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For well over a hundred years, Americans have turned to real estate agents to help them buy and sell properties, and achieve their dreams of homeownership. The housing market has seen its fair share of ups and downs throughout history; the Stock Market Crash of 1929, for example, led to an economic collapse, causing millions of people to lose their homes and life savings. More recently, we saw the United States housing bubble burst, resulting in a nationwide mortgage crisis and a period of time known as “the Great Recession.”
The housing market has always fluctuated with the economy, so it makes sense that COVID-19 has significantly impacted the real estate industry. With health concerns and stay-at-home orders, more people have been spending time at home since March 2020.
As more people are looking to buy property — and fewer owners are willing to list theirs for sale — we are now witnessing a “tightening” of the housing market. Put simply: mortgage lending standards are hardening as housing prices reach all-time highs.
While increased demand for housing might sound like a healthy marker of success for real estate, real estate agents are, in fact, grappling with a lack of inventory. And that isn’t the only challenge they face — the growing popularity of listing portals and homebuyer apps like Zillow, Homesnap, and Zoocasa have limited even the best brokerages’ and real estate agents’ role.
So what does the future hold for real estate agents? To get a better understanding of the pandemic’s effects on their careers, let’s first look at the role of a real estate agent.
Real estate agents wear many hats: they generate leads, show properties to potential buyers, market their businesses, and collaborate with other parties over the course of these processes. But, above all, becoming a real estate agent means helping Americans achieve the major milestone of homeownership.
Contrary to popular belief, there is a difference between realtors and real estate agents. While these terms are often used interchangeably, real estate agents have a professional license to help people buy, sell, and rent real estate, and typically work for a sponsoring broker or brokerage firm. A Realtor, on the other hand, is a trademarked name for a licensed and real estate professional who is a member of the National Association of Realtors (NAR). Realtors have to comply with NAR’s Code of Ethics.
There are different types of real estate agents, too: a seller’s agent represents the person selling the property; a buyer’s agent represents the person buying a home; and a dual agency is when a buyer is represented by the same firm that has the listing.
While each state has a different timeline for how long to become a real estate agent, the process asks for at least 30 to 90 hours of official pre-licensing courses. Outside of real estate agent education, real estate agent requirements include: real estate agent training, a state-wide real estate exam, real estate agent certification, and a licensed broker to sponsor them.
Now that you are familiar with a range of real estate agent careers, let’s take a look at five actionable ways brokerage firms can improve the work life of real estate agents.
Without inventory, there’s no income or business for even the best real estate agents. Referrals, while always crucial, are especially important when inventory is low. With the proliferation of apps like Zillow, agents provide years of trust and expertise that is likely going to be recognized through first-person, direct-source recommendations. As a broker, client, or real estate agency owner, it’s of utmost importance to broaden your sphere for influence so your agent can land on the radar of potential clients.
Brokers can increase their influence by interviewing local business owners, promoting the interviews across social media platforms, and making interpersonal connections in their neighborhood, or what most real estate agents refer to as their “farm area.”
Being a real estate agent today means being extremely diligent. “One of the most important things is visibility,” says Schleicher. “You have to have your ear to the ground to know what people are looking for. I don’t need a bottle of wine, or a gift card — if you have a good experience, pass it on and bring other clients.”
Today, digital shopping millennials are more likely to seek out an agent at later stages of the buying cycles. Succeeding within the contemporary real estate landscape, then, means creating an experience that can match the accessibility and convenience of listing portals and user-centric apps like Zillow, Homesnap, and Zoocasa.
It’s vital for brokers to utilize their digital advertising to appeal to younger buyers, and social networks to source referrals. They can launch a community-centric website or “geographic farm” to compete with larger brands and veteran agents within their area.
Search Engine Optimization (SEO) is key to drive organic traffic to broker and real estate firm sites, and is likely to grow their database and chances of being discovered by prospective buyers. Organic traffic is more likely to generate and convert leads, too. Remember: when it comes to real-estate, community is key.
Not having to abide by typical office hours serves as both pros and cons of being a real estate agent. A typical day in the life of an agent can range from early morning open houses, or driving to an evening viewing to accommodate a prospective buyer’s schedule.
“There is no typical day in real estate,” says Aaron Kirman, one of Los Angeles’ top real estate agents. “At the level that we do, people need you when they need you and they want you when they want you.”
While agents have the power to choose their hours, their income is strictly dependent on how many hours they work. Successful real estate agents are almost always on call, making themselves available whenever their clients need them.
According to Newsweek, “They’re often subject to the whim of a client’s schedule and needs, which forces them to work odd hours — like an all-day Saturday open house or a post-dinner showing — and display extreme flexibility.”
As a broker, it’s important to create and communicate boundaries to managers and clients and let everyone know what’s the best way to get their eyes on something — “whether that’s a messaging app, email or quick phone call.”
The pandemic has rewritten many rules for the workforce. When brokerage firms work with a real estate agent, it’s important to be deliberate and clear about strategies around building a schedule and setting boundaries through effective communication. It’s also important for brokers to follow-up and check in on their agents to see how they’re doing in real-time.
Real estate is a collaborative practice, and agents tend to negotiate commissions with their brokers when they first get hired at a brokerage firm. In most cases, brokers and agents arrive at a 50/50 split, in which they receive equal sums of money from a commission.
However, there are other split options, too: agents can negotiate a 60/40 or 70/30 split. In some circumstances, agents can even pay a fee to their broker to keep the majority of the commissions they earn.
It’s important for brokers to recognize the value agents add to their firms; to appreciate the footwork, time, and energy agents inject daily to their practice — and arrive at a commission split that feels fair. They can do this by assessing their model of payment at regular intervals and decide whether a salaried model, consultant model, or office-fee model works best for their partnership.
Real estate, of course, doesn’t come without its own set of risks. Today, the number of annual real estate agent casualties in the country exceeds fatalities from shark attacks. According to the U.S. Bureau of Labor Statistics, 48 real estate agents died on the job in 2017 alone. Recent real estate agent endangerment incidents include Virginia realtor Soren Arn-Oelschlegel and Minneapolis real estate agent Monique Baugh.
Statistics from the National Association of Realtors’ (NAR) 2018 survey show that 33% of its members feared for their personal safety, and the number rose substantially (41%) for women real estate agents.
The California Association of Realtors and seven other state Realtor associations have signed up to promote the free, agent-safety “Realtor Safe Harbor” program — an initiative which aims to “encourage brokerages, lenders, and title companies to open their offices to agents who want to vet clients they’re meeting for the first time.” They’re not alone. Open Door Partners is a similar database that is geared to build a national database of real estate offices open to any agent who wants to vet a client.
Bringing clients to office meetings first can reduce risk, which is why it’s important for brokerage firms to take safety precautions and vet prospective buyers first. Brokers can sign-up for one of the many initiatives available for agent safety, and protect their workers.
Vetting clients can have other benefits, too: firms can make sure that they are ready to buy or sell, and that they have their funds in place so they don’t waste either their agent’s time.
While working in real estate has its challenges, it’s one of the most important and rewarding roles in the contemporary workforce. “Facilitating the process is like giving birth,” shares Diane Schliecher. She isn’t wrong: real estate agents build communities and help people uncover their dreams of finding their lifelong home. Which is why it’s important to recognize and appreciate them for their hard work, and do whatever you can to make their lives easier.
Small interactions can make a big impact on company culture. SmartGift’s Spotlight Series identifies the joys, challenges, and needs of specific roles within the teams we work. Over the forthcoming weeks, we aim to outline creative and unique strategies for companies to show appreciation and support their team members.