With the real estate market changing in most parts of our country, many brokers are concerned – and they should be.
I was a full-time recruiter when the real estate market was adjusting every year or two! Because of that, I was constantly searching, searching, searching for the “secret keys” and tools to assist me in my recruiting efforts. One such tool I found was – to my surprise – right in front of my nose…N.A.R.!
Our trade association produces some amazing pieces of information – information that can be your “secret weapon” when recruiting. One of those pieces – their annual N.A.R. Member Survey – may look, at first glance, as simply a bunch of meaningless numbers and facts. But, upon closer study, this is precisely the tool you need to boost your recruiting – and even retention – efforts in an adjusting market.
Remember, the key to survival in a changing market is to adjust with the market.
That advice goes for agents AND brokers alike. But for brokers, I think the most recent N.A.R. Member Survey shows some incredibly telling statistics that can help with better recruiting and retention of agents in 2008.
I’ve narrowed it down to the top three “Ah-Ha’s” I gleaned from the latest N.A.R. survey. I wanted to briefly share those with you and then help you apply this to your recruiting (and retention) efforts:
Ah-Ha #1: 37% of all sales agents have been in real estate less than two years, while 58% of all sales agents have been in real estate less than five years.
That is an incredibly high number of new agents. How did this come about? Well, there are two main reasons for the high number of new agents…
First, when we experience a strong real estate market for more than three years, we always see a rapid growth in our membership. The second factor is the fact that, each year, thousands of baby boomer REALTORS® retire. Brokers then must hire new agents to replace them.
This combination of factors has brought the median age of today’s REALTOR® down to 52 years. In addition, the average number of years an agent is with a company is down to just four years. Both of those numbers are lower than they have been in years.
Ah-Ha #2: 83% of sales agents have been in real estate less than 15 years. That means that only 17% of agents have experienced a slowdown in the market.
If you take a look back, the real estate market has been going strong since 1991 in many markets. That is more than15 years! It was a great ride, but it had to slow down eventually.
The true irony today is that we are not in a “slow market” as many would say. We are actually in a “average market.” But, because most sales agents have never been in a normal real estate market, they think this is slow and…they’re very nervous. There have been several articles and news commentaries that say that we have hit bottom and we are on the way back up. That is great news! But, I think the real estate market that we saw in 2003-2005 is not going to return anytime soon for most markets.
When the market is strong, it’s easy for a lot of people to make money (and many make that money without having the proper basic training and the advanced classes that most of us “old timers” had to take throughout our years in this changing industry). Because of this, many agents who secured their real estate license over the past 15 years did not develop their prospecting and lead generation skills. In addition, many of them do not have systems in place to keep their businesses going in ANY market – regardless of the conditions.
Due to these facts, those same agents are dropping out of the business by the thousands.
Ah-Ha #3: The average income of an agent with two years (or less) in this business had an income of only $13,080. And that was the 2005/ 2006 income statistics! Can you believe that?!
That means that – even in this strong market we’ve had – many of the new agents were not able to earn an above-poverty-level income!
So, what will happen to those agents this year?
Some say that the market needs to slow down to “flush out” all the low producers. But I think we need to look further…
If these agents were allowed to “coast” during the good years – without ever needing to develop their skills – does it mean that all those agents need to leave the real estate business? I say “No!” – firmly!
I think that each broker has the responsibility to hold his or her agents accountable and train them properly. Unfortunately, quite a few companies cut training while the market was strong because they didn’t think they needed it. The irony is that many companies are now cutting training because the market has slowed down and they can’t afford it. But now more than ever is when they need training for their agents!
So, what does all this mean to you as a broker? What can you do?
Be pro-active! You MUST teach your agents “the basics.”
Everyone is scrambling to get their teams and agents trained and retrained so they have the tools they need to adjust with the changing market.
There are lots of things you can do in-house as well…
Set up weekly MANDATORY coaching and in-office training sessions using videos, DVDs, or in-house speakers
Host “Mastermind” sessions where all your agents share what they are doing to create business opportunities
Ask one of your top producers to share her listing presentation with the group
Ask another top producer to share how he does his qualification interview for a buyer
Encourage your agents to get their GRI and CRS designations. In addition to giving them a competitive edge, these classes are great way to develop skills.
I think that a lot of agents out there right now have potential. But, in many cases, they are just simply in the wrong offices. Catch those with that golden potential before they quit entirely…the time is NOW!
The number of agents being recruited by the recruiters we coach is much higher this year than in years past. Today’s agents are looking for options, and the brokers who make the calls and book the interviews are hiring lots of agents right now.
One word of caution…
You should not hire every agent that you interview. Don’t get desperate. You’re looking for that “diamond in the rough”…that agent who is willing to work hard, develop her skills, one who desires to be mentored and who is willing to invest in her real estate career.
Who are the best agents to call right now? Just look at the survey. Agents with less than five years in the business are only making $13,080-$46,272. Start with that group.
Be prepared to give them what agents need right now: training, coaching, guidance, support, lead generation systems, and a plan to earn a 6-digit income. If you don’t, they’ll just leave and go somewhere else. Some of your own agents might join them as well!
And, remember…
the key to survival in a changing market is to adjust with the market.
Judy LaDeur
President, Judy LaDeur International
www.JudyLaDeurInternatinal.com
*The N.A.R. Member Survey was conducted with 60,000 members. They had a 7% return on the survey. The survey results are considered to be a good representation of the N.A.R. membership as a whole.