experts: real estate column Thursday, April 15, 1999

THE "HALF-LIFE OF REALTORS"

Unlike Bill Clinton, I intend to gloat. For sometime I have been preaching the "half-life of Realtors" theory, that despite markets, the number of people getting into our business will continue to decline for the foreseeable future.

By Marty Douglas

Unlike Bill Clinton, I intend to gloat. For sometime I have been preaching the "half-life of Realtors" theory, that despite markets, the number of people getting into our business will continue to decline for the foreseeable future. Now I'm a little shortsighted so the foreseeable future isn't that far out, but since the average life of a new company in our business seems to match the drop out rate of new licensees in the first three years, I figure if you disagree with me, there's a reasonable chance that either you are I won't be around when I'm right and you're wrong. Again.

But don't take my word for it. And don't try to apply the old, "It's different here." defense. As Floyd Wickman said, "What, you don't have people where you are?" As recently as February, 1999, Inman News (get online at inman.com - it's free!) ran this headline, "Agents not flooding the market." Now remember what you've heard about the real estate market in the US of A. It makes Calgary and Toronto brokers seem like poor cousins. Inman says "By any measure but one, the real estate market is sizzling." Guess which one. In California, despite a three year recovery, the number of licensees is less than half the total of 1990 where one in every seventy-five had a license. "Rewards cannot compete with other professions that are more certain and promise benefits."

In Canada, where obtaining a real estate license is generally more challenging than in the US, where there remain some markets at low activity levels, the incentives to entry are even more drab. The existing licensee population is aging and retiring, the cost of doing business is increasing and the theme song of the Canadian real estate industry might just be that great Eagles hit "Whatcha gonna do when I'm gone, whatcha gonna do?"

One of the problems with the real estate sales profession may well be the absence of the 'nurturing' agent or broker. In the eat what you kill environment of the independent contractor, training and support are whatever you can get on your own. I was reminded of this by a plaintive little want ad in our Board's daily hot sheet - "FOR SALE: Listing, buying and selling tapes. Never used. $50." Maybe if they had been used, the salesperson wouldn't be trying to raise cash. Maybe if the salesperson hadn't been determined to get all of the commission, they would have tried a career with another broker, one with training or a mentoring program.

In BC, we are further challenged by legislation that requires salespersons to have only one employer - their agent or broker. Until a salesperson attains two years of experience and an agent's(broker's) license, they may not earn income - pensions and investments exempted - from other sources. In Greater Vancouver, illegal employment is more likely to escape notice than in smaller centres, and so unless you have the misfortune of waiting on your broker's table or servicing their car (and he or she knows what you look like), the part time job explains why the drop out rate isn't even higher.

When a licensee looks ahead in a good market, the reality of the increased cost of doing business is frequently blurred by the rosy glow cast by the selective lenses we wear in bright light. One more commission earned will cover the increases in fees, automobile operations, income and sales taxes, inflation, and the newest "secret of my success" program being sold by yet another ex-Realtor on the speaker circuit.

Looking southward, where Clinton's 'intern'al problems have resolved in time for him to recreate his presidential legacy, a proposal to tax trade association investment income might attract attention north of the 49th. And those great maps available at no charge because the US Military drew them? Clinton's team is suggesting a $15 per mortgage transaction fee to help update the inventory.

Governments seeking revenue is an international threat to our health.

We need to recreate our industry to provide those "more certain" rewards and benefits. Fewer numbers will ensure that larger organizations lead the way, staffed by independent contractors who will purchase benefits within the umbrella and provide their own security the old fashioned way - by performance.




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Recent Articles by this columnist:

Surviving in a slower market
Wednesday, December 19, 2012


The downside of teams
Saturday, October 02, 2010


Thank you, FINTRAC
Wednesday, November 19, 2008


A Snapshot of Alberta
Thursday, January 03, 2008


No song and dance for weighty housing issues
Monday, October 29, 2007


All articles by Marty Douglas

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