IS NOW THE TIME TO GET INTO REAL ESTATE SALES?
Aspiring real estate salespeople tend
to be a bit like investors chasing
Which raises this question: Could it actually make
sense to get into real estate sales in 2007 (when the housing market
is nearing a low) so you’re ready to ride the next up cycle? In
other words, does it make sense to get
Existing Home Sales Expected to Flatten Out in 2007
To answer that question, first let’s take a look at where the US housing market stands.
Sales of existing homes will be essentially stagnant in the intermediate term, according to National Association of Realtors projections. Sales of 6.48 million existing homes in 2006 will decline slightly to 6.44 million in 2007 and rise to 6.64 million in 2008, the trade group says. These predictions come on the heels of a precipitous drop of 8.4 percent in sales of existing homes from 2005 to 2006.
Although the market might have bottomed out, downside risks still exist. For example, the subprime mortgage business is in crisis, after lenders made too many loans to homeowners who are now unable to make rising payments. If foreclosed properties flood the market, the downward pressure on prices could make it difficult for real estate agents to close deals, as sellers resist offers that reflect reduced market values.
The Job Is Tougher Than It Was a Few Years Ago
Many of the nation’s real estate salespeople have entered the occupation over the past several years, so this is their first experience with a market where houses don’t necessarily sell themselves. To be sure, things were simpler for real estate agents in the heady early 2000s.
Back then, “if you were lucky enough to get listings, all you had to do was get out of the way,” says Mike Silvas, owner of Morgan Lane, an 11-office real estate brokerage in Northern California. “In a challenging market, you’ve got to have the business skills and apply them consistently.”
Esther Muller, a New York City real estate broker, also emphasizes the need for superior business skills. “I think that if you are a true entrepreneur and extremely professional, and you have a great sphere of influence and a good business background, it is a perfect time [to enter real estate sales],” she says. “The challenge in New York is that there are 66,000 agents here.”
Rocky Market Requires Greater Skill Set to Succeed
The current environment raises the bar on skills for real estate agents.
“A lot of the new people in the market don’t know how to sell in this market cycle,” says Richard Gollis, a principle with the Concord Group, a California real estate consulting firm. “This market requires a better understanding of how buyers and sellers relate, and that’s where experience comes in.”
What kind of business skills are Silvas, Muller and
Gollis referring to?
“You can develop a niche: a certain type of
property or a certain kind of buyer or seller,” says Blanche Evans,
editor of Realty Times and author of Bubbles, Booms
and Busts. “Speaking Spanish is a great advantage in
some markets. Or if you play golf, you could specialize in golf-course