Too Many Agents

Do We Have Too Many Agents?

Do we have too many agents in real estate?  Yes, we probably do!  A broker recently shared a list of sales in our county over a 10 year period.  In 1999 there were only 1800 agents who closed a total of 10,914 sales - approximately 6 transactions per agent. 

In 2009 there were 3189 agents dividing up 8269 transactions - approximately 2.5 transactions per agent.  That is a huge drop in income for many agents.  But it isn't just the count that is worrisome.  The quality of performance has also gone down.  Agents are struggling to survive and when that happens it can be "no holds barred" when it comes to putting, and keeping, a transaction together. 

I constantly hear complaints about a lack of knowledge and ethics and it is getting worse.  The training that is so important doesn't exist in a lot of offices.  And the designated broker is often as ignorant as the agents in the office.  I am personally aware of an office where the designated broker qualified as far as licensing went but had never actually listed or sold a property before stepping into the DB's position.  The agents made a mass exodus.  And today I heard of another broker who has just achieved the license with only 2 years in the business and clearly doesn't understand the basics of contract law. 

Obviously some agents do 20, 30, 40 or more transactions a year so there are lots of agents not making a nickel in this business.  Why do they stay in it?  It is a cost factor what with dues, education, license fees, etc., and it would seem they would be better served to "hang" their license instead of hoping they might get a listing or a buyer that might result in an extra $3-$4k income.  Not enough income to make a difference in one year.

But a bigger question might be why do offices hire agents that don't produce and then continue to keep them?  Non-producing agents, or NPU's as one broker called them (non-producing units), cost a company money and raise the liability level substantially.  There are a few quality brokers running offices who only hire agents who are focused on a career in real estate that makes a liveable income and will only keep agents that produce - it is always a pleasure to be in a cross-sale with an agent from those offices. 

In December our Department of Licensing said we had 26,000 active licensees - a drop of about 15,000 from 3 years ago.  But clearly not enough of a drop.   Hopefully this year will weed out some more agents who make the choice to move to another career. 

And the change in the license law with the increase in education to get in to the business will help keep more marginal folks out of the business.

Bill Hicks, Designated Broker, Keller Williams Federal Way

Administrator, Evergreen Professional Training, Inc.