Glenn Dorfman, the former chief operating officer and chief lobbyist for our Minnesota Realtors Association, defined Realtor professionalism back in 2007 and caused quite a stir.
He wrote, "Brokers must reduce the number of ‘unproductive agents’ (X transactions per year) in order to stop the dilution of productive, professional agent’s income. If this does not happen, Realtors should stop the blabber about ‘professionalism.’
"My definition of a ‘professional’ in real estate is someone who counsels consumers in the buying and selling of real estate and does at least 10 transactions per year.
"(Real estate sales is an experiential-based business: The more business one does over time, the more proficient (and) competent one is — consumers/customers make this determination based upon the depth and breadth of the services provided by the Realtor, not based upon the symbolic Realtor ‘R.’)"
Looking back on it, I think Dorfman had some excellent points. Many agents did not make their 10 transactions last year, and I am not sure that 10 is the magic number. But I do know that experience matters and that those who do not sell real estate tend to easily lose touch with what the market is like because it is always changing.
We learn something new from each transaction, and I don’t know any better way to learn than by doing. No two transactions are the same, and each one presents a learning opportunity.
Being in the field and selling real estate helps us stay up to date, and that helps our clients. Missing a trend in mortgage financing or in marketing homes can cost us and our clients money.
"Real estate sales is an experiential-based business." The very best agents have one thing in common, and it isn’t that they know how to use an iPad to give a listing presentation.
Anyone, or almost anyone, can learn to use an iPad or a smartphone. There is really only one way to become an experienced real estate agent, and that is to sell real estate. There is no substitute.
The last time I looked at data on how many agents there are in Minnesota, I noticed that the local agent population has been slowly decreasing from its peak of more than 25,400 in 2006. There are still far too many agents, and there isn’t any way that each of us can have at least 10 transactions a year.
Consumers don’t really understand us or what we do. People rarely ask how much experience I have or how many homes I have sold. They may ask me how many years I have been in the business, and some will ask me how many listings I have.
Honestly, they should have been asking me how many listings I sold. I used to sell some of my listings before the sign even went up, leaving me with few listings at any given time.
New agents all strive to get that all-important first listing. Sometimes it comes from friends or family, and sometimes it comes from total strangers. There is always some business for the totally inexperienced agent, which is a good thing because we need new agents who will become tomorrow’s experienced agents.
If it were profitable for brokerages to get rid of agents who have fewer than 10 transactions a year, they would do it in a heartbeat. Brokerages make money only when agents sell real estate, and since agents are independent contractors who pay their own bills, it doesn’t cost brokerages much of anything to have unproductive agents.
It really is up to consumers to do some checking before engaging an agent. Having experience selling homes, or yearly production rates of 10 or more transactions, does not qualify as higher standards for agents.
Teresa Boardman is a broker in St. Paul, Minn., and founder of the St. Paul Real Estate blog.
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