so true! Although I have to say part of me is glad to be rid of those agents I call the “carpetbaggers” – the ones who came into the industry as it was trending up because they saw it as a way to “get rich quick” – and who are now onto whatever the next great thing is to make them money quickly.
What we’re having a big problem with right now on the Big Island is dealing with the “part-time” agents who have another full time job such that when you call for a showing appointment they can’t call you back for 8 hours because they are at their “other job” or the ones who can only show your listing at noon to their clients because it’s their lunch hour. While I understand and deeply empathize that times are tough and getting another job is a necessity for some agents, it’s my belief at that point they should step back and play the “referral” game until such time as their finances or the economy and industry improves so they can work full-time as an agent again.
Both groups of agents, in my opinion, keep contributing to the “negative opinion” many consumers have of Realtors – in other words, they make ALL of us look bad. I hope they are the ones making up the biggest portion of the 20% leaving the business.
Linsey – I believe 2009 will be a make or break year for many agents. Yes, in a sense, I am glad to see some agents leave – OTOH – I’ve seen many good agents leave. They simply did not keep up with the changing times and technology.
It is a bittersweet reckoning.
I also feel little sympathy for part-time agents. They mostly got into the biz to make a “quick buck” on the side. They can all go! I have been a full timer from the get go, and I’m now a broker. I have fired agents in the past when they decided to go “part-time”. We need full time career agents that actually work for their money… So goodbye PT’s.
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Lindsey, we have a saying in Michigan, that started in the U of M lockeroom.
It was by Bo Schembechler
“Those who stay will be Champions”
In our area volume is so low that only the top 2-3% actually have viable incomes. Last month the entire lower part of the county had 121 closings. It’s usually well over two times that number. The population of the area in question is close to 500,000. So most of us simply don’t have a choice but to “add on” other work _ IF we can find it!
Oddly enough this isn’t impacting the PT group who were always in it for the quick buck. They can wait to their hearts content because they have a FT job. So the shakeout is getting rid of the dead wood. It’s getting rid of some of the more committed types.
Sad but true.
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Ruthmarie, you hit the nail on the head, the issue really boils down to volume- it simply doesn’t exist.
As a REALTOR, trainer and recruiter for my company, I always asked the question “So, tell me, if you weren’t doing this, what would you be doing?” The minute they’d answer “Well, I’d be…” I knew they weren’t going to make it, and I would tell them so…”then you should go do that.” Never rude or disrespectful, just honest.
Being an entrepreneur isn’t for everyone, and just because you passed your Real Estate exam doesn’t mean that you’re going to make it in Real Estate.
It was heartbreaking to me as a recruiter, staying in touch with new agents who just passed their exam, only to find out they had left the business and were now “NBA” (No Broker Affiliation) because they couldn’t afford to stay in Real Estate….
Well, we’ll see what the future holds…