All industries go through ups and downs. You hear talk about the seven year cycles. Businesses expand and contract to adjust to the needs of their clients. Sometimes, it’s time to tighten the belt, sometimes it’s time to push forward and expand.
Normal business cycles have a way of weeding out the poor business owners, those who don’t do the job as well. Unfortunately, with the current real estate market the way it is, we are going to lose a lot more than that.
First of all, if you don’t believe that buying or selling is in the best interest of your client, how can you encourage them to buy or sell? If you can’t encourage people to buy or sell, how can you stay in business in this market?
Obviously, people who need to sell now, should sell now. But there should be a real need to sell now. In another six or eight months things might improve. Of course, it could take a year or more. No one knows.
Buyers may be another thing. Buyers who are coming to the area and want to purchase a home now, should consider the options. Do you buy now?
Whatever you do, whether you buy now or buy in six months or two years, there will be risks. Anything you buy, whether it be a home or an iPhone, has some risks. Prices may change. There may be some undiscovered defect. There is no such thing as purchasing something without risk.
A good agent’s job isn’t to eliminate risk. No one can do that. A good agent’s job is to inform the client of the potential risks. In this market, agents who gloss over the risks, who minimize the potential problems with values, these are the agents who will continue to sell homes and stay in business. Not the agents who think it is the best interest of the client to wait.
The agents who are informing the clients of the risks, are scaring them off. So as the agents bank account dwindles and credit cards are maxed out, the agent has to make a decision. Do I sell in order to survive, or do I try to ride out this blip in the market?
Since most agents are independent contractors, the ability of any individual to survive this downturn is based on the ability of the individual. If the individual has saved, maybe she can wait for the market to change. If the agent has a spouse who is working, maybe she can wait. But given the number of agents, the limited number of deals and the competition to get them, agents who have other talents may decide to take them elsewhere. And, unfortunately, the brokerage firms won’t have any incentive to keep them since there are always more walking in the door.
It will be interesting to see how many agents renew their membership with NAR in January. It will be even more interesting to see who is still in residential real estate sales by the middle of next year.
© 2007 by Judy Kane
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