The real estate industry allegedly has one of the highest documented attrition rates of any profession in the country. According to the "significant points" on the real estate agent, broker, and appraiser section of the "1998-99 Occupational Outlook Handbook" jobs in real estate should be relatively easy to obtain due to the thousands of people who leave the profession each year."
Although, no figures are compiled or stored on the exit rate of real estate professionals by the only trade organization large enough and powerful enough to document this trend - the National Association of REALTORS®, it is common lore that hundreds of thousands of people join the profession every year and hundreds of thousands drop out again. The question is how did this rumor get started - and it is a rumor until someone puts some actual statistics behind it - and why does the real estate industry have such a perceived "failure" rate?
The answer could lie in pre-employment perceptions about the actual job. When most people think of REALTORS, they have an image that comes to mind - a middle-aged person who drives a big car, wears nice, professional looking clothes and shows houses. They seldom see the "dirty work" behind the facade of the profession - the hours of cold calls, door knocking, and phone work it takes to get customers and the extensive services rendered to keep them happy.
Because of the relaxed standards to gain entry into the profession only a few years ago, few people perceive the profession to be a real job, despite the fact that practioners must now accumulate classroom hours the equivalent of two years of college or more to be successful and that competition is so keen that agents must also become computer literate and technology oriented in order to function at even the most basic level. Virtually all MLS information and a great deal of continuing education , news , information, and interoffice/client communication is performed electronically.
One of the most often misunderstood aspects of "getting started" is that the broker and the agent's family and friends will provide them with listings and customers by virtue of being associated with a particular office. Nothing could be further from the truth.
Other surprises lie in wait. Because of the current nature of service delivery, the agent is vulnerable to having valuable time wasted by buyers who buy from someone else after weeks of showings and sellers who try to cut commissions to keep more equity.
Although many brokers and trade associations such as Henry S. Miller, Realtors in Texas and MRIS on the East Coast provide extensive training to their associates in software systems, contact management software, and sales techniques beyond those required for licensure, the reality is that once you are given a desk, you are on your own to make something happen. Floor time or phone duty can sometimes lead to new customers as buyers and sellers call in to "talk to someone" about the buying or selling a home.
Many people meet agents for the first time when they attend an open house, where the agent asks a few questions and serves cookies to attendees, making the job look easy and fun. Because the agent is working to sell homes, the perception is strong that the job is akin to working at home - an easier job than reporting to an office.
Much of the agent's time is spent away from the desk, in which they are meeting people, showing properties, analyzing properties for sale, researching the market, and other duties. Agents instead take their desks with them in the form of laptop computers, cellular phones, pagers and other accessories, making the investment in technology several thousand dollars. That is a big investment when you are starting out, but one rich in dividends if the agent can make the financial commitment. Without these tools, the agent will surely find doing business more difficult.
Agents work longer hours than other professions. Instead of a standard forty hour week, one of every four worked 50 hours or more a week, often on weekends and evenings when much of the rest of the community is at leisure. However, median earnings of about $31,500 in 1996 means the average agent earns less than $605 per week, and at the number of hours worked earns only a little over $12 per hour. The middle 50 percent fares better with earnings ranging between $20,500 and $49,700. But, the lowest paid agents, ten percent in the industry, earned less than $12,600 per year or $242 per week.
If a new agent can tough out the rookie period, earnings raise substantially with the number of years worked, the experience gained, and the number and type of designations earned. Certified Residential Specialist, a designation earned through the Residential Sales Council, are 40,000-plus Realtors who are responsible for 26 percent of the real estate transactions nationally. These agents earn almost double what the average agent earns - $69,000. How the agent is paid and under what kind of plan can also make a difference - RE/MAX agents earned an average of approximately $93,000 in 1997, with eleven years experience.
One reason why earnings are so comparatively low is that real estate sales is one of the few professions that can be pursued part-time. This is both an advantage and a disadvantage to the industry. The advantage is that it allows people to enter the profession with other commitments such as family, or a job to provide seed money while they get their real estate careers going. The disadvantage is that the lack of total commitment and conflicting priorities dilute the professional image of the Realtor, and indirectly affects the public's perception of quality of service and perceived value of services rendered.
It is clear that the profession is more demanding in terms of baseline skills needed. An agent can no longer expect to be successful without having a financial cushion to get started, a working knowledge of computers and software programs, and training in sales techniques that heavily emphasize how to negotiate the vast number of things that can go wrong in the real estate transaction.
New hires must be told that the real estate profession is no longer about selling properties. It is about seeing that they sell - and close.