Consumers might not notice this readily, but a different kind of correction is taking place in the Southeast Michigan real estate market: agents are quitting the business.
The exodus in the mortgage industry began some time ago, maybe more than a year. With refi business falling off and purchases at a lower rate, mortgage pros were finding it hard to pay the bills. In recent months, we’ve seen large offices shut down and major players announcing their demise, as the entire mortgage industry faces tumultuous times.
But, until quite recently, Realtors seemed to be able to endure the slowdown, for the most part. I attribute this to a couple of factors.
- First, many Realtors sell homes as a part time job or a second source of income after retirement. The earnings they gain from selling homes is a bonus, or welcomed additional income. When times get tough they are less effected by a reduction in earnings.
- Many Realtors have a spouse who is the primary bread winner, providing medical insurance and other traditional benefits.]
For the first time since Dmitry and I entered the business in 2001, we are seeing experienced and outstanding full time agents leaving the business. Many of them have joined the exodus from Michigan, put their homes up for sale, and moved on to new careers in cities that are not facing the economic challenges that we are facing here.
I am sure I should not be saying this out loud, but this trend upsets me. Like many of the good agents I see leaving, Dmitry and I have only one source of income to support our family: selling homes. As we have long told our sellers, “we are as motivated as you are to sell your home.” But I worry less about us personally than I do about the choices that could be left for consumers as experienced professionals leave the area.
Admittedly, the Metro Detroit real estate market has more Realtors than it needs. The market can afford to lose some agents. But this business is not necessarily the perfect model of capitalism, rewarding those who are best at their jobs. If it were, I would not have seen some of those agents who I considered to be excellent at this job leave Michigan recently.
Often Realtors are rewarded for being in the right place at the right time, or just for showing up. Consumers hire their Aunt Tilly to assist with a purchase without concern that Tilly has never been to Oakland County, let alone sold a home here.
This is all part of the consumer’s right to chose. However, I am left thinking that consumer would be better served with a few less choices. I don’t say that because I want less competition. I actually would just like to see the level of professionalism in this industry elevated. I am all for increasing the continuing education requirements for retaining a license in Michigan. The 6 hours we need now is inadequate, as is the 40 hours of coursework we take in order to handle most people’s largest financial transaction of their life. Of course, with the challenges our state faces at the moment, I admit that a change in real estate licensing law is not the highest priority.
My thought for the consumers who read this post: choosing your Realtor is one of the most important decisions you will make in buying or selling a home. Make an informed decision. There are lots of us out there, but we were not all created equally.
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copyright 2007, Maureen Francis. Post appears courtesy of miOaklandCounty.com
I doubt that there has EVER been a better time to make an investment in Michigan real estate. Opportunities abound, and smart investors will be rewarded.