To all the agents in the house,
A few weeks ago I asked in this newsletter if there are too many real estate agents in the U.S. and what could be done.
I got 10 almost identical responses, all to the effect of: "Yes, and it's a significant detriment to the profession."
"I sometimes meet people who decide to become a Realtor as a quick and easy way to make money," said one Ohio agent. "Most brokerages don't have adequate training in place for new agents. Many learn by trial and error, and thus one of the reasons the public doesn't think of us as professional."
"The client potentially has no idea if the agent they are getting is really a full-time gas attendant who is moonlighting on the weekends in real estate," bemoaned a Houston-area agent. "It leads to the full-time professionals getting stuck with the brunt of the weight."
One agent complained of selling homes in Miami and dealing with amateurs who, "Show up in flip-flops and smell of suntan lotion with wet hair."
Conversely, the next agent who argues to me, "I think it's great the National Association of Realtors counts 1.5 million members, and that there are 2 million U.S. residents who call themselves agents," will be the first agent.
Those who study real estate have also taken notice. In a paper published last year, academics Sonia Gilbukh and Paul Goldsmith-Pinkham argued that the problem of too many agents is so bad that during housing downturns an inexperienced agent is significantly less likely to broker a sale, causing an increase in a client's chance of foreclosure.
Now, to the "what can be done?" part.
Gilbukh, a real estate professor at Baruch College (who will appear on my upcoming Houses In Motion podcast that's part of the HousingWire Daily feed), points to a two-year apprentice program, partly because it will deter agents from joining the profession simply because the housing market is cooking.
Some real estate professionals floated this idea as well.
"It literally takes 10-15 times more education to cut hair than it does to help someone sell their most valuable asset," said a Las Vegas-based broker. "I would love to see agents be required to have an associates degree or go through a two-year apprenticeship."
One question about a two-year apprenticeship is how it would compare with the apprentice program that home appraisers endure. I say "endure" because appraisers like Jonathan Miller of Miller Samuel cite the program as not leading appraisers on a promising career path, and, in fact, discouraging them from giving home valuation a shot. Indeed, the appraisal sector arguably has the opposite problem - too few professionals.
One alternative, perhaps, is a trade school requirement.
Here's another idea. Make NAR membership more like, for example, the Screen Actors' Guild where you must hit professional benchmarks before becoming a dues-paying member.
Agents, you've made clear that too many of you are a problem. I'm curious to hear your solutions. Please email me anonymously at mblake@housingwire.com.
Sincerely,
Matthew Blake
Senior Real Estate Reporter
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