We all talk about how tough a new agent's rookie year is, but once they've survived those 12 months, they're good to go. And in the old days, I would agree. I sold 25 houses in 1997, 35 in 1998 and close to 50 in 1999. So, by the end of my third year, I'd sold over 100 homes and most of my surviving rookie friends (the ones who started the same time as me and were still in the game) had similar track records. I think it's safe to say that once you've sold 100 houses, you probably have a pretty good idea what you're doing (although every day almost always STILL gives me a learning experience or two!)
But the rookies and first-year agents I've been talking to lately have a much different experience. Most sell fewer than 5 houses their first year and maybe double that in their second.
I met with a 3-year agent the other day who has only sold 19 houses in his career and seems moderately happy with that. What struck me about this 3-year agent was how inexperienced he came across - I was trying to help him negotiate multiple offers on his listing and was stunned at his level of, (how else can I say it?) incompetence. He'd never heard of a back-up offer or understood the issues that might arise with an FHA loan on a fix-up property. He thought he was supposed to take down his For Sale sign and lockbox as soon as his listing went under contract. He hadn't yet selected a preferred title company to work with. He didn't know that he had to change the status from "Active" to "Under Contract" in the MLS within 24 hours of accepting a contract.
I can see how a brand new agent wouldn't know any of these things and you don't call that incompetence - you call it inexperience (and hope she has good broker guidance). But all of these things were issues I learned about in my first year - and by my third year - heavens - this was kindergarten-level stuff! But it all seemed new to him.
First and second year agents - how comfy do you feel in your REALTOR skin and at what point did you start to feel that you could handle pretty much anything tossed your way? Or DO you feel that way yet? Old Fogies - is my experience unique? Or did our "generation" have a better opportunity to get up speed faster?
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I see new Realtors today seem to be far less experienced than new Realtors of a few years ago. Maybe because the volume was down in the last few years and they didnt get as much hands on experience as newer agents in the past?
I agree. I have been an agent for two years now. We are coming into this during a trying time. On one hand we don't have the experience but on the other we're much more willing to learn and try new things.
Did you read the blog about having shoes older than the new agent? I am amazed at how many seasoned agents are so slow to adapt. I do hear about the MLS book :)
So all in all, I may not have the experience yet, but I feel I have an edge.
All new agents should start off with a brokerage that will provide additional organized training prior to really using their license to sell or list. Some brokerages say they have training, but it is catch as you can. When I joined Long and Foster, they provided significant training before we could be really active. Starting off with a solid foundation will keep agents out of trouble and keep the respect of agents that they work with on transactions.
I think you have a point, but are missing a few things that would explain the differences between your experience as a rookie and the rookies of this generation (I happen to be one).
There are so many more agents now than there were back in 1997, so there's less of the pie for each.
Question: how did you get those 25 listings sold in your first year? Did you get them all on your own?
Another question - did you have another job to support your efforts as a realtor? That may seem a bit strange, but you also have to realize that some of us have jobs outside of real estate. That doesn't mean that we can't produce. I'll write a post about my efforts in that regard at the end of the year...
William- I didn't mention the fact that many of today's rookies have outside jobs, but I'm sure that's a factor. It doesn't change the fact that if you only sell a few houses a year, regardless of the reason, you won't learn as fast.
I got all 25 of my first listings on my own - thru my SOI. And I believe with all my heart that there was more business to go around back then and I tell ya' - I'm GLAD I started then so I could get up to speed quicker! Rookies today have it tough - no question.
Jo-Ann - THAT is why I wrote my book - because the training most agents receive is awful. "Here's your desk, here's your phone, good luck to you."
Christine - I agree that some of the newer agents I"ve met definitely have an edge over the old fogies. But, that was probably the case when I was new, too and fax machines were a novelty!
John - that's exactly my point. I used to consider a 3-year agent to be fully trained, but today I'm not seeing that.
NO DISRESPECT TO NEWBIES AT ALL! I LOVE YOU GUYS!
I believe you get what you go after. Yes, it is difficult for new agents, but I think half of that is everyone telling the new agents it will take them 1-2 years. We are giving them permission to have a couple of bad years.
The market for sure is tough and it is changing daily. But theere is a thinning of the herd going on so hopefully we will be back to seeling more soon
It all goes back to training. Many brokerages offer a minimal amount of training and we all know that real estate school doesn't teach you a thing about actually working with buyers and sellers. I was lucky to receive some fairly in-depth training when I was a rookie, along with having an experienced mentor in the office to call on when I had a question. Without a doubt, this helped me get through those first couple of tough years. The sad thing is that many of the seasoned veterans don't want to share with anyone for fear of losing their "edge".
I have been with a firm for about a year and have only had one transaction. As a result, the months of training we received in the first few months that we joined become a bit fuzzy after a while of not being able to put it to practical use. I am one of those people that have another job outside of real estate (which I know according to your book, you are not too thrilled about :) still love the book anyway) which may also put us in a bad position. We have an income coming in, which may not make us as "hungry" as someone who has no income, insurance, etc. and needs to work their you-know-what off to feed themselves (pets, or possibly their kids), pay the rent, mortgage, whatever. Don't get me wrong, I am working hard (as I'm sure other agents that have a secondary job) to get my start, but at the same time our current market makes it harder for us to get that bigger piece of pie. Our office has a good reputation, but my managing brokers said it's been tougher than they remember it being in quite a long time....I know I need to start going back through my training materials. Thanks for the kick, I think I will put that on my list of things to work on within the next couple of weeks. Sorry for the novel...
After 3 years and he did not know the basics... Thats pretty scary. And he actually had enough closings under his belt that there is no excuse??? perhaps he is in the wrong career?
I speak to our Newbies at my local board every month, and one of the things I preach is building the team of professionals around you to be successful. I think that is so important to consider your referral partners as business partners. In my area the short list would be Agent with an attorney, Mortgage guy/gal, Inspector etc... with that core of trusted PARTNERS you can put the deal together, hand it off to the next link and move on to the next deal and stay productive!
Honestly, I'm not sure if this agent's lack of competence is a result of a slower market. Some of the examples you cite are b-a-s-i-c. Updating the MLS? Ok...perhaps he has someone in the office that handles MLS entries/updates. Removing the sign/lockbox before closing? Umm...in this market, he may be spending an inordinate amount of time driving back and forth to plant and remove signs at the same properties. Never heard of a back-up offer? Where's his broker? This agent is doing a disservice to his clients, and his broker is allowing it.
The fact that this agent has 19 transactions under his belt should indicate some level of "experience" whether they occurred within a 12-month period or a 3-year period. To me, this seems less about "time served" and more about "completely clueless". Any broker who allows this to go on (for 3 years???) deserves whatever consequences result from this agent's obvious lack of knowledge and understanding. Hope they both have good liability coverage...
As a newer agent (licensed in '06) I don't really know any market other than the current one, and I'm planning on sticking around long enough to see things turn around. But in the meantime, I'm taking this time to learn as much as I can (and let's face it...this market is chock-full of learning experiences!) Education is no substitute for experience, but, by the same token, experience alone (without education and understanding of same) is no guarantee of competence.
I have to wonder whether this is a case of an elongated learning curve, a broker dropping the ball, or simply an individual's misguided career choice.
***feisty (and long-winded) "newer" agent stepping off her soapbox now***
Experience is key. It doesn't matter so much how long you have been licensed a much as it matters how much you have gained through trial and error.
I was licensed in 2007 and had 9 transactions in my first full year -- 3 listings (sold), 4 buyers and 2 renters. But yes, without the business, how are we to learn and grow? Training in the first 6 weeks only goes so far. So starting out in this kind of market has been quite a challenge. I'm like Kim, though...not a quitter and plan on being around for the long haul!
Two thoughts come to mind...
1) Some people can pass tests to get licensed but that does not prove they can ever function properly as a business person.
2) I have always contended that while there are great Realtors out there that really help their clients, the complexity of the deals, the number of entities involved (agents, closers, title, survey, appraiser, home inspection, termite bond, etc.), the lack of understanding by most buyers and sellers and the infrequency of transactions by the buyers and sellers.... all protects the incompetent and the unethical agents and service providers.
The buyer and seller with either incompetent or unethical agents don't know what the problems are, who caused them, who to believe when the finger-pointing starts, who to complain to (and if it will matter) and in the end are just glad to have the experience over. Thus, the incompetent and/or unethical live to ride another day!
I agree with the learning curve theory to some extent. But I also think that good people make good realtors, and experience just adds to it. I'm a newbie, but knew what a back up offer was before my first deal....
Jennifer,
I do not think this problem is limited to "rookie agents". I am an instuctor in Texas and when I teach MCE courses you often find agents who have been in the business 20+ years doing things wrong.
Jennifer, I sell commercial real estate only. I am in a small market (Jackson, WY), but it's a market with a VERY high average home price, and that means lots of residential agents. Last year there were about 900 licensees in our market of 20,000 year round population.
What all that means, is that quite frequently a residential agent will bring me a buyer/tenant for my commercial listing. And the residential agent won't have a clue what the issues are, what questions to ask, etc. So I am used to working with inexperienced/incompetent agents on the other side of the transaction. I use that to my advantage - not by unfairly getting a better deal for my client, but by demonstrating competence, and earning the respect and trust of the buyer/tenant. And the next time around, that person will be my client. After 6 years, business has never been better.
I do think it takes longer to get up to speed in this type of market. Because longer periods of time may pass between sales and listings its harder to feel competent. However, I think with good mentoring and training a rookie can still learn lots of things in this type of market.
Jennifer - I don't necessarily agree that new agents have a longer learning curve. The agent you write about who has done 19 transactions just re-emphasises to me that you don't have to be a good agent to get business. In order to be successful in real estate, you need clients, you don't necessarily have to be an expert in the field as your story shows. I believe, as you have shown by doing 25 transactions in your first year, that having a great SOI is critical in your success as a real estate agent. I think you should consider yourself lucky to have had 25 transactions in your first year. I don't think by any means that is the norm in the industry. Also, you can be the most knowledgeable agent in the world, but if you don't have any business nobody will know how good you are.
I personally don't feel that any of the things you mentioned have anything to do with inexperience. If you do one transaction, you should know about all the things you mentioned.
Jennifer,
I have been in the biz for 9 months now and am working on my 4th transaction. Each transaction has been markedly different.
I have minimum formal training from our small office, except for a couple of the experienced agents that have voluntarily taken me under their wing (which was great) from time to time. Experience IS the best teacher, though IMHO.
I have been lucky that I have had rather soulful agents on the other side of the transaction that have given me good advice rather than taking advanatage. Every corner is a new learning experience. There just need to be some more corners.
I just had to "coach" a 20-year veteran on how to fill out a reply to inspections. She just wanted to "phone it in" she said.
It's all ages/all levels.
I've never seen a bull market as an agent - and I was working half-time in another field until that job dried up. Having said that I have to say that I find what you are describing pretty scary.
Understanding what needs to be done is often a function of common sense and some of that seems to be lacking in the case you sight. Knowing how to execute portions of it is another issue. For a while, listings were so rare for me that inputting into the MLS was a nightmare. When in doubt I ASKED!!!! But understanding that status changes had to be done promptly shouldn't take too much between the ears. I actually have a few fewer transactions and don't need anything close to that kind of hand holding.
As to those who think those of us who didn't achieve great things our first years...GET REAL. Agents today face the barrier of sheer numbers absolutely UNKNOWN to the previous generation. However bad it was for you, it has been exponentially worse for us. I dug into my retirement savings to get myself launched. After 3.5 agonizing years it is just starting to pay off. In my part of the country you needed to throw the kitchen sink at marketing. I would tell any rookie in my area to have FIVE YEARS of living expenses set aside and at least $5000 in marketing/year stashed away before even thinking about doing this full time.
I don't like to be a nay-sayer - but I'm working about 70 hours a week still at minimum wage to get this ball rolling. It is starting to work. I just hope its in time to prevent the forced sale of my own home. People who do too much "rah rah" stuff can cause real damage to the finances of rookies.
As to the part-time vs. full-time issue. I just recently ran into two agents that aren't that experienced. One has a full time job in Manhattan and is really, REALLY part-time. It's a problem. My previous job as a adjunct professor didn't leave me outside the real estate loop for so many hours. It made doing things this way doable. This amount of time devoted to a job with a commute attached to it seriously limits the abilit of this agent to do what needs to be done.
Another newer agent just hasn't been in the business long enough to do sensible things and it may have cost me the sale of a listing. Agent #2 has more transactions than me but they came through family connections....so this agent wasn't used to getting down and dirty with the unwashed public and I realized in retrospect that she wasn't accostomed to it. The notion that a buyer would "disappear" or have second thoughts or change their mind at the last second was beyond her experience. The buyer showed up with a "friend" for a deadly 3rd showing (which I won't do unless circumstances are extraordinary) who trashed the property and talked him out of the purchase. She was unprepared for this frontal assault and was left blindsided. Since I didn't have any "contacts" I didn't lead a charmed life in my early transactions. 3rd showings are often deadly - I would have been expecting the "friend" and problems a plenty.
I personally like to think that I am driving other agents in my office crazy with all of my questions.
I too mostly handle commercial/industrial real estate. It is a little frustrating when working with another agent that has not had previous experience with non-residential properties. I agree with Tim that buyers (and sellers) will notice the difference in the competence level of agents. But then again, most commercial agents are not as good in residential sales/financing, or farm & ranch properties either!