The Real Deal
October, 2003

The number of licensed real estate brokers climbed 5.4 percent between January 2002 and the end of August.

“We’re seeing the most diversified group of people with the most diversified backgrounds coming into the industry today,” said Esther Muller, founder and president of the Academy for Continuing Education, which offers courses in real estate. “Some people now have to wait three weeks just to take the licensing exam.”

“It’s still true that people are coming from the Internet and Wall Street,”
said Mitchell Lawrence, director for Broker Training and Marketing at Corcoran, which recently expanded its offices and brought in 68 new
agents this summer. “But we’re seeing a lot of people from law,
advertising, entertainment, public relations and everywhere else. It’s
really running the gamut.” Occasionally some MDs have joined the ranks.

“Some of it was due to the economy,” said Lawrence. “Some people wanted to get out of the rat race. They jumped out of the frying pan and into the fire, but they’ll find that out.”

While still coming to real estate as a second, rather than a first career,
the new recruits are younger, well educated, and more likely to be male
than in the past.

As the rental market lags, some younger brokers are eschewing starting out in rentals, a common practice, and heading right into sales.

“The average age has definitely gone down,” said Lawrence, who said he is noticing a lot more young brokers in the profession. “It’s skewing younger.”

Still, real estate is a second career for most. “Young graduates from college generally cannot do it,” said Jacky Teplitsky, a vice president at Corcoran.
“It takes six months to earn any money” and recent graduates usually have little savings.

Andrew Heiberger, President of Citi Habitats, said he has seen a greater number of well-educated people coming into the industry.

“One of the things that has happened has been the ability to hire tremendous talent,” he said.

“It’s common to hire people with law degrees and PhDs. Bankers are coming in, and CPAs.” Many were prior customers who saw the potential money in real estate. “They wrote checks for $30,000 or $40,000, and they would get to talking with brokers. ‘How much of this do you get to keep?’ Then they started doing the numbers.”

In a profession where a majority of the practitioners are women, many of the new agents are men.

“In some of my classes, men are the majority now,” said Lawrence. “It’s getting to be about half and half. A decade ago, it was maybe even less
than one-third men.”

Lawrence said there might be several factors at play in bringing about the change. “You can really make money here,” he said. As more men enter the field, “the perception becomes different. The economy spilled out a lot of guys, too. In real estate, they can start at any time. And they don’t have to start in the mailroom.”

Teplitsky said there are more men because a career in real estate is now seen as a ‘primary breadwinner’ role. “Women traditionally worked in real estate as a part-time job, and somebody else had to bring home the bigger bucks.” Now, the bigger bucks are in real estate.

Younger brokers who traditionally started in rentals, partly because the money is more immediate, are now beginning in sales. “The rental market
has not been as great,” said Teplitsky. “Even though you make a sale today and don’t close for three months, young agents know there is money to be made there.”

Heiberger, who heads the largest Manhattan rental company, acknowledged the trend. But he also thinks “it cuts both ways,” and that people are still coming in as rental brokers for the immediate income.

The landscape has also changed for broker’s assistants, Teplitsky
said. Compared to three years ago, when she interviewed to hire for
an assistant, “today’s candidates are of a much higher educational and socioeconomic level.”

Whether the new influx of talent with outlast the next economic upturn is anybody’s guess. “It’s a good question,” said Lawrence. Heiberger thinks
“it’s going to get more challenging to get and keep good talent if the
economy picks up.”

One thing that remains constant, however, are the daunting odds facing
new agents, regardless of the economic climate. New agents must not only
be self-starters, but also be able to go their first six months or a year without a paycheck.

Estimates of the attrition rate vary. “I think we probably keep between 60 and 70 percent,” said Douglas Elliman’s director of broker development, Kay Brover. That figure includes people who leave of their own accord and people who are asked to leave because they don’t meet certain productivity levels. Heiberger said the attrition rate in the first year “has got to be 50 percent.
If you make if through the first year, the attrition probably goes to 25 percent,” he said.

Lawrence said the idea of one in four agents staying in the profession “doesn’t seem off the mark.”

Misconceptions about the industry abound on the part of new agents,
Muller said. “The one general rule is that most people are under some
sort of illusion about the industry,” she said. “Some people only see the dollar sign,” said Teplitsky.

“You have to be on call like a doctor,” said Muller. “You have to be a psychologist. You have to be an entrepreneur, with a close eye for detail. Buying a home is a personal emotional decision, mixed with the financial.”