Not everyone appreciated the advice Realty Times gave last week to a broker interested in helping make part-time status work for some of his agents and an agent who wanted to work part-time, but was afraid she wouldn't be successful. One Realty Times reader summed it up for others, "Part-time real estate agents, in my opinion, are one of the biggest problems facing our industry."

They continue:

While I often agree with articles you and your correspondents write, there are times I strongly disagree and I believe alternative view points to an article benefit the readers and even the author.

For example, today's article about a part-time real estate agent. Part-time real estate agents, in my opinion, are one of the biggest problems facing our industry. How does the public take seriously a profession that has a significant composition of part-time real estate agents. Does the public seek out part-time doctors, lawyers, and accountants? Yet we want the same standing in the mind of the consumer. We want to be perceived as professionals.

Part-time real estate agents by and large are either inexperienced and therefore hurt the industry by not providing competent real estate services (not because of their lack of desire but because of their lack of experience and/or qualifications), or they do not have the business skills to successfully succeed as full-time real estate agents, or they are just looking to add to "supplemental income" to the family budget. That is hardly a profile that projects confidence and professionalism in the industry. The barriers to entry into the real estate profession are already too low, why make the barrier even lower?

A significant reduction in the number of real estate agents would be the best thing that could every happen to our industry. It would allow for the commission costs associated with each transaction to reduce while increasing profitability. It would force real estate companies and brokers to focus on selling real estate and not focusing on adding head counts as a way of generating income and profitability.

With the annual average number of transactions conducted per licensed agent less than 2, economically it is clear that the majority of real estate agents do not earn enough from this business to survive. Yet when those two transactions are conducted by "part-time" agents it draws potential clients away from the real estate agents who have committed the time and resources to operating in the business on a full-time professional basis.

Those 2 transaction per part-time agent significantly adds to the marketing and acquisition costs for full-time agents, which reduces profitability and/or increases the consumers costs associated with the real estate transaction. Technology has reduced the cost of each transaction, however, marketing and acquisitions costs have increased the cost of doing business. That is not a long-term recipe for success.

If the industry was composed of real estate agents and brokers who truly make their living from selling real estate:

1. The number of real estate agents would dramatically reduce.

2. The quality of our services provided to consumers would improve.

3. Real estate commission would come down as marketing costs come down.

4. Agent and broker profitability would rise.

The only losers would be the NAR and other trade associations, and lead generation/marketing companies. Companies that support real estate broker and agent services could actually become more profitability (sic) because they would be able to easily identify the true performers, and meet their needs, while not trying to be all things to all people.

This is the other side of the coin to part-time real estate agents that you do not address and I have not seen addressed by you or your correspondents over the past 10-years that I have read Realty Times.

Sincerely, Another Viewpoint

Realty Times responds:

We appreciate your writing in to tell us your feelings, but I have a problem with a few points you're trying to make. I'll write this response with your letter and our readers in mind who may not understand what part-time means.

In some areas, such as Winnipeg, Realtors are not allowed to work part-time in real estate, says board member Dave Davison.. What part-time means in that board and MLS is anyone who works at another employer besides his/her broker and works for the broker part-time. Anything less than a 40-hour week is part-time to some people. In other areas where part-time and full-time aren't defined, part-time describes anyone who doesn't work full-time in real estate and who may or may not have another occupation.

That's not as much stating the obvious as it appears. A stay-at-home mom can also be a Realtor, but may also limit the number of hours she spends on the job in order to be available for after-school activities, for example.

As independent contractors, real estate agents are somewhat in control of their output in terms of how much they go after business. There's no statute governing the employment status of agents, so it's a good question to ask -- does it really matter? A real estate agent can do one transaction a month or a year, while another agent completes a transaction every day.

As far as comparing agents to other professionals, they work part-time, too and for the same reasons. Doctors, of either sex, may want to attend their children's after-school events as much as the stay-at-home mom. All they do is shut down the office at 3:00 p.m., and that's what some agents do, too.

So I assume your problem with part-timers is not so much how long they spend on the job, but the quality of their work. Do they leave a lot of loose ends for others to detangle? Sloppy work is also done by many full-time agents.

The problem with professional standards is that they aren't defined and enforced.

The broker who is employing the agent must make it clear what the policies of the brokerage are. Reasonable availability, up-to-date knowledge of laws and issues, and compliance with real estate laws and rules should certainly be standards anyone should be able to meet.

Brokers spend many dollars in support, collateral, training, mailings, and so on. Whoever can't meet a minimum production level based on such support is welcome to work somewhere else or do without some of the brokerage benefits. It's so simple.

If the broker is tolerating low performance from his/her agents in favor of having a higher head count, he or she needs to take Cost Accounting. More zeroes don't add up to more profit. If they're that stupid, just bide your time. They'll be out of business soon enough.

It would be nice if we could close the gate behind us and limit competition, but life doesn't work that way. Fewer agents would not necessarily mean greater profitability for you, as competition would be even more fierce to get noticed and chosen by consumers. That's the lesson of the Internet. Everyone thought it would lower the costs of doing business. Instead, it amplified costs and competition, because brokers and agents had new problems -- lead generation companies working to sell you back your leads.

While too many unprofessional agents may be creating headaches for you, you can also look at it as an advantage. If you're more professional, you're going to stand above the crowd. Just keep your own nose clean, and you'll have the greatest selling point you'll ever need for your services.

Published: October 9, 2007

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