REAL STATE INDUSTRY - Is The RE Agent in Danger?

[Mulsanne]

Hello,

It's been a while since my last post, where I talked about Minimalism (This one: https://www.thefastlaneforum.com/co...ndset-and-why-some-people-get-it-wrong.67988/).
Which reminds me that I should produce more content on that thread, btw.

This thread was created for the Real Estate Investors, Real Estate Builders, anyone who knows anything about this market, anyone who wanna know something about this market, and all the Real Estate Agents to discuss about this last guy...

The REAL ESTATE AGENT

Well, happens that I'm one of these guys. I've been a RE Agent for one year, and I have my doubts if this industry is going to be my Fastlane project.

Lets know the story:
I've been a Real Estate Agente for 1 year now. Read the Millionaire Fastlane at the beggining of 2016, and since then I have some doubts about the industry I choose.
Sometimes I hear entrepreneurs talking about selling Real Estate as if it was a great Fastlane, but I have my doubts...

At this point, I'm having progress but I can't say I'm doing great, and most of it it's my fault. I can do best, even with my country going through a very serious crises (even our president was impeachmented). But this is not the serious point. What I'm really worried about is:

1- I fear that Real Estate Agents will become useless in some years. Internet it's making it so easy for people to get information and soon someone will find a way to make the realtor not needed. Maybe some kind of Uber for real state.

2- Market is CROWDED! On my way from my house to my office (witch takes me around 15 minutes), I counted 21 Realtor Offices! I think this is the most crowded market I've ever seen actually, witch I know violates the rule of NEED.

3 - I'm really lost at this point.I have plans for my next moves as a real estate agent, but I don't fell like going All In, because I fear that my service may become useless in some years (or months, who knows?).


What do you guys think?

I know it may sound like a "Is this Fastlane?" thread, but I think is a valid discussion, and I know that some of you are into RE.


Thank you! Hope you guys can contribute.

 

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[GuestUser450]

Internet it's making it so easy for people to get information and soon someone will find a way to make the realtor not needed. Maybe some kind of Uber for real state.

Yes and no. For the small to mid market SFR, yes. There's little information that can't be accessed without a license, so it comes down to service and if you're pinching pennies, you'll do the legwork.

For lux, MFR and commercial, no because the agent is a time-saver and time = money.

 

[EvanOkanagan]

Realtor here...

If you got into RE as a Realtor with the impression it'd be Fastlane you'd definitely be disappointed. It violates at least 4-- at the very least 3 of the commandments.

The only commandment it fulfills is need. And possibly scale--but that's only if you can position yourself into the luxury market as #1 which will take many years or $$$ marketing.

It's basically a glorified sales job.

Will Real Estate agents become obsolete?

A: If you're a "door-opener" then yes. Those lacking the skill and knowledge (likely 80% or more of the industry) will be knocked out of the game.

If you stay on top of educating yourself about the market, being the go-to guy to find a great investment, then you may last with all the technological advancements.

Examples: knowing what a house will rent for by just walking through, knowing improvements that would increase value in a home, knowing up and coming neighborhoods and key negotiation skills..

These are skills that Realtors will need to survive in the game.

 

[conquer]

95% of agents are broke/make pennies. There are a lot of agents however very few are hustlers and very few provide real value. As technology improves, the useless agents will be swept aside.

the top producers I know personally relied heavily on cold calling there first 5-6 years. One even cold calls to this day 11+ years in the game.

It's all about generating leads.

1 year in is still rookie status

 

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[Vigilante]

@Red

 

[EvanOkanagan]

95% of agents are broke/make pennies. There are a lot of agents however very few are hustlers and very few provide real value. As technology improves, the useless agents will be swept aside.

the top producers I know personally relied heavily on cold calling there first 5-6 years. One even cold calls to this day 11+ years in the game.

It's all about generating leads.

1 year in is still rookie status

I feel it depends largely on the group you join and what systems they have. The average agent at our team does 30+ deals per year (the average in my city is less than 10).

I did over 40 my very first year, and one of our newest partners broke 60 his first year and is set to break that number on his 2nd. When you factor in the average priced home we sell is 400-500k it's not too shabby.

BTW, the team I work for generates all leads for us, no cold calling.

 

[csalvato]

I just want to make sure I understand...

You think the real estate industry is dead because agents are going to be commoditized?

The real estate industry is WAY larger than just those who operate using the agent model. Real estate will never die as an industry or asset class.

 

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[Mulsanne]

Yes and no. For the small to mid market SFR, yes. There's little information that can't be accessed without a license, so it comes down to service and if you're pinching pennies, you'll do the legwork.

For lux, MFR and commercial, no because the agent is a time-saver and time = money.

Thank you! That make sense, I would want to save time if I was a millionaire.
But thinking about lux... the guy buying a lux property is obviously sucessfull and smart enough to be a millionaire. If so, he woundn't know how to spot good oportunities by himself, without the realtor?

Realtor here...

If you got into RE as a Realtor with the impression it'd be Fastlane you'd definitely be disappointed. It violates at least 4-- at the very least 3 of the commandments.

The only commandment it fulfills is need. And possibly scale--but that's only if you can position yourself into the luxury market as #1 which will take many years or $$$ marketing.

It's basically a glorified sales job.

Will Real Estate agents become obsolete?

A: If you're a "door-opener" then yes. Those lacking the skill and knowledge (likely 80% or more of the industry) will be knocked out of the game.

If you stay on top of educating yourself about the market, being the go-to guy to find a great investment, then you may last with all the technological advancements.

Examples: knowing what a house will rent for by just walking through, knowing improvements that would increase value in a home, knowing up and coming neighborhoods and key negotiation skills..

These are skills that Realtors will need to survive in the game.

I didn't got into RE expecting it would be a Fastlane. I just wanted to get into sales and learn as much as I could, by surounding myself with smarter and richer people. Working for comissions, not salary, was important to.

That's where I wanted to reach: You said "Survive in the game". So you think Real Estate Agent's fate it's just to survive, and not being able to scale and make it as a Fastlane?

Thak you for your post! It's good to know the opinion of someone that is actually in the market.

95% of agents are broke/make pennies. There are a lot of agents however very few are hustlers and very few provide real value. As technology improves, the useless agents will be swept aside.

the top producers I know personally relied heavily on cold calling there first 5-6 years. One even cold calls to this day 11+ years in the game.

It's all about generating leads.

1 year in is still rookie status

I agree with you, that 90%+ of agents are not providing value at all. But what about the the hustlers?
Market was very different 11 years ago. If your friend started today, and worked as much as he did for 11 years, you think he would be equally successful?

Thanks for your answer man!

 

[Mulsanne]

@Red

=)

I feel it depends largely on the group you join and what systems they have. The average agent at our team does 30+ deals per year (the average in my city is less than 10).

I did over 40 my very first year, and one of our newest partners broke 60 his first year and is set to break that number on his 2nd. When you factor in the average priced home we sell is 400-500k it's not too shabby.

BTW, the team I work for generates all leads for us, no cold calling.

That's a much better scenario than what we have here in my city. I would love to know more about the strategies that you and your team use to generate all those leads and close all this deals.

But do you think that 5 years from now, you will be able to keep this numbers?

I just want to make sure I understand...

You think the real estate industry is dead because agents are going to be commoditized?

The real estate industry is WAY larger than just those who operate using the agent model. Real estate will never die as an industry or asset class.

I think the agents are going to be commoditized, and they will be dead. The Agents, not the industry.

Of course the Real Estate industry will never die, but sure it will evolve, and maybe some pieces will not be necessary on the game anymore. I think producers and final consumers are constantly getting closer, and soon the Agent may become obsolete.

That was my point, sorry if it wasn't very clear.

What do you think about that?

 

[ddzc]

You definitely need to think outside of the box when it comes to RE and have a ton of connections with people in general from your city and it's surroundings. With all of the services and sites offered these days, no one needs a real estate agent to sell a property, especially in a hot city and market. I can pay $500 to have one of these companies to list my property on mls (realtor.ca) and I'll easily sell the property myself, saving 5% commission.

Most registered agents, maybe 95% make $0. You can earn great money, don't get me wrong. You can make 250-450K off a single sale if you're good and land a multi million dollar listing. Just ensure you plan things out intelligently before jumping in and pursuing such a career. Also, you can definitely make this fastlane with owning a brokerage...you're basically collecting checks every month from brokerage fees earned from your sales reps...doesn't get better than that from a fastlane perspective.

 

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[EvanOkanagan]

But do you think that 5 years from now, you will be able to keep this numbers?

I think that I would, I hope I don't have to.

In 5 years I plan on being on a beach somewhere with a margarita in hand

I became a Realtor knowing it wasn't my end game. What I get from being a Realtor with the brokerage I'm with is #1 amazing investment knowledge and #2 priotity access to deals and information.

My "fastlane" is intentional iteration through cashflow rental properties.

I see what I'm doing right now as the grind to fund my fastlane. I make good money and I reinvest most of it into more rentals and keep my expenses very low relative to my income.

 

[Mulsanne]

You definitely need to think outside of the box when it comes to RE and have a ton of connections with people in general from your city and it's surroundings. With all of the services and sites offered these days, no one needs a real estate agent to sell a property, especially in a hot city and market. I can pay $500 to have one of these companies to list my property on mls (realtor.ca) and I'll easily sell the property myself, saving 5% commission.

Most registered agents, maybe 95% make $0. You can earn great money, don't get me wrong. You can make 250-450K off a single sale if you're good and land a multi million dollar listing. Just ensure you plan things out intelligently before jumping in and pursuing such a career. Also, you can definitely make this fastlane with owning a brokerage...you're basically collecting checks every month from brokerage fees earned from your sales reps...doesn't get better than that from a fastlane perspective.

Thank you! I agree with most of your post. But thinking about owning a brokerage: Wouldn't the owner be as damaged as the agents?
Cause if I own a brokerage and my agents are not selling, I won't have much of a profit, since I have to keep the office working, pay for marketing, etc...
I see this at brokerage I work today, and the others brokerages in my city. Agents aren't selling, and brokerages owners are struggling to keep the doors open.

I think that I would, I hope I don't have to.

In 5 years I plan on being on a beach somewhere with a margarita in hand

I became a Realtor knowing it wasn't my end game. What I get from being a Realtor with the brokerage I'm with is #1 amazing investment knowledge and #2 priotity access to deals and information.

My "fastlane" is intentional iteration through cashflow rental properties.

I see what I'm doing right now as the grind to fund my fastlane. I make good money and I reinvest most of it into more rentals and keep my expenses very low relative to my income.

It seems like you and I have the same strategy. I became a Realtor to gain a lot of experience with sales, investment, to build a network e learn everything I could from successful people that I'm exposed to.

I save most of my money as well, to invest on my business. Trouble is that I do not know if RE should be my business or if I should change routes. I study a lot about online business, like selling on Amazon FBA, but everyone seems to be doing that, and I rarely see someone being successful on that. Looks like a herd behavior for me.

Thank you again =)

 

[Kung Fu Steve]

1- I fear that Real Estate Agents will become useless in some years. Internet it's making it so easy for people to get information and soon someone will find a way to make the realtor not needed. Maybe some kind of Uber for real state.

Although I am not an agent myself, I have been working with many of them in the last year to help grow their business. With the few thousand that I've had the chance to meet I notice a few patterns of failure and success.

First, the lowest performing agents in a brokerage have a habit of relying on technology to do their job for them.

An interested buyer approaches said agent, they say "go on zillow and when you see a house you like, I'll write up the contract for you."

If that's you as an agent -- yes, you're already outdated and not needed.

The highest performing agents pay attention to the customer experience. They have a strong discovery process that lets them know what this potential buyer is looking for in a home, their budget, their wants, their dreams, their should haves, and their must haves.

Once they have discovered these, THEY go searching for properties that match this criteria for their clients. Then THEY show them the house with a professional tour, they help to paint the picture, they point out the good, the bad, and the ugly. They offer suggestions about how to meet their needs even if the house isn't exactly picture-perfect.

Then they hold their hand through the buying process, explain all of the details needed, they go to bat for the buyers to get them the best deal, they negotiate with the seller, they advise them throughout the purchase.

I could go on but I think you get the idea.

If you're lazy as shit and don't want to do your job -- yes -- you're a useless agent. But that's not you!!! ... right?

2- Market is CROWDED! On my way from my house to my office (witch takes me around 15 minutes), I counted 21 Realtor Offices! I think this is the most crowded market I've ever seen actually, witch I know violates the rule of NEED.

And how many of them are performing? No matter how large the office, there are 1 or 2 top performers, 2-4 mid performers, and everyone else is struggling. The only thing that's crowded is the bottom of the mountain -- the people who decided to get their real estate license and never actually work.

That's silly.

3 - I'm really lost at this point.I have plans for my next moves as a real estate agent, but I don't fell like going All In, because I fear that my service may become useless in some years (or months, who knows?).

Either you're 100% committed or you're not.

How would your wife/girlfriend/husband/boyfriend react if you called them and said "hey baby, yeah I love you, you're amazing, you're great... but I'm only 50% committed to you."

We probably wouldn't ever hear from you again.

The truth will set you free -- and right now that truth is you are afraid.

You're going to have to face those fears if you ever want to be an entrepreneur. And no matter what anyone says, when you're an agent, that IS your business and you ARE an entrepreneur.

Remember, courage is not the absence of fear... courage is acting in spite of it.

Go get 'em

 

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[ddzc]

Thank you! I agree with most of your post. But thinking about owning a brokerage: Wouldn't the owner be as damaged as the agents?
Cause if I own a brokerage and my agents are not selling, I won't have much of a profit, since I have to keep the office working, pay for marketing, etc...
I see this at brokerage I work today, and the others brokerages in my city. Agents aren't selling, and brokerages owners are struggling to keep the doors open.



It seems like you and I have the same strategy. I became a Realtor to gain a lot of experience with sales, investment, to build a network e learn everything I could from successful people that I'm exposed to.

I save most of my money as well, to invest on my business. Trouble is that I do not know if RE should be my business or if I should change routes. I study a lot about online business, like selling on Amazon FBA, but everyone seems to be doing that, and I rarely see someone being successful on that. Looks like a herd behavior for me.

Thank you again =)

If you own a brokerage and have lousy agents, who's fault is that? Yours. You're not a good leader. You don't have the tools and resources required for them to success and it's your fault that you brought in bottom of the barrel agents.

Again, to reach brokerage level, you need a good track record with numbers that truly shine. That's not something which happens over night Time to get to work

 

[ZMan26]

no way.

They [or you] will need to adjust and play the game like everyone, that means get your leads online and take more of your work online, use the changes in your favor.

But I don't believe people will buy a house without seeing it because they "get all the information online" thats a big purchase and people will always need to see it physically [imo] if you're talking wayy down the road when the virtual reality stuff comes out than Idk we'll have to see

With that being said, I believe retail stores are going to close their doors because of the internet.
Amazon is taking over, and it doesn't make sense anymore to have a retail store where you pay rents and the expenses are so high.
Some will last [ especially high end ] but a big chunk of them will go bankrupt, it just happened to Sports authority here in Florida.

 

[Mulsanne]

Although I am not an agent myself, I have been working with many of them in the last year to help grow their business. With the few thousand that I've had the chance to meet I notice a few patterns of failure and success.

First, the lowest performing agents in a brokerage have a habit of relying on technology to do their job for them.

An interested buyer approaches said agent, they say "go on zillow and when you see a house you like, I'll write up the contract for you."

If that's you as an agent -- yes, you're already outdated and not needed.

The highest performing agents pay attention to the customer experience. They have a strong discovery process that lets them know what this potential buyer is looking for in a home, their budget, their wants, their dreams, their should haves, and their must haves.

Once they have discovered these, THEY go searching for properties that match this criteria for their clients. Then THEY show them the house with a professional tour, they help to paint the picture, they point out the good, the bad, and the ugly. They offer suggestions about how to meet their needs even if the house isn't exactly picture-perfect.

Then they hold their hand through the buying process, explain all of the details needed, they go to bat for the buyers to get them the best deal, they negotiate with the seller, they advise them throughout the purchase.

I could go on but I think you get the idea.

If you're lazy as shit and don't want to do your job -- yes -- you're a useless agent. But that's not you!!! ... right?



And how many of them are performing? No matter how large the office, there are 1 or 2 top performers, 2-4 mid performers, and everyone else is struggling. The only thing that's crowded is the bottom of the mountain -- the people who decided to get their real estate license and never actually work.

That's silly.



Either you're 100% committed or you're not.

How would your wife/girlfriend/husband/boyfriend react if you called them and said "hey baby, yeah I love you, you're amazing, you're great... but I'm only 50% committed to you."

We probably wouldn't ever hear from you again.

The truth will set you free -- and right now that truth is you are afraid.

You're going to have to face those fears if you ever want to be an entrepreneur. And no matter what anyone says, when you're an agent, that IS your business and you ARE an entrepreneur.

Remember, courage is not the absence of fear... courage is acting in spite of it.

Go get 'em

Thank you Steve! Very attentive.

Everything you said about what makes a top performer agent is true. I'm aware of all this, I dedicate myself a lot about learning sales techniques, since building Rapport from closing techniques.

About being afraid, I am. Never said I'm not. I'm afraid that the position I'm in now may become obsolete.

I mean, look at Netflix. After Netflix, Blockbuster just died. I'm not afraid of being a bad agent, I'm afraid that agents in gerenal may become useless .

If you own a brokerage and have lousy agents, who's fault is that? Yours. You're not a good leader. You don't have the tools and resources required for them to success and it's your fault that you brought in bottom of the barrel agents.

Again, to reach brokerage level, you need a good track record with numbers that truly shine. That's not something which happens over night Time to get to work

You're totally right about that!

But again, my question is: How long will this market last the way it is now? Because if agents become obsolete, brokerages become instantly useless as well.
What if the companies find a way to sell their properties with technology by themselves?

It's not hard actually, they do it today. But let's take Virtual Reality as an example.

If you could show your house through VR to a client in another country. You could make a page where the buyer can simply click on a link and he could see all the propertie without moving from his couch.

I mean, it's just an example. Just this wouldn't be able to make Realtors useless, but I think you got the point.

Thansk again!

 

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[ZMan26]

Your main problem is "market is crowded" as you stated.

You need to learn to burst through noise, it will take a lot of action.

Post youtube videos in your language giving RE tips, show the houses in youtube videos, spam the hell out of facebook with real estate related stuff, use the internet to expose yourself.

You cant find customers because you're in obscurity with them, they don't even know you exist. let them know brother.

 

[Mulsanne]

no way.

They [or you] will need to adjust and play the game like everyone, that means get your leads online and take more of your work online, use the changes in your favor.

But I don't believe people will buy a house without seeing it because they "get all the information online" thats a big purchase and people will always need to see it physically [imo] if you're talking wayy down the road when the virtual reality stuff comes out than Idk we'll have to see

With that being said, I believe retail stores are going to close their doors because of the internet.
Amazon is taking over, and it doesn't make sense anymore to have a retail store where you pay rents and the expenses are so high.
Some will last [ especially high end ] but a big chunk of them will go bankrupt, it just happened to Sports authority here in Florida.

Thank you! I was thinking about VR, and I'm 100% sure it's gonna be BIG in Real Estate Market. Let's see how it's going to impact, and how much time to become that big.

 

[Red]

Sorry I'm late to this party, was out of town.

Since the dawn of the internet as we know it today (late 90's? maybe? lol), "people" have been saying that RE agents will be a thing of the past soon. Turns out, due to our society's tendencies to be litigious/idiots, a higher percentage of people buy/sell their homes today through real estate agents that they did circa 2000. That being said, the agents role has changed & with the advent of the internet, they can no longer pull the wool over the consumers eyes for personal gain as they used to. It was very easy to control/manipulate information when the MLS was a book that was delivered to the broker's office every Sun/Monday. Now, the MLS information is out there for everyone & it has only benefited the consumer, which I'm all for.

I fear that Real Estate Agents will become useless in some years.

Most already are. As others have mentioned, a solid 80% of RE agents are worthless.

Market is CROWDED!

Every market that is perceived to be easy money is crowded.

I don't fell like going All In, because I fear that my service may become useless in some years (or months, who knows?)

Well.... I can't help you with this one, but I believe the exact opposite. As with divorce attorneys, agents are often needed to help people make sound financial decisions when emotions are running high. This will not change, as it's predicated on human nature. And just like divorce attorneys, you better know your local, state & federal laws that govern the transactions that you're helping your clients navigate. If your only hesitation about getting into this industry is that it will fade into oblivion, well... you don't have to worry about that one any time soon. Now if you're getting into it because you think it's going to be a constant stream of easy money... well... you might want to start worrying or avoid the industry all-together.


Source: real estate broker that owns/operates a brokerage in Phoenix, AZ.

 

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[Mulsanne]

Sorry I'm late to this party, was out of town.

Since the dawn of the internet as we know it today (late 90's? maybe? lol), "people" have been saying that RE agents will be a thing of the past soon. Turns out, due to our society's tendencies to be litigious/idiots, a higher percentage of people buy/sell their homes today through real estate agents that they did circa 2000. That being said, the agents role has changed & with the advent of the internet, they can no longer pull the wool over the consumers eyes for personal gain as they used to. It was very easy to control/manipulate information when the MLS was a book that was delivered to the broker's office every Sun/Monday. Now, the MLS information is out there for everyone & it has only benefited the consumer, which I'm all for.





Most already are. As others have mentioned, a solid 80% of RE agents are worthless.




Every market that is perceived to be easy money is crowded.




Well.... I can't help you with this one, but I believe the exact opposite. As with divorce attorneys, agents are often needed to help people make sound financial decisions when emotions are running high. This will not change, as it's predicated on human nature. And just like divorce attorneys, you better know your local, state & federal laws that govern the transactions that you're helping your clients navigate. If your only hesitation about getting into this industry is that it will fade into oblivion, well... you don't have to worry about that one any time soon. Now if you're getting into it because you think it's going to be a constant stream of easy money... well... you might want to start worrying or avoid the industry all-together.


Source: real estate broker that owns/operates a brokerage in Phoenix, AZ.

Thank you!

And yes, my only hesitation is that it would fade into oblivion. Thanks for your answer! (And for the record: No, I don't think it will be a constant stream of easy money. I've been working as an agent for one year now, not enough to be an expert, but enough to know it isn't easy money).

I didn't know that a higher percentage of transactions are being made though agents today, either.

Thank you again for your post, very helpful!