Day 8 of 30 – Robert Earl’s Prospective Agent Mentorship Guide – Digital Agent Show
In my 22 plus years of being in the real estate business, there have been 3 ideal times to get into real estate. The first was 2001 after the attacks on September 11th. The second was just after the housing bubble burst in 2008 so the 2010 time frame. The third is today, after the post pandemic – inventory limited era of 2020-2021.
This is the best time to get your real estate license and become an agent if you understand the dynamics of the market and how you can use it to your advantage as a new agent.
I have always felt that my best years in real estate were the period between 2007-2010. While other agents were complaining about how difficult the market was, I was cashing checks.
There were 3 main reasons why this was the case for me and why the same scenario can apply for agents getting into the business today.
When I got into real estate in 2001, my first open house that I held was on the first day that the US military started all out bombing in Afghanistan following the attacks on September 11th.
In 2001, everyone didn’t have a smartphone to follow along with the war on tiktok or twitter or social media like they do today.
Everyone was glued to their TV watching the action on CNN.
And because of this, no one showed up at my Open House.
Was I discouraged? You bet. But it was probably the best thing that ever happened to me.
I spent the next 12 to 18 months committed to learning the business and this is what I found out.
- The Average Agent is never taught how to sell real estate
- Real Estate Reports always talk about the average number of deals per agent vs. the number of deals I need.
- Market shifts come and go, but there are always buyers and sellers.
These same principles apply to the recession facing real estate market that we find ourselves in today.
The Average Agent is never taught how to sell real estate
When the market is good, like it was from 1995-2001 and from 2010-2020, a lot of people get their real estate license and get into the business.
There is even a joke in Florida, that when a state trooper pulls over a driver and asks to see the driver’s license, they are actually asking to see their real estate license, because so many people have one.
It may seem that way in your area. Everyone you know has had a real estate license or has one now.
And when the market is good, they even sell a few houses and make a few bucks because they stumble upon a buyer or seller in their everyday course of business.
But few of them learn how to consistently generate a steady course of income. They don’t have the training to create a pipeline of buyers and sellers and when the market gets difficult, like it did in 2020-2022, they get out of the business.
Even before the recent pandemic, it has been reported that 87% of new agents are out of the business in the first 5 years. The National Association of Realtors (NAR) membership number bears this out.
Because I got into the real estate business at a difficult time, right after our country was attacked and thrust into war, I had to learn how to find buyers and sellers in order to survive and feed my family.
Because I was willing to do what it took, including changing companies and spending late night hours studying, I not only survived, I thrived.
I developed the habits that helped me have my best years when the next downturn occurred.
Agents that get into the business today have this same opportunity.
Real Estate Reports always talk about the average number of deals per agent vs. the number of deals I need.
A 2019 NAR report showed that the median agent sold 6 homes per year. When you look at the numbers further, the average works out to be closer to 4 to 5 homes per year. And that was in a so-called UP market.
Part Time agents and hobbyist agents sell far fewer than this amount.
But notice the number is always stated in terms of median and average. Meaning they count the total number of sales and divide it by the total number of agents to come up with a number.
Meanwhile, some agents are selling hundreds of homes per year.
So which number is right? The number that I learned to focus on was the number of homes that I was selling each year.
I didn’t get into real estate to be average. And average wasn’t going to pay my bills and put my kids through college.
It is not about average, it is about me getting my unfair share of the market. As long as I work with enough buyers and sellers to sell the number of homes that allows me to hit my goals, I could care less what the market average was.
Did I have to work harder during the market shift to find ready, willing and able buyers and sellers? You bet I did.
But the habits I learned from 2001 to 2002 helped me in the following market shifts. The habits of building a potential client database. The habits of blocking off time everyday to reach out to this database. They all paid off.
Average doesn’t matter. (The same applies when prospective agents ask me, “How much money does the average agent make?” My answer is usually “not enough”, followed by, “how much do you want to make? That is the number that matters most.”)
The company that I am currently working with has doubled down on its training for agents over the past 24 months in preparation for the shifting market, and it is paying off for those above average agents that are applying what they are learning.
Even before I got into real estate in 2001, the principle of the Bell Curve has applied to real estate agent sales and income.
Webster dictionary defines a bell curve as: the symmetrical bell-shaped curve of a normal distribution : NORMAL CURVE
Along the hilly slopes of the bell curve, most values—the data points that track whatever is being measured—are clustered around the middle. The average value is also the most common value.
If the total number of sales per agent per year was plotted on a chart, it would look exactly like a bell curve, with a majority bunched in the middle and a number below and above the average line.
When you look at the above chart, you should ask yourself the following questions:
- What do I need to do to ensure that I am on the right side of this chart, in the above average and high performers section?
- Who do I need to associate with and affiliate with to learn what it takes to be in those sections?
- What habits do I need to develop to apply what I learn on a consistent basis?
It took me seeking out training, blocking out time to learn, including evenings and weekends, and switching companies to make sure I made it to the right side of the bell curve and stayed there.
Market shifts come and go, but there are always buyers and sellers.
A 2021 CNN report stated the following that backs up what I have been sharing with you so far:
More than 130,000 people became Realtors during the pandemic, according to the National Association of Realtors. NAR said its membership reached a record-high of more than 1.5 million members in May. Throughout last month, however, there were just a little more than 1.3 million homes for sale, down 27% compared to the same time last year.CNN report – June 23, 2021
We all know the marketplace has changed considerably since this report came out.
Interest rates have gone up. Inventory has increased. And homes continue to sell at higher rates that they did in years past.
But the report does a good job of presenting real estate facts that skew the perception of whether or not this is a good time to get a real estate license and become an agent.
The report highlights what I have been showing you in this article. Let me explain.
Notice how they talk about the new agents that just got into the business. Do you think all of them did what it took to become an above average agent?
It also talks about the total number of agents compared to the total number of homes for sale. I like to think of myself as a fairly compassionate and empathetic person.
But when it comes to numbers like this and running my business I become very capitalistic.
I don’t care if there are less homes for sale than there are total agents. That number only tells half the story, especially if I am selling 10 a month. Then other agents aren’t selling any, and that is fine by me. They have the same opportunity to be successful as I have, and for whatever reason have chosen not to. I would love to have the opportunity to help them. Especially the new ones getting into the business.
You see, they talk about the number of home sales being down from the previous year. And yes, this is true for that specific measurement.
But look at the bigger picture as shown in this chart of the number of home sales per year from 2005 – 2022 as reported and tracked by Statista.
2022 is down compared to 2021, yet the total number of sales are greater than any year from 2007 to 2020.
Let me translate that for you. There are more home sales occurring and more potential commissions available for agents today then there were in those previous years.
There are still buyers buying and sellers selling.
And if you are willing to do what it takes to learn how to find them and work with them as their agent, then it is one of the best times ever to get into real estate.
All of this depends on some key factors that you and only you can consider individually.
- Are you committed and willing to move quickly?
- Are you financially able to handle speed bumps that might pop up?
- Are you willing to get the mentorship and training to develop the habits required to succeed?
As I have stated before, real estate favors those that take swift action.
Your own personal financial situation may not allow you to invest in starting your real estate business at this time. If you have the goal to get your real estate license and become an agent then you need to start planning, budgeting, and watching your spending so that you can get into the business as soon as possible.
Mentorship and training are the ingredients that countless agents leave out of their recipes for success. They try to go it alone and end up becoming frustrated and blaming the bad real estate market on their lack of success.
All of that being said, I have never felt stronger about saying that now is one of the best times to ever get into the real estate market. I say this from personal experience and the facts and figures of the real estate market bear this out.