Is this Good or Bad for the Consumer?
When I arrived on the real estate scene in 1976 in Truckee, California, I was a mere 22 years old. I knew nothing about real estate. While it was technically accurate to call myself a real estate practitioner, I shudder to think of all the folks I “practiced” on in those days.
So when I read these newer studies that show how Realtors are increasing in number and decreasing in age, my gut reaction is to be frightened for an unsuspecting populace. Of course back when I started, it was much harder to find quality training, education and mentorship that encouraged best practices than it is today.
According to the National Association of Realtors (NAR), the median age of a Realtor, as of 2015, is now 53. This is reduced from 57 in 2014 and is the lowest since 1952. This means a lot of younger people are joining the real estate industry.
Our local market is no exception to these statistics. We have been observing large increases in the number of ARMLS members over the past two months. This is the listing service that almost all local agents register with that enables them to hunt for homes and list them publicly as well. Today we topped 36,000 entries in this database. As recently as March 24, we saw fewer than 35,000, which is an increase of 500 agents a month! All of the largest 20 real estate brokerages except (except for one) saw increases in the number of agents as well.
So is this a good thing for Joe Q. Public? Is my gut twisting in knots needlessly? From a base economic standpoint, more laborers within a single industry creates more competition, more choice and, theoretically, lower average costs for the public to employ those agents. So from that perspective alone that can be seen as a gain to the public.
On the other hand, new agents mean inexperience, and in our industry, the knowledge we gain from experience is half our worth. A successful listing agent must also understand marketing, negotiating, and how to price a home correctly to get their clients the highest value for their property. If an agent is representing a buyer they need to know how to read a local market, and to understand the basics of lending so they can guide their client to an honest and fair lender. The 90 hours of classes you must take to become a licensed Realtor in Arizona will not give a person these skills.
My son actually began his career working for a very successful agent in Idaho as a licensed assistant in 2009. He was involved with 50 transactions from start to finish before he ever represented his first client, and I wish more agents would begin their careers this way.
It’s not that you should never work with a newer agent, because many of them are motivated, high energy, and desperate for a payday, which means they will break their back for you. The questions you need to ask are; 1. Does this agent know where to find the right answers when they are unsure of something? 2. Does the agent have a mentor/business partner they can lean on for experience? 3. Is this agent taking steps to educate themselves regularly? 4. Is this agent full time?
Fortunately, with larger companies such as our firm, HomeSmart, excellent training is made available to all agents and that’s a plus. We also have tremendous Broker Support, all of which I wished I had when I started in the biz back in 1976.
My greatest plea to a consumer searching for an agent, is not to just go with the first one you meet, which is what most do. Instead attempt to evaluate their level of experience, industry knowledge, and integrity.
