Huge Influx of Rookie Agents – Hire With Caution
With strong growth in real estate values over the recent years comes quite a bit of hype in the real estate industry. We’ve seen a flurry of new real estate licensees getting into the business believing they can make an easy buck, and I applaud anybody with the entrepreneurial spirt to start any sort of new business venture. Although, buyers and sellers should really be cautious with rookie and part time agents. When we have been on the other side of a transaction with some of these newbies; we have seen some major mistakes, sloppy work, unresponsiveness, and less then stellar handling for their client’s best interest. I don’t want to generalize all these newer agents because with proper guidance some of these agents can be great and will become rockstars. However, the truth is a large percentage will not get the supervision they need or won’t have the ambition to stay in the field after a few hurdles.
Here are some interesting stats. Currently we have 4,586 agents in our MLS district. This is more than double what we had in 2009 (when we got licensed). Of that, only 24% (1,094) have sold 10 or more homes this year. Those top 24% of the agents make up 80% of the sales volume in the South Central Wisconsin MLS. That means the bottom 76% of agents only do 20% of the transactions in the district. So 3 out of 4 licensees probably don’t have a ton of experience navigating the current market.
Kinsey on her own, ranks in the top 6%. Keith on his own ranks in the top 11%. While combined as a team they would rank at the top 2.1%. I should note, that many of the big name agents have team members transactions recorded under the big name agent to prop up their own numbers (we have not done that).
If you are agent shopping, I’m not saying that you should avoid agents doing less than 10 sales a year- I’m saying you should be cautious, interview, and know what you are getting from an agent. Some of these agents may actually have more time for you and provide you better service than some of the really big names who are spread thin time-wise. …but make sure they know what they are doing and make sure they have a good relationship with their broker such that they can consult them any time of the day or week. We have a couple lower volume agents at our brokerage that are outstanding, they just choose not to do real estate full time. They are also great at asking questions when needed to make sure they are confident and competent in serving their clients.
The bottom line is the 80/2o rule holds true in real estate. There’s a small percentage of agents doing the bulk of the transactions. Be careful who you are putting your trust in for your biggest asset. Ask questions to determine a level of knowledge and experience before hiring an agent. If you are choosing an agent who does fewer sales or is newer, that’s totally fine, just make sure they have the backing and leadership from somebody with more experience and knowledge.