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.
________________________________________________________________________________________________________
copyright 2007, Maureen Francis. Post appears courtesy of miOaklandCounty.com
Gary,
I don't think it is only in our market and I have a feeling the most agents who skim this headlines, think it is a post about falling prices. Ho-Hum.
Maureen, Is your state leadership actively soliciting REALTORS to quit like Minnesota's Glen Dorfman? He did a third plea to the membership in the Minnesota REALTORS Update this week. He even asked bloggers to think before they published negative comments about him.
As to the market, I'm fortunate to have an unemployed spouse (recently laid off) on whom I depended for insurance and medical. Now it is my income alone which is supporting the two of us. It's not a pleasant place to be. However, for Glen Dorfman to imply that I am less than professional because I did or did not close a certain number of transactions is unprofessional.
Our market usually shuts down at this time of year. T and I have been experiencing more than normal activity. I don't yet know if this is a market trend or just that we were the select few who got the leads.
I'm with David about the quality of client. Some have been gems this year. People in difficult spots looking for short sale listing help who normally are angry, but were beautiful to work with. But that type of client has been the exception, not the rule. A couple times this year, I've wondered if the stress is worth the paycheck and if it wouldn't be easier to just go 9-5. But then I get the visceral reaction and go back to getting signatures at 9 PM at night when the nurse gets off work and driving 40 miles for an inspection and spending hours on the phone trying to get documents that are not being provided and . . . Maybe I like stress afterall?
Can I politely disagree?
Although I, too, am seeing the experienced, "mega-agents" in my area slowing down, leaving the business, I am crazy busy. I have a theory - allow me to elaborate.
I got my license when the market was coming down. I knew it was coming down. My fiance makes enough money to make the house payment, and most of the other "necessities". Our debt is minimal, with no car payments and no credit cards.
I went into this knowing that there was only one option - I had to stay afloat. So I proceeded to do everything I could to do so. Marketing, farming, etc.
I sent out expired letters. I got MANY calls, some of them a month or two after receiving the letter, and ALL of them said they never received an expired letter from anyone else. Just me.
The FSBO's in the area are claiming the same thing. No one is attempting to contact them at all.
Granted, I wish I had more experience. I'll probably always wish that, because there is always something new to learn. However, I think when the market was good for so long, no one had to farm, marketing extensively (or obsessively), and focus on getting business. I think that they have forgotten how.
In five months I had outsold 15+ experienced agents in my area. I was shocked when I found out. I had thought that they were all doing so much better than me, but in reality, I was keeping up quite well. It may be a down market, but you get out of it what you put into it, and I'm putting my all into it, and not giving up.
Arkansas Realtor - I can relate, and I just had to comment back to you, even though I'm sure your comment wasn't meant for me. I think it all depends on YOUR situation. Are you still paying your bills? At least the major ones? (House, electric, car...) If you can still do that, I guess the decision would be more of what you WANT to do, not what you have to do. If not, then as bad as it sounds, perhaps the opportunity was given to you for a reason. You know, a couple years from now you may jump back in the real estate game and be able to do much better - who knows? However, don't assume - use worst case scenarios, and decide from there.
I hope that helps a little.
You'll probably laugh when I tell you. 8 months. But I've been working for RE/MAX for two+ years. I've watched MANY agents come and go, and it breaks my heart every time I see one leave.
I had an excellent year so far. Next year, it's going to be a different market than today - I'm sure of it. I think the big key - for all of us - is to ADAPT to the changes. What is selling in your market? Is it foreclosures? Begin contacting asset management companies and try to get some REO's. Is it land? New construction? Recreational properties? Go through the solds to see what IS moving, and then try to get a piece of that pie. This summer, lakeshore was selling, so I marketed lakeshore. In the fall, the foreclosures are selling, and now I have REO's coming on the market. Adaptability is the cure for a down market, I think.
Although, as some veterans tell me... what do I know? I have only been an agent since March!
I didn't laugh. Your enthusiasm is GREAT!! Don't ever lose that.
I wasn't even looking for a job. This opportunity just fell in my lap. I think that I am going to take the job and try to stay active in real estate. I can do my mailouts and marketing in the evenings/weeends and focus more on being a listing agent rather than a selling agent. That is doable, isn't it? Who knows what the market is going to be like next year. At least with the other job, I will have a guaranteed income.