By Mike Bodeen · 28 October 2024
About 6 years ago, Jonathan and I were Mentor Leaders with our company, HomeSmart. HomeSmart was growing significantly with a number of new licensees joining the firm, as they were with other companies. Newbies would go through the real estate licensing process and they would get matched with one of our mentor teams who would help them learn the trade. A worthy concept.
Shortly after the program initiated, Jonathan and I were teamed up with a young man having newly arrived in Phoenix/Scottsdale from Southern California. Leon was energetic, conscientious, charismatic, smart, and willing to do whatever it took to become a success in real estate. He was a very confident young man, but not in an arrogant way. He had all the right stuff and a good attitude. But Leon failed, at least in the first few years of his entry into real estate. It’s certainly possible that could have changed, but “the odds” were against him to begin with.
“January 31st 2025, in my opinion, will see the largest drop in Realtor numbers ever, as that is when our pricey annual Realtor dues come due!”
So, if Leon had all the “right stuff,” why didn’t he make it?
Leon didn’t make it because “the odds” were against him.
First off, according to the Consumer Federation of America (CFA), in 2022, 49% of agents sold one or no homes. Per CFA, 70% of agents that same year sold only 5 homes or less. In 2024, which will be a record low sales year in Phoenix and the nation, those numbers will be shockingly less. From October of 2023 to this year, Phoenix metro has sold 70,000 homes. Two years ago, October of 2022, 97,000 homes were sold during the previous year. The year before that was 113,000.
Back to Leon. Leon lacked one of the most important qualifications: Contacts. aka; Sphere of influence. Leon knew virtually no one in Arizona and was starting his sphere of influence from the ground up. Leon understood this, but he would not be deterred. To help make temporary ends meet, he took a job as an Uber Driver. Everyone who got into his car would hear about his real estate venture and would get one of his business cards. We also had Leon handling open houses on our listings, or other HomeSmart listings, which was another great way to meet people who might have an interest in real estate.
Another strike against Leon was that he was single with no significant other to help accommodate his living expenses in the years it would take to get started in the industry. An important part of a Realtor’s success is the need to be joined to one who could be that backer in the early stages of their career.
The normal drop in sales due to high mortgage rates and high prices has impacted the industry already with tens of thousands of agents leaving the industry. January 31st 2025, in my opinion, will see the largest drop in Realtor numbers ever, as that is when our pricey annual Realtor dues come due!
And now for the knock-out blow; everything written thus far does not include the latest Realtor killer alluded to in today’s title, the Sitzer-Burnett vs NAR (et al) lawsuit which changed the manner of compensation for buyer’s agents. Time and space cannot coax me into once again going over that groundbreaking event – many of our past Snapshots have well covered that.
We’ll continue with this question next week.