Real Estate Agents Adapt to Market Changes The Buzz


Real estate agents need to be prepared to work hard and adapt quickly if they want to survive in an ever-changing market.

"People typically enter the residential real estate field when the economy slows down and/or home prices rapidly rise," says Scott Kucirek. He is the executive vice-president of new market development for a residential real estate brokerage.

The low cost and the fairly simple process of obtaining a license also enables people to make an easy transition into real estate careers, Kucirek says.

"Real estate is an exciting field that offers a variety of activities and experiences in any given day," says Arthur Cox. He is the director of the real estate education program at the University of Northern Iowa at Cedar Rapids.

"Many people like this sort of independence and freedom to control their own destiny. Many would say real estate as a career is very rewarding because of the 'people' aspect of the business, and the ability to create real value for people, businesses and the community."

Reality Check

"Most people like the idea of being in control of their income stream, and believe they can make more money selling real estate than they were making at their previous position," Kucirek says.

"They also want to have more flexibility in their schedules, enjoy helping people and have a keen interest in homes."

But most new real estate agents underestimate the effort and resources required to succeed in this business, Kucirek says. "The majority of new agents struggle to obtain clients and earn an income in their first year."

Indeed, research from the National Association of Realtors shows 85 percent of new agents call it quits after one year. The problem may lie in unrealistic expectations.

"In my opinion, most new agents believe they will work 40 or so hours a week and earn $100,000, but in reality the first year ends up being more of a 70-hour-a-week job with an income of $30,000, with virtually no money earned in the first six months," Kucirek says.

That causes many agents to run out of money or lose motivation to continue, Kucirek says.

"One of my first hurdles to overcome was finding out the phones at the real estate companies didn't just ring off the hook with people looking to buy or sell a home," says realtor Don Sutton.

"I learned to look for clients because they sure weren't looking for me."

Another drawback is that real estate agents work hours others normally have off -- evenings and weekends. "You have to have an understanding family," says Sutton.

And there's another drawback: agents pay their broker a portion of income earned.

"Most do not understand that the brokerage fee is split many ways and the bottom line going to the individual agent is considerably less than the first figure," says Kenneth Edwards. He is a real estate broker in Oregon.

"Then, of course, you have to deduct the cost of doing business."

In doing research for his book on real estate careers, Edwards found the number one factor for a high dropout rate was "lack of self-starter and self-motivator personality."

"Although that's not the most accurate description in some aspects, it does identify a major element of the business," Edwards says.

"You will fail or succeed based almost entirely upon your own efforts. If you are the type of person who needs constant reassurance, guidance and supervision from others to succeed, real estate is not the profession for you.

"Many companies have outstanding training programs, but in the final analysis the buck stops with the individual."

Other daunting challenges are the competitiveness of the field, and the ups and downs of changes in the market's cycles.

"A challenge for those in real estate is dealing with the sometimes volatile cycles in the industry," Cox says.

Keeping on Track

A file bulging with names of satisfied clients is the single most effective insurance policy against the perils generated by market fluctuations, Edwards says.

"At some point, assuming the agent has an effective and aggressive client follow-up program -- and did a good job the first time around -- most of her or his business will be with former customers and referrals made by them," Edwards says.

"That way, no matter what the market is doing, there will always be a steady flow of people anxious to do business with a true professional. You can never have too many ready, willing and able buyers and sellers."

Los Angeles realtor Sarah Benson says she depends on her "sphere of influence" to survive the competition. People that know and trust you are the best sources of business in a competitive market, she says.

"Successful real estate professionals understand that each time the real estate market changes, it presents unique opportunities," Edwards says.

"The challenge is to be able to recognize, or better yet anticipate, those changes and be ready to take advantage of them."

Agents must know the intricacies of various mortgages, owner financing and government finance programs. They must be connected with mortgage brokers and other lenders who can serve their clients' needs.

Solid training in these areas and others keep realtors successful and resilient to changes in markets and competition.

Links

National Association of Realtors
Check out the career and job resources

International Real Estate Federation
A worldwide network of property professionals

Inman News
Provides daily breaking news and real estate advice

Realty Times
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