When Todd Murphy started his non-commission-based brokerage firm in Birmingham, Ala., in early 2007, business was good. He quickly rose as the sixth-ranked listing agent in the metro area and was making a good living on his fees. But by November of that year, he realized the business wasn’t going to make him the kind of money he would like to live on.
"There were a lot of people in the real estate industry and maybe I wasn’t bright enough to make it through some of the tougher times," Murphy says. Despite having spent 12 years in the real estate industry working in everything from mortgage lending to title insurance to homebuilding, he decided to get out of the business late in 2008 and has spent 2009 as an insurance agent for State Farm Insurance.
"Honestly, I don’t miss it one bit," Murphy says of the real estate industry. "I love the relationship I have with my clients here. I love the loyalty."
Murphy is just one of thousands of Realtors who have let their licenses expire this year. According to National Association of Realtors statistics, there are 1.12 million Realtors in the country as of March 31, down from 1.34 million in 2007 and a peak of 1.36 million in 2006.
Iverson Moore, a spokesman for NAR, says the biggest losses in Realtor membership have been in states where subprime problems hit the hardest — like California, Nevada, Arizona and Florida (see Realtor membership statistics).
Murphy says it was a lack of loyalty from his clients that finally put him over the edge. Realtors, he said, work so hard on deals that it’s hard when a client bails on them at the last minute or fails to come back after a successful transaction.
Murphy was working on a particularly high-profile deal for an athletics coach at the University of Alabama and was just days from closing when the client reneged on the offer, causing him to lose out on what would have been a $22,000 commission, he recalled.
"That just capped it off for me — that was the last straw," he said. "I’ve always thought I’d like to work in a business that provides something people will always need, and I have that here in insurance."
Murphy says he still talks to his former partner in the real estate business, and while he’s "holding his own," he’d like to be doing a little better. Murphy also likes that he is still somewhat involved in real estate through selling homeowner’s insurance as well as making loans through State Farm Bank.
"I’ll stay in insurance even when the (real estate) market comes back," Murphy says. "I’m doing what I’ve always wanted to do now." …CONTINUED