People find it difficult to believe that when I started in this business in the 1970s, I sold homes without inspecting them. Never saw them. I owned a small real estate company and was responsible for counseling buyers, writing and negotiating the transactions. My agents tracked down the deals. Almost every transaction involved owner financing. To work like that today would be unthinkable and ripe with liability.
I had previously been an escrow officer and before that a title searcher at a title company. I thought I knew everything about real estate. I was young and cocky. That's why I took the California real estate broker's exam 5 times. I didn't realize back then that I needed to learn how to pass the exam. Passing the exam and selling real estate are two different things.
When readers from my About.com home buying site write to ask how they should get started in real estate, I tell them that starting out at a large brokerage is invaluable. Newly licensed real estate agents need to learn the basics from the ground up and align themselves with a mentor. Laws change constantly. The business is complex.
But there is also no substitute for experience. I learn something new every day, even after 30-some years in the business. Because when a person stops learning, it's time to change careers. I will never know it all in this business.
When I moved to Sacramento, I interviewed the major real estate brokers in town. I wanted to affiliate myself with the best. With the company that offered the best support, and provided superior technology and ongoing education and, as a result, I chose Lyon Real Estate -- a leader in the community since 1946.
Because I am a real estate broker and not just a real estate agent, I could work entirely by myself in California. I don't need to affiliate with a Sacramento real estate brokerage. But I choose to work at Lyon Real Estate because it supports me fully by offering the tools I need to do the best job possible for my clients. As an added bonus, I have the opportunity to work with some of the brightest and most experienced agents in town.
Experience means an agent can predict future problems and head them off at the pass before they can explode and blow up a transaction. It means contracts are written correctly, and one can pretty much figure out which direction negotiations will move and prepare.
Often, when I am about to go into contract with another Sacramento real estate agent, I may look up that agent's production in MLS. I want to know who I am working with. For example, August stats from Trendgraphix show we have 6,267 agents in Sacramento. Of those, 73% have sold 4 or fewer homes this year. 85% have sold 7 or fewer homes in 2009. This means, if I've done the math correctly, that only 15% of the agents in Sacramento have sold 1 or more homes a month this year.
The fact is the more transactions an agent completes, the more knowledge an agent accumulates, or you would hope. And some Sacramento home buyers know this. A first-time home buyer emailed me out of the blue yesterday. She said she wanted to be upfront by disclosing that she's interviewing several agents to help her buy a home. She asked me to send her my last 12 months of production and present inventory. I'd say that is a pretty smart buyer.
Some agents may feel uncomfortable disclosing what they may feel is personal information or be offended, but I didn't have any qualms letting her know that I have closed 33 transactions over the past 12 months -- about a 50/50 split between sellers and buyers -- and I presently have 31 listings, of which 5 are unsold or in negotiations. I don't close $40 million a year like a few agents in town, but I do all right. If you dig for it, all that information is available on my web site; it's not like it's private data.
When I look back over the years, my worst nightmare transactions involved unsupervised agents or agents without much experience. Experience teaches one how to manage client expectations while keeping a finger on the pulse of the real estate market, how to protect a client's interest and comply with the law, but most of all it prepares an agent for the unexpected. Because sure as the sun will come up tomorrow, I know that I'm likely to receive an offer from an agent who thinks she understands the business but has no real practical experience. And I will try to have compassion for that agent because I once stood in her shoes.
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Certified HAFA Specialist
My Sacramento Real Estate Listings
Elizabeth Weintraub is an author, home buying columnist for The New York Times-owned About.com, a Land Park resident, and a Land Park real estate agent who specializes in older, classic homes in Land Park, Curtis Park, Midtown and East Sacramento. Weintraub is also a Sacramento Short Sale agent who lists and successfully sells short sales throughout the four-county Sacramento area. Call Elizabeth Weintraub at 916.233.6759. Put 35 years of real estate experience to work for you. Broker-Associate at Lyon Real Estate. DRE License # 00697006.
The Short Sale Savior, by Elizabeth Weintraub, available at Amazon.com.
Lyon Real Estate is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan.
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The views expressed herein are Weintraub's personal views and do not reflect the views of Lyon Real Estate.
Disclaimer: If this post contains a listing, information is deemed reliable as of the date it was written. After that date, the listing may be sold, listed by another brokerage, canceled, pending or taken temporarily off the market, and the price could change without notice. It could blow up, explode or vanish. To find out the present status of any listing, please go to elizabethweintraub.com.
Elizabeth - I often check the MLS when I receive an offer so I know who I'm dealing with. Like you said, if they don't have much experience, having that information helps me craft how to speak to the agent with a counter, or any other terms. I try to be more instructor than negotiator in those instances for the benefit of the deal. It may cause me more work in the end, but at least I know the deal will get done. The "working together for mutual education's sake" is just a bonus!
Excellent post. I would say our stat's in Ann Arbor is very similiar. I bet it is in most area's. 20% of the agents doing 80 of the work. Too bad some sellers list with friends and it often doesn't work out.
I check stat's often through Broker Metrix which my Broker has available to look at.
Elizabeth - You go girl! I feel the same way about my production level. Although my numbers are down drastically from a few years ago, they are up from 2008. This is good.
I'm not a top producer either but then again, I've never wanted to be a top producer; I'm not willing to do what those people do in order to get those numbers. In my industry, the top producers I work with have absolutely no personal life or personality either for that matter. For them, it's all about the next sale and the next client and the next escrow, blah blah blah.
I have never wanted that kind of life so I'm ok with what I'm doing and I just try and do the best I can and still enjoy my life.
I have seen stats as high as 93% of the business being done by 7% of the agents. I checked out a local agency that has an emphasis on recruiting new agents for downstream income. Over 50% of the agents had not done any transactions in the last 12 months. I don't believe that experience alone is all that is necessary for a successful transaction, but when it is 10 times easier to become a Realtor than becoming a hairdresser, we have a fundamental problem in how this business is consituted at the entry level.
Thats because of the countless agents who got their licensee because they thought we all made easy money. The agents that take this job seriously as a full time job do make sales. Good post.
Hi Christianne: I try to help out newer agents, too. But sometimes they don't want help.
Hi Missy: We can also check the Department of Real Estate to find how how long the agent has been licensed.
Hi Donne: In Sacramento, you are considered to be a top producer if you close one transaction a month. Unless you're selling mobile homes or something. So, when you say you aren't a top producer, you probably are. I think what you mean to say is you are not a mega star.
Elizabeth,
The first place for an informed buyer to go is the Active Rain Real Estate Network. It becomes pretty evident who's doing business, and who isn't. (And congrats on your feature!)
Mike in Tucson
I started my career at the small firm that I now own. And you're so right. I had a fabulous broker that taught me and helped me and was filled with the kind of stories you tell that make you really learn the lesson he was trying to teach with the story and now I use his methods to teach new agents myself. I can't imagine wanting to retire because I love what I do so much.
Buyers are as you stated usually very educated and savy these days. I don't really fit into the "top producer" category anymore. I spend too much of my time managing and overseeing an entire office full of them. I have agents with "niches" A new home agent, a REO agent, a first time buyer agent, a "town" (off water) agent, a golf community agent, a couple of marketing guru listing agents. I do from time to time get an email and decide to work with a buyer myself. Currently a retired Navy man and his wife and I just took to them the minute I met them.
The other stat I used to hear all the time was the average real estate agent only made less than $25k a year . . .
Mike - It can be hard to tell though sometimes when someone posts a lot of info becasue they have the time to do it because they are not selling real estate!! haha. Nonehtless AR is a consumers haven.
Interesting post, it is true that a few agents do most of the transactions. One point though, I don't think you need to work for a big brokerage to get good train and mentorship, sometimes the smaller brokerages are actually better. It all depends on the managing broker and the programs that are in place.
Elizabeth good post I was looking for a short sale or foreclosure opportunity for about 5 months and had to give up on the short. We may have already seen the bottom of home prices here in California. We hear for many more REOs coming but they will sell closer to market than not. Thanks for the informative post.
I have often heard of the 80/20 rule but if you dig more you can probably find that this might be an old rule. The same applies here in Ottawa, ON.
Wow, I am impressed about the stats of your inventory. Mind blowing.
Elizabeth great post, great numbers and great job. Your right when choosing a broker. I interviewed 6 large brokers then asked a friend in the business what he would do and he said I needed to be mentored and referred me to a small broker in town and it was a match made in heaven. Great post!
Depending on your area and specialty, a smaller brokerage may be just what an agent who is starting out needs, but overall, I believe most agents benefit by spending at least the first 2 years of their career at a larger brokerage. If for no other reason than the agent has access to more resources and staff because larger companies can most likely afford the overhead. I know if I had to do it over again, I would have gone to work for a larger brokerage instead of joining a smaller company. But that's not to say that smaller companies can't be exceptional as well.
They also say that the company that controls the listings in any given market, controls that market. In Sacramento County, according to Trendgraphix published in September, Lyon Real Estate has 581 listings. Our next 3 competitors in line each rank in the 300s. But Sacramento may be an isolated market as compared to others around the country.
Featured @ Club Chaos
Elizabeth how is a relatively new agent suppose to get more experience if buyers/sellers don't give them the chance? I'm going into my third year of real estate and while I don't have the numbers that you do, I work very hard for my clients. I keep up with training and solicit help from other more experienced agents. Fortunately, I work for a company that encourages that. I give every client my very best and you don't have to be in the business 30 years to do that.
Elizabeth - WOW! Maybe I should move to Sacramento now. Heck, based on that particular criteria, we would have a lot more than 15% top producers around here. LOL
Actually, I don't care what studies want to label me as because it has zero effect on how I treat my clients or how I will conduct myself. I learned a long time ago what my work ethic and style is and that is how I plan to continue to conduct myself and my business - regardless of what my numbers are.
Elizabeth, like you, unless I know a particular agent I check the MLS for their prior sales. Gives you a pretty good heads up for the transaction experience. I'm not saying they are not capable, but, I can help them and be a bit more thorough. I did work for a large brokerage initially, and set off on my own the first day I had met the broker experience time line. Never looked back...
Elizabeth - Great post! When I started, I chose a Century 21 broker because they offered incredible new agent training,ongoing support once an agent became licensed and the brand name value of the Century 21 name. Do I pay apremium? Yes. Is it worth it? Absolutely!!!
I am always amazed when a client choses to work with an inexperienced friend/family member who "keep a license, just in case..." You know the type of agent...they cause more problems for their clients than they can solve. Would anyone choose a surgeon who "just does it on the side".
Please don't get me wrong that a new agent doesn't deserve a chance. We were all new agents once, but the successful ones have continued to grow and learn and become an asset to their clients.
Hi Elizabeth ~ I too almost always check an agent's track record if I don't know them. I went through a spate of transactions with brand new agents. Very quickly it would become obvious that they were completely out of their element. Everybody is new at some point - we've all been there. It's really is best to acknowledge your limited experience rather than act as though you know it all when clearly much of this is new to you.
This post is a super summary of the value of experience - I love how you described it.
Liz
Elizabeth, I felt bad earlier this year when my broker told us that in 2008, over 40% of the agents in Waco/Mclennan county didn't close a single transaction. I am not setting the world on fire, but I closed 5. Hopefully these are agents who have a fulltime job or another source of income and do real estate on the side or something.
33 transactions in the last 12 months is most definitely doing "all right"!! Congratulations! :)
Nice post, Elizabeth. I am curious about what you thought about Wendy's post and problems with GC Services, and I'm also curious about how you get affiliated with about.com
Don't know how you had time to do 33 transactions and still buy a new couch! We must share some similar traits!
Elizabeth,
I am impressed with your numbers. I am curious to know how in the world you have time to keep up here in Active Rain. You must have great systems in place.
Elizabeth - I also track another agent's production in the MLS when I am involved in a transaction with them. And I also study the patterns that a listing agent seems to follow, if I am representing the buyer. I think any knowledge I can have on the outset is good!
Great post.. Glad I don't live in Sacramento any more, though I do miss the diversity. Considering the small town that I live in with 38,000 residents and nearly 1000 agents, Sacramento really doesn't have that many agents. Hope business is well.
wow tons of experience you have definately seen some big changes
I hear that DRE is going to toughen their licensing requirements, requiring annual renewals, credit checks, etc. That should thin out the crowd a bit.
Hi Melissa: Regarding Wendy's post, I did leave a comment there; although I suspect I'm in the minority on that issue. You'll have to go over there to see it. As for About.com, I just lucked out. I was in the right place at the right time. About.com is always looking for writers, and they pay very well. You should go to that site and see if there is a topic available that interests you. Scroll down to the bottom and click on "be a guide." But make sure you are passionate about that topic. I'm passionate about home buying and home selling.
I am very organized. That's how I do it. Remember, you're talking to the woman who gutted and remodeled her kitchen in 15 days. :)
To those of you who asked about how new agents are supposed to get clients when they don't have any experience, there are various ways to do that. First is to get guidance every step of the way and to ask a ton of questions. Second is to work your lead generation programs, hold open houses, contact friends and previous coworkers and ask for the business. Not every seller and buyer cares about hiring an agent with experience -- most will choose an agent based solely on whether they like the agent. Many people wrongly assume agents are all the same.
Elizabeth,
Congratulations on a gold star.
The statistical info is sometimes just staggering. We have a few times checking on agents the way you do, and the results may stun you. Recently my wife told me that one very prominent (noticeable on the Internet, and everywhere else agent actually did not do much business, I thought she did something wrong when checking, got to computer and yes, there is practically no sales, and very few listings.
Surprise, surprise
Very interesting numbers. Don't you wonder how an agent that closes less than 4 transactions in a year plans to support him/herself next year?
Wow! Those are HIGH numbers when compared to around here. If you are doing one deal a month, you are probably in the top 8-10%.
We have similar stats and In some cases agents have closed 1 or 2 deals this year and they have other sources of income . Real Estate is almost an after thought. Having an active experienced agent on the other side is invaluable.
I also like to know the experience level of the agent with whom I am working, that way if there is an issue I may be a little bit more understanding and perhaps may even use that opportunity to help the other agent.
Those stats don't surprise me. I have a feeling that the sales numbers for ActiveRain members might even be worse.
Startling statistics. What I do not understand is why so many hang in there! Our MLS is similar, yet agents keep paying their dues, and hanging on.
This statement is so true Liz:
When I look back over the years, my worst nightmare transactions involved unsupervised agents or agents without much experience.
Elizabeth~ I totally agree with you on several of your points!! I tell new agents to grab a hold of someone doing something right and ride their coat tails for at least a year! AND YES....there is a big difference between passing the RE exam and SELLING RE!!! All the best!!
Th e80-20 principle at it's best. . .amazingly enough, your numbers may reflect very closely the rest of the country
Elizabeth: I find working for a large company invaluable too. The training was exactly what brought me to my Brokerage (Long & Foster). As for the majority of agents in the market selling very few homes and causing nearly 100% of the problems in transactions (and I'm paraphrasing) you are right. I do the same thing as you...check the production of agents that I'm about to enter a transaction with.
Elizabeth - it is amazing that buyers and sellers don't ask questions of their agents such as how many transactions have you closed over the past year....all they need to do is a little research or simply ask the question. A buyer or seller should be looking for an experienced agent to help them with probably the biggest decision of their life.
By the way...I didn't know you started in escrow and title...I did too. 20 years in Sacramento. It is great experience for a real estate agent to have!
I'm a fairly new Texas agent and have run into what I call "discrimination" by experienced agents who "check" my track record. Hey guys I didn't get those designations after my name for nothing. I have experience. Just not in your market. I've been licensed in 3 states. My track record in Texas isn't stellar yet, but it will be. Remember that your MLS is not hte only one and my track record is spread on several.
I too check the statistics, our board has about 1000 agents and only about 100 have sold more than one per month. What is really scary is that only 29 have sold more than 2 per month.
I have been in the business for 3 years and went with a large brokerage because I needed training and lots of it, also need a nationwide network for referrals. 2009 is shaping up to be a good year, I have close 82 sides as of yesterday!
New agents that feel discriminated against just need to get out and get in front of sellers and get some listings so that you can find some buyers!
While a large office can give you great organized training and a plan, sometimes a small office will get you mentoring and one-on-one training.
Right you are, Elizabeth, about starting out with a large office. I should have taken advantage of even more of the training opportunities that Keller Williams offered than I did. But I also had some great mentors. I try to take it easy with the inexperienced agents I deal with, and like you, I often look up their stats on the MLS so I know what I'm up against!
Cheers,
Robin
Elizabeth, Naples Florida is ground zero for those agents you mentioned. Our area has so many retirees who think they will dabble in real estate between golf games. We have 85 golf course communities and then all the condos on the beach. It takes a lifetime to know the ins and outs of the communities. Even seasoned agents who come from other areas of the country look like deer in the headlights of an oncoming car! So much to learn. Whenever someone shows my listings, I ask them what they know about a community such as Pelican Bay and many times I have to take them to the beach and work with their buyers so they know what they are buying. Have not checked the MLS yet, but a good idea. Great post!!!
Those are some really interesting stats, actually quite alarming. I am amazed at how many nonproducing agents stay in the game.
Excellent Elizabeth...I cannot say I am surprised, however. Buyers and sellers can go a long way to ensure their own success by simply asking questions...and this is not an indictment of those newer in the business...simply share with your potential client that you have the relationship with your broker that allows you to always get an answer to a difficult question!