Moving on: Life after real estate
Market, other factors lead some Realtors to new careers
By Maureen Wilkey, Tuesday, April 21, 2009.
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
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Submitted by Larry Whited Sr. on April 21, 2009 - 1:38pm.
After 36 years as a broker I can almost guarantee that agents will flow back into the real estate business when it recovers. Brokers with empty desks and physical office overhead will continue to hire anyone who can pass the exam.
The problem is we have a low barrier to entry and a seductive concept that you can make $22,000 on one sale, if it goes through.
When an agent acts like they hit the lottery on one commission check you know something is out of balance.
The only thing that will stop the flow of new agents is pricing. If commission continues to go down, fewer people will think they can get rich with a new real estate license.
Larry A. Whited, Sr., CRB, CRS, GRI
President & Founder
www.maxUnet.com & www.WebMLS.net
A Virtual Real Estate Franchise System
** Virtual Is the Future **
P.O. Box 757
West Chester Ohio 45071
Direct - (513) 543-2727 Fax - (513) 297-7497
Submitted by John Rakoci on April 21, 2009 - 2:47pm.
The numbers do not reflect much of a drop, no where near what is needed. Brokers will take any warm body as they have zero cost in numbers. Requirements to get a license in most states are nearly non-existant. Business can be started for under $1000. There barriers are too low. High numbers of agents dilute the income of the full time agents that stay current on law and market changes. If numbers were cut by 30% the only change would be a better chance of all clients to get what they deserve.
Submitted by Bill Fooks on April 21, 2009 - 3:58pm.
Bill Fooks
TFT realty Marketing Service
Warwick, RI http://www.fooksteam.com
Warm bodies somtimes work. We were all one once. Hard to believe! This is a business that has a low cost to launch, but a high cost to succeed. If you don't want to upgrade yourself in the good times, this time it really hurts.
Good luck and good riddence to those warm bodies, regardless of the number of years in the business. I am glad that "time in" doesn't count in our business. Hard work and continuing education, ( especially on your own with regards to real estate) is the epicenter to success.
Submitted by Roberta Baldwin on April 22, 2009 - 11:24am.
Client loyalty is paramount in agents' minds, no matter what the economic climate. Without it, we die. However, the example the writer gives -- that one of his clients pulled out of a deal just days before closing -- probably wasn't the best. We can't make people buy homes or stick in a deal when they're not happy. If it's not the right time, then better to support them through thick and thin. The kind of loyalty that makes the most difference is the coming back kind, the remembering kind. Without that, the line out the licensed-agent door right now would be far longer. Hopefully, though, in this difficult market, those we've successfully worked with will remember us and use us again because we've got the information, knowledge and support systems they need more than ever. Never for a moment do I doubt, though, that we need to keep reminding our clients to exercise that loyalty!
--Roberta Baldwin
Visit me at www.SuburbanDigs.typepad.com