When the nation’s housing market was running hot and heavy it seemed that you couldn’t turn a corner without bumping into a Realtor.
But things have changed and one Southern California agent fears the industry could soon face a shortage of real estate professionals as the result of an aging workforce and a lack of effective recruitment.
“There will be a shortage of real estate agents in the not too distant future,” said Mel Wilson, broker and owner of Mel Wilson & Associates Realtors in Northridge. “Last year over 100,000 Realtors got out of the business, and 41 percent of all Realtors right now are 60 years old or older.”
Figures from the National Association of Realtors show that in 2015 only 2 percent of Realtors were under age 30. A 2013 member profile survey from the California Association of Realtors revealed that a typical Realtor in California was 58 years old, up from 55 the previous year.
It doesn’t help that realty firms aren’t effectively recruiting new agents, Wilson said.
LACK OF A BASE SALARY DETERS MANY FROM BECOMING AGENTS
“They have to better package this as a career and not just as a part-time gig,” he said. “They also need to help people who are starting out in the business by giving them some type of compensation during that first six to nine months at minimum to help them transition into the career. With most realty companies it’s all commission driven, so you really have to work hard, and have good people skills. If you don’t have those you shouldn’t get into the business.”
Tom Adams, owner of Century 21 Adams & Barnes in Monrovia and Glendora, has a more positive take on the situation — and on aging real estate professionals.
“I think new people coming into the industry has slowed but I don’t necessarily think it will create a shortage,” he said. “And I don’t think anyone wants to entrust their most valuable asset to a 22-year-old kid who just got out of college. There is a certain amount of wisdom that comes with age and maturity that I think people want to see.”
Most didn’t set out to enter the real estate industry
Many who ended up in the industry didn’t necessarily set out to become real estate agents, according to Wilson.
“No one in high school or college is saying, ‘I want to be a Realtor,’” he said. “Being a Realtor is probably a second or third career choice for most folks. You do find a small percentage of business majors who got a degree in real estate and became realtors, but it’s rare. Most people want some kind of guaranteed salary. People who get out of college today usually have $30,000 or more in student debt and that debt kicks in six months after they graduate. No one wants to have ongoing bills but no money coming in.”
Fewer agents will result in NEGATIVE impacts
Wilson, who teaches a real estate course at Cal State Northridge, said a shortage of real estate agents would have a negative impact on the industry.
“When you consider that real estate is probably the biggest investment that people will make, there won’t be enough real estate agents around to guide buyers and sellers through the process so that there will be a successful outcome,” he said. “There are hundreds of thousands of dollars involved in most transactions — sometimes more — and there are lots of moving parts to the process. Things could easily slip through the cracks if you don’t get proper disclosures.”
In Southern California those disclosures could address anything from earthquake faults and cracks in the home’s foundation to plumbing issues and potential flooding.
“If you bought a property on a hillside with slippage and the owner didn’t disclose that the hillside above you is failing ... those kinds of things can turn into nightmares,” he said.
MANY AGENTS LACK MOTIVATION
Marty Rodriguez, owner of the Century 21 Marty Rodriguez office in Glendora, said the problem runs deeper than a potential shortage of agents.
“Real estate is a self-motivating business and people in America aren’t self-motivated, so we already have an issue,” she said. “Right now 7 percent of the agents are doing 93 percent of the business. Back in 1978 it was 20 percent of the agents doing 80 percent of the business.”
Rodriguez, who is ranked the No. 1 agent in the history of the Century 21 system, said she often finds herself working both sides of the fence.
“The appraiser may be doing his job, but sometimes I’ll give him more information to help him along,” she said. “I’ve also had to pull the plug lon enders because they weren’t doing their job and so I would give it to another lender I know. I feel like I’m going above and beyond what most agents do — or know.”
PROPER TRAINING IS KEY
Rodriguez said her agents are thoroughly trained in the fundamentals that will help them succeed.
“We they start they learn every word in the contract,” she said. “They have to know what it means so they can protect their clients. It’s a standard of care. They also need to know the inventory that’s out there and they need to know how to negotiate and understand the lending process.”
FLEXIBLE SCHEDULE AND NO SALARY CAP ARE BIG DRAWS
Wilson, a former NFL player who has twice served on the board of the MTA and on the LA City Fire Department Commission, said there were several factors that drew him into the industry.
“I like the idea that there’s no cap on the income you can earn,” he said. “And I like having a flexible schedule so you can take off time for family and public service. I wouldn’t have had those kinds of opportunities if I had a 9-5 job.
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