By Mike Bodeen · 4 November 2024
Last week we discussed a young man (we’ll call him Lonny) who, 6 years ago, left California to began a Phoenix real estate career. He had all the right stuff: smarts, enthusiasm, personality, and dedication.
But Lonny lacked one (and perhaps 2) key ingredients for making it in the real estate world. Number one, Lonny lacked contacts, aka as a sphere of influence. Number two, he also lacked someone in his life (such as a spouse) who could help make ends meet while he started his career. The chances of succeeding lacking those two ingredients are near zero.
For most current agents, real estate is not a career and it’s definitely NOT full-time. Retirees who have a retirement funded from a previous career can make an easier transition but 49% will do one or no deals per year. A spouse may work real estate to help fund their kids’ education or their vacation. Most agents are not the only wage earners in a family.
So, we now return to the question; can real estate be a good career following the epic Sitzer-Burnett decision?
A resounding YES — With a big BUT!
If you can make it full time in the industry, real estate is a Top 5 career path. I’ve been most blessed in my decades long career. I enjoy people. Working through challenging real estate (and sometimes personal) situations is vastly rewarding for me.
With a few brief exceptions, my wife Karen only worked inside the home, raising our kids. I began my real estate career all over in 1994 when we relocated from California, which was a time of great growth here in the valley – my timing was good.
You have to be able to save up for that inevitable rainy day (or year). Commission sales are not for most people but believe me there were years I envied those with a corporate paycheck, but then I came back to my senses.
The big IF, however, just got iffier with the Sitzer verdict.
Going forward, buyer’s agents must find and convince buyers to sign a representation contract with an unseasoned agent new to the industry. That agreement must stipulate how much that buyer will pay their agent. And if the seller does not agree to provide a concession to the buyer to cover that fee, as is happening in most cases still, the buyer must “write a check” to that agent’s company. This is the seismic shift of Sitzer.
The situation with sellers remains the same. Sellers will still pay their agent a fee agreed upon by seller and seller’s agent, but without a buyer’s agents’ fee, and it will no longer be published that the seller will pay a sales commission to a buyer’s agent through the Multiple Listing Service (MLS).
This could result in substantial savings for a seller, but that will depend on the current market at that time. If it’s a buyer’s market, (see this week’s chart) like we’re entering in, not much will change. But when it turns into a fierce seller’s market, sellers may very well benefit from Sitzer.
To sum up someone’s future real estate career success possibility:
It’s who you are
It’s who you know
It’s who you’re connected with
By the way, the Bodeen Team represents sellers AND buyers. It’s who we are and what we enjoy doing!