In 2013, there were 1 million + agents + 5.5 million houses sold nationally. In 2020, there are now 1.4 million agents and 1.1 million houses sold. This is equivalent to adding one new agent per house sold.
Rob Hahn of Notorious ROB made a point on his blog last year that only 3,000 teams are needed to sell 6 million houses. Raising the training standards and requirements will thin the herd. The challenge is the current model makes money by recruiting more new agents to brokers, but the good news is when the quality of Agents is standard, it means more business for the agents that are left. We’ll see a higher level of standards with a better quality of education and more of it. The focus shifts from quantity of agents to quality.
Press play to listen to the podcast episode:
…or watch the video below…
Or read on to learn more…
What’s driving the industry?
It appears that the brokers and associations are the ones creating this rhetoric, as they are the ones benefiting (fees and expansion of government) from the record number of agents. While a cumbersome home selling process gets neglected and goes unchecked for quality, causing home sales not to rise. The existing practitioners are the ones losing by the industry’s motivation to continue to keep the licensing standards and fees low to continue to bring on agents at a rapid pace.
The industry and its brokers have built a business based on agent count as that’s how they make their money, but with no plan to stop the growth in licensing. A few years ago, real estate analyst Stefan Swanepoel put together the Danger Report which is a study of dangers, unpredictable events, and game-changers in the real estate market. This report helped the National Association of REALTORS® (NAR) identify opportunities, trends, and risks, yet it appears the industry has shown its true colors by not taking action against its clear conclusions as the industry continues to bring on more new agents. Those conclusions were published but nothing came of it. With the utmost certainty, Stefan asserted the rising population would ruin the reputation of the brand and agents. The industry promoted raising the bar but instead filled the bar.
How do we solve the problem?
How do we solve the problem of a growing number of agents getting licensed with little to no accountability for the quality and training of these agents? We believe there should be a training program to help get people up and running, such as a 1-year apprenticeship program. This would help solve the problem of people getting licensed because of the commitment to a year-long structured program.
In Jeff Sibbach and Phil Sexton’s latest podcast, they polled the live audience about what such an apprenticeship program should look like to achieve a level of service equivalent to what they’re going to get paid. We should be training people on how to get GREAT. But unfortunately, the training doesn’t exist. Some of their feedback included perimeters such as:
- Setting the expectation of 12 transactions in 12 months (in year one), with an increase to 18 transactions in year 2.
- If an agent falls below ~5 sales per year (as an example) would require 30-50 class hours to improve in the areas the agent needs the most help with, Fewer transactions = more continuing education.
- Requiring a set amount of previews so agents not only know houses for buyers and sellers but to gain valuable neighborhood expertise.
- Shadowing an experienced, senior agent (such as a senior partner program).
We, Elite Agents, need to be on the same page so that we have one unified voice to get issues such as this in front of NAR. Something needs to change, which is why we have the National Association of Real Estate Teams. We want change, but we need to band together.