Blog

After completing  a 2014  P&L this is what became apparent:

1,000 BPOs completed

$30,0000 expenses to complete BPOs including a part time assistant.

That means, just to be in business to complete BPOs  we need to budget $30 per BPO.

Therefore at $50 per BPO, on average -

we net $20 per BPO before social security taxes and health insurance.

Anyone who completes BPOs for $35 or $40 cannot possibly be making a profit.

Home Values at or Near Pre-Recession Highs in 1000+ U.S. Cities…or Are They?

Ask any Realtor, name the single most important  economic impact to housing and they will tell you, its jobs. Yes, it really is that cut and dry, you must have a job to get and keep a home. So, a recent article by RISMedia really caught my attention as it announced “Home Values at or Near Pre-Recession Highs in 1000+ U.S. Cities”. You see, I don’t understand how this can be, especially when you look at our employment numbers.

Back…right before the recession, our lowest unemployment number was 4.4% in May of 2007 and for all of us, the talk of a bubble was rumored to be some crazy economic conspiracy theory. During this time, we had NINJA loans and taxi cab drivers flipping 300,000 homes on the side with their interest only loans. To the best of my knowledge, those times haven’t returned and in fact, our unemployment rate is 6.3% and that doesn’t include the “real” unemployment number which includes all of those that dropped out of the workforce.

First, I asked myself, when was the last time we had a 6.3% unemployment rate and what was housing doing then? Well, the last time we had anything close to a 6.3% unemployment rate was back in September / October 2008, when the recession was getting into full swing. Housing then was terrible, prices were falling, foreclosure were skyrocketing and the industry started talking more and more about short sales. So, why is this 6.3% unemployment rate any different?

Truth is, it’s not. Regardless of your political persuasion, a 6.3% unemployment rate is still a 6.3% unemployment rate and as such, we really should be seeing similar housing prices and trends to what we saw back in 2008. So, why aren’t we?

In my opinion, the biggest single reason why housing isn’t acting the same as it did in 2008 is because of the loss mitigation techniques employed in recent years by many of the “to big to fail” servicers who contributed to why we had a bubble in the first place. Let me be more specific

When a bank gives John Smith a loan for a home, the bank relies on the fact that John will be able to pay back that loan and, build equity. A lot of people don’t understand, the bank needs both things to happen otherwise they loose out big. You can build equity at least 2 ways. First, you build equity by forced savings when you make a mortgage payment each month. Secondly, you build equity if home prices rise, either way, you build equity. For many Servicers (Banks), who gave out risky loans, their clients like John Smith, bought a home he couldn’t afford and therefore, couldn’t build equity and before you know it, John was in a negative equity situation, that is, he owed more on the home than what it was worth. Now, sadly, these banks have lost money however, it’s not really the “banks” money so much as it’s the money of the banks depositors…you and me. Well, some banks, lent out so much money that they were actually concerned that if a run was to happen on their bank, they literally wouldn’t have the cash on hand to actually pay people back on their deposits. That’s right, you could have ended up going to the ATM to withdraw your money and the ATM has no money to give you. Granted, it’s a bit more complicated but, you get the idea.

In order to lessen the impact or mitigate the loss of these bad decisions, many banks moved these non-performing assets or clients like John Smith to shell companies called NBS’s or Non-Bank Servicers. This way it looks like they took the loss on their books and that they are “recovering” and doing much better. The reality is, they have these NBS’s hold these NPA (Non-Performing Assets) in this shell company by offering clients like John Smith some type of deal to “save their home from foreclosure”. These schemes will keep the homeowner in the home for years if necessary, just to prevent the foreclosure. Obviously the more foreclosure a bank has on it’s spreadsheets, the worse the finical condition it appears to be in and WallStreet isn’t having that.

So, here is where it gets very interesting. Let’s say, you have a neighborhood where 25% of the homeowners are upside down, granted….we all know that’s actually a very low number for most of us. The vast majority of the country is still in a Negative Equity situation and per the article I referenced above, it eludes that only about 30% or less of America is in positive equity so that means that 70% of us still haven’t recovered. None the less, let’s say that 25% of a neighborhood is upside down and of that 25%, let’s say 70% of them are owned by Great Bank. Well, Great Bank knows the law of supply and demand and then decides to do some “save my home” schemes and hold foreclosure at bay by offering to keep homeowners in their home at all cost. Sounds ok…right?

Well, it’s not ok because, what they are doing is artificially creating a bubble by using loss mitigation techniques through NBS’s. That’s right, you see an increase in prices, even thought unemployment hasn’t gotten good enough to warrant the price increase in a free market therefore, it’s a bubble. At the very least, you will see a turbulent few years of peaks and valleys in prices because the bank is slowly, trickling inventory on the market as prices rise to capitalize and lessen their loss. Keep in mind, because they own so much inventory in that particular neighborhood, they are literally able to control the price by simply controlling their own inventory and therefore, they can pick and choose which neighborhoods win and which suffer a foreclosure influx.

Now, take that and add the new QL (Qualified Loan) guidelines release this year, the pull back of QE (Quantitative Easing), the further tightening of credit markets with bank to bank lending and what do you end up with? You end up with a completely unjustified housing price bubble that you better be concerned with.

Sure, right now, it doesn’t seem that it’s too bad but, if this continues through the circular selling season and into the fall or even winter of 2014….I would be very cautious…very cautious.

The short answer is no, not yet, that is.

One of the fundamental principles of real estate is that all real estate is local however, back in 2005 / 2006, before the collapse of the last real estate bubble, analyst painted real estate with broad strokes when it came to price predictions and appraisals. More to my point, we don’t say, Nashville is a HOT real estate market like we did in 2005 / 2006 but, instead we say Germantown in Nashville is a HOT market. In other words, real estate markets can’t be spoken to by simply categorizing whole cities as hot or not. We can’t do that because; the market hasn’t completely recovered from the collapse. The good news is, some areas of the Nashville real estate market have recovered and are even thriving.

I like to call this phenomenon the Micro Market. To help me determine if a micro market is seeing an artificial jump in prices, I look at the immediate local development of the area. Now, when I say immediate area, I literally mean, the area walking distance from the subject property. If I can’t walk to the development from the subject property, I don’t consider that development in the cause and effect for increased prices. So, if I see a jump in prices but, I don’t see any significant development to warrant the jump, it throws up a huge red flag for a possible artificial bubble.

Once I have determined a price increase may be the result of an artificial bubble, I go looking for the cause of the bubble. This isn’t very easy and it requires me to really know the micro market. I am looking for things like, unemployment rates amongst local inhabitants, job opportunities, income levels, local government spending or investments, number of NBS (Non-Bank Servicer) REO’s, number of short sales, presence of flippers, long term rentals or new construction, walk in equity or the lack thereof, and a few other things as well. I take all this information in and pinpoint the cause of the bubble or, in some cases, realize no artificial bubble exist, prices are naturally on the rise.

As concerned as we should be about bubbles in real estate markets, we really should be looking very closely at the artificial restricting of the housing inventories. The biggest factor in creating local or micro market bubbles is the presence of artificial housing inventory restrictions. This happens when you have high long term unemployment in a local area but, you don’t see a correlation in REOs and Short Sales. What has happened is Servicers are keeping people in homes longer by offering “save my home” strategies to them that ultimately prevent the foreclosure. Sure, the foreclosure will happen, regardeless of the intent, the homeowners don’t have an income, are unemployed and regardless of how long the bank plays the “save my home” game, it will ultimately foreclose. The banks are doing this, holding inventory off the market artificially, in order to raise local prices so that they may put their inventories on the market when they aren’t so upside down in the asset. It’s a loss mitigation technique to save the bank from taking catastrophic losses however, it creates turbulent peeks and valleys in prices for traditional buyers and sellers. Granted, in a normal market, having one bank with only about 1-5% of all loans in a particular micro market utilizing this technique wouldn’t really hurt anyone however, having 10-15 banks which represent 20-50% of micro market loans, then you get the potential of a few players being able to artificially control prices outside of the established free market. This is scary.

The ultimate lesson here is, now more than ever, buyers and sellers need to be working with experienced, knowledgeable agents who can understand micro markets, the significance of NBS and how unemployment rates, government investments, qualified buyers and investors have in the market otherwise, buyers and sellers could be left holding an asset with no value or even worse, negative equity.

Are you paying attention to the Federal Reserve?

Realtors, be warned. The Federal Reserve announced that it will begin drawing back the bond purchasing program called Quantitative Easing. This is extremely important for us Realtors to know and understand because; this will have a dramatic impact on buyers or those considering buying a home. Let me explain.

In the past few years, we have seen traditionally third world countries see a huge growth in development. For example, did you know that Mexico is now one of the worlds largest producers of aircraft? Yeah, I didn’t know that either but, it’s true. In fact, countries Africa may be one of the continents with the largest expansion of unprecedented wealth. South Africa, Nigeria, Angola, Ghana and Ethiopia were all named 2013’s countries to watch and invest money in due to rapid expansive growth.  So, you may be setting back and wondering, what does these countries have to do with Mr. Jones’s property down the street….well, just keep reading.

The growth these countries have been seeing has been unprecedented and I wanted to know how this was all happening so, I did some research and found that it’s in large part due to the US Federal Reserve. The Quantitative Easing policy of the Federal Reserve has been blazing a trail for the other central banks across the world by essentially manufacturing trillions of US Dollars to buy bonds and drop interest rates around the world. By doing this, the US Federal Reserve has made it easier and more attractive with larger returns to allow investors to move money into third world countries. Investors like those large retirement firms that hold the cash of American retirees. Ok…..so, are you seeing it now, are you starting to understand where I am going? If not, no worries, just keep reading.

So this week, the Federal Reserve announced it was going to draw back and end Quantitative Easing in 2014. It will taper off the amount of purchasing it does monthly and in effect, buying less and less bonds. So, in other words, you are going to see less developed countries that saw huge developments in the past two years begin to have much less cash flow coming in. You will even see Investors pulling out of these countries because, instead of developing more sound political and economic infrastructures with governmental policies, these countries did what any other country would do when they all of a sudden were rich from a windfall, they partied like it was 1999. In short, these countries will not be prepared for the withdrawal of funds and will do one of two likely scenarios. Either they will simply watch their country “ease” back into third world status or the will put in place protectionism policies that will strangle further growth and severely limit investors from moving cash out of the country. In essence, locking up American retiree cash in a third world abyss. I predict that the first two quarters of 2014 will see dramatic cash pull out of third world countries, currencies and, bonds. This will be the start of a mini global recession due to a lack of demand for goods and services.

If that isn’t enough, let’s not forget about inflation. Oh yes, the big bad “I” word. Inflation is the elephant in the room that most people are trying to desperately ignore. Even the Federal Reserve stated that the QE (Quantitative Easing) drawback would have to be timed perfectly to negate the real risk of inflation. In fact, the Federal Reserve said that the reason it’s thinking of doing this drawback now is because, they believe the timing is correct. Now, how they come to that decision, I don’t really understand but, it’s primarily based on the ideology that our economy is growing and the country if financially doing better as a whole. Well, try telling that to the 53% of Americans who are on some form of government assistance right now.

So, just a quick note on inflation, we get inflation when we have too much money in the system. In short, when everyone has a tone of dollars, how much is a dollar really worth? Well, it’s not worth much if everyone has them. So, it takes more dollars to make a gallon of milk or loaf of bread and thus you have inflation. Remember me talking earlier about all those trillions of dollars that the fed has been pumping out into buying bonds….well, those trillions of dollars have got to go somewhere and guess where they are likely to go, right back home, here in the good ole USA. In fact, we are already seeing it happen. Why do you think the stock market has been on FIRE, lately. Those dollars are coming home to roost. When all that cash starts looking to escape Mexico, Rwanda, Honduras, South Africa, Angola, etc… it’s going to all come here and the value of the US Dollar will start falling. In fact, the dollar has seen some of the most recognizable loss of value against the Euro since 2011. Back then, 1 Euro was worth 1.29 dollars, in August of this year, it was worth 1.33 dollars and right now, as of today, it’s worth .73cents. Are you stumped? It took years for the euro to rise .04 cents from 2011to 2013 but, it only took months for it to lose almost half its value…wonder why? You know why, I just told you, all of those dollars….those trillions of dollars through the Federal Reserve QE program is coming home and like any bubble, it’s got to bust at some point. The Federal Reserve is gambling that our economy will be strong enough to handle it when it does but, I am not so sure.

When this bubble burst, it will mean run away inflation and we as a country aren’t ready for that. 2007 will pale in comparison and in fact, I have read many analysis say The Great Depression will pale in comparison. Unfortunately, it isn’t like we are navigating uncharted water here. This has happened before around the world just ask the Weimar Republic….or what used to be the Weimar Republic.

Go visit this wiki site, http://en.wikipedia.org/wiki/Weimar_Republic about the Weimar Republic and then ask yourself, do you now understand how this will impact Mr. Jones’s house down the street?

I have a client who hasn't made a payment in two years. His loan mode was to crazy to accept. So they agreed that they would do a short sale. Well the client decided not to move forward with the short sale till he at least got a notice of default. Its been now 4 month that nothing has happened. Then in the last month the client got a call from the bank offering to give up the property for $5,000. The client said NO. I want at least $10,000. The bank has not responded. No this is Wellsfargo. Not  small potato. Just figure. They delay is something that shows the banks hand in the game. I have two other REOs that have been sitting empty. They where going to put them on the market and nothing in the last 7 months. I have contacted the asset company and no response what so ever. Now why is this happening? The story about the banks are holding off is the reason. Now this bank is US Bank. Again not a small potato. One last one. I have a listing with PNC bank. Its vacated 3 months ago. And waiting for a clean out approval. And nothing. The old owner is suing them stated that they took her property in the from her.  So its tied up until they clear it out but the funny thing is that they got a lock out on her. Just figure. Everything is tied up with attornies who are still making a fortune with the legal battles and the banks not wanting to pull the trigger. Time will tell. I just seam on CNN that the word on the street is that the housing market increase is in jeopardy. Now do your homework. What is that about?

Cheers

Paul Conti

Legacy Real Estate

San Jose, ca 

You are Paying for Motivation?

Ok….so, last week I was contacted by a lead generation company which, for now, will go nameless. I do like getting calls from these types of companies because, I love drilling the poor, unfortunate soul who has to try to convince me that I want to buy leads. Good luck with that. So, they guys starts of telling me that I can be the exclusive agent for their program in my area. They like using the word exclusive, it makes them sound important. He goes on to blow up my ego by telling me that they only accept the top producing agents and he found my information on Google so, he knows I am a top producer….lol. Finally he goes on to tell me that he has a limited time frame that he can hold this exclusive spot reserved only for top producing agents and I need to make a decision today.

Well, I felt like I was going to tell him, “No body puts baby in a corner” but, I totally restrained myself and was like, “Oh my god, that sounds so fabulous” I don’t think he caught it that I was joking with him because, then he went on to tell my about his companies exclusive IDX and how it generates thousands and thousands of hits on their site for my zip code each week. At this point, it reminded me of being back in school, having to listen to my teacher, kind of like Charlie Brown and his teacher. It’s also kind of like when a woman is mad at you and she starts to raise her voice but, all of a sudden, she hits a particular tone and my ears start shutting down and before you know it, I can’t understand a word she is saying.

Finally, the spill is over and truth be told, I wasn’t buying crap but, I thought, let’s have a little fun here. Let me ask if maybe they can give me some numbers, specific numbers so, I asked, “How many leads a week can I expect to get?” Now, the preverbal crap hits the fan and he diverts the question and starts talking about how they have a wonderful motivational series and I will get a daily inspirational thought, inspirational message and once a week, a inspirational phone message / webinar. I was a little taken back because I have never really had someone completely ignore my question so, I asked it again, “How many leads can I expect each week?” He then tells me that the program can’t guarantee a number of leads because it’s all based on business need but, I will get these motivational messages regularly, I can attend training webinars they do monthly, etc… etc….

At this point, I am over it, I am spent so, I stopped him and said, “So you are telling me that I would primarily be paying for motivation?” The call got silent and as he started to talk some more, I ended the call with a nice, “Thanks but, no thanks……..click.

One of the members of this network gave me some really valuable advice once. It rang so true to me that even now, I hold it close and don’t steer away. We were talking about this same thing, these lead generation companies who really aren’t provided leads as they are providing something else, motivation, training, etc…. He said, “If you as the lead provider don’t have enough faith in the lead you are providing me to work, to take your fee at closing, why would I have faith the lead would ever close and why would I pay you up front for it.”

Food for thought?!?!?!?

Ok....so for the past few months, I have been hearing a lot
of people saying that their REO Inventory has been slashed or REO is really
slow....or...."a decrease in REO inventory" however, I would like to
suggest an alternative opinion.

First, let's talk about one of the earliest steps to
foreclosure, the NOD or Notice of Default. Now, I have looked everywhere and I
can't find a single source authority on just how many have been sent out
monthly since the start of 2011 as a nationwide statistic however, I did find some
interesting articles on many different websites that lead me to believe that
the NODs are on the rise. Granted, I searched like 20-30 different websites so,
I can't realistically quote each one however, the overall trend was most areas
have seen a steady or slight increase in the number of NODs each month. I did
see some articles where some areas have seen a decrease in NODs but, these were
really rare and seemed to be in areas where the average home price was well
over 250k.

My point above is, most of us haven't seen the numbers of
NODs drop significantly enough to see such a dramatic decrease in inventory.
Let's be honest with each other....how can we have a decrease in NODs when we
haven't really seen a correlated decrease in the unemployment rate? Yeah, I
said it.....and yes, it's obvious. If you don't have jobs...or job growth then
how can you see a decrease or even a leveling out of NODs? You can't....well,
you shouldn't anyways.

Now, what I do see happening, more and more is that many
homeowners are staying in their homes much, much longer than ever before. I
remember a time when I would do a relocation assistance negotiations and the
homeowner had only missed like 7 payments. Now, it's more like 24.....as a
minimum.

The sad truth of the matter is, regardless of how long these
people stay in their homes, regardless of whatever new "refinance"
plan the government can come up with, these people can't maintain a monthly
payment because they are too buys trying to find the money to pay their cell
phone bill, their electric bill, their car payment, car insurance, gas, bread,
milk, new shoes for little Jimmy and Susie, etc...

In short, yes....your inventory maybe shrinking...hell, it
my have even dried up but, it's not because no one in your service area is in
default, it's likely because the servicers and investors in your area are under
some type of regulations or "understanding" that if they don't want
to loose their FDIC insurance or be audited by the FDIC, they better slow their
roll on foreclosure and keep people in their homes....at least until after the
election that is.

So, how many agents are leaving the industry due to lack of
work? Have you ever stoped and asked yourself that question? Most likely not
but, I did this week because a friend of mine who owns their own real estate
brokerage told me that he is expecting that by the end of this year, his office
is going to shrink......so much so, that he may actually close his doors.

You see, many, if not all brokerages are built around
reoccurring revenue streams brought in by the agents. Obviously, I am not going
to go through every single office business plan I know of but, ultimately they
all revolve around either one of two...or both of these ideas.

Idea # 1: High
monthly fee and little to no commission split. These offices charge agents a
high monthly fee....like $500.00 a month or so and, yes...that is high in my
area. Now, these offices don't really care if the agents on their roster do any
business at all because, the broker is paying bills and making money off the
monthly fee. Normally, in these offices, the broker isn't making any money on
commissions anyways so, he is working for just that monthly fee.

Idea # 2: Low to
no monthly fee and high or graduates commission splits. These offices make the
bulk of their money on the performance of the individual agent. These offices
will typically charge little to no commission splits however, they typically have
a skeleton staff and expect the agent to be able to handle most all issues with
little to no broker involvement.

Now, as you can
expect, plenty of pros and cons with either major model however, what happens
to these models when the number of agents in the industry or in local markets
begin to dry up?

Well, the
competition for agents becomes more fierce and these 100% or low monthly fee
offices begin attracting a lot of agents. Much like we have now in my market.
The problem is these office typically attract the type of agents that most
people should steer clear of. Now, granted, this isn't true in every market and
this is strictly my opinion however, my experience is that before a agent truly
gives up on their business they go into the Realtor Death Spiral. Yes, this is
a phrase I just thought up.

So, what is the
Realtor Death Spiral? Ok...so, here it is. It's when you have a Realtor who has
been struggling the past few quarters and is now having to make a decision. Do
I stay in the business or do I go back to do what I know how to do? You see,
most Realtors, 99% of us, didn't grow up thinking...oh, I want to be a Realtor.
We grew up thinking, I want to be a fireman, a police officer, a marine or in
my case, a secret service agent...yes, that is true. My point is, we all came
from another industry and we either fell into real estate because we had a
friend who was selling their home or it was a part time "job" for
vacation money or...whatever reason you can think of other than, I want real
estate to be my career.  With all that
said, it means that many of us....almost all of us thought to ourselves, well,
if I can't make it big and live like Donald Trump, then I will go back to
teaching, being a stay at home mom or steel worker.

Now, let's look
at the graph above...yes, I pasted that in here for a reason. The graph is the
latest information I could find from the National Association of Realtors on
the number of Realtors by year. Look closely at the nose dive in the past 4
years. You see, the graph clearly shows that when real estate was good.....or
easy, people were becoming Realtors left and right. In fact, if you look at the
graph just a little closer, see how we doubled the amount of Realtors from2000
to 2006. That's right people, in 6 years, we doubled the number of people in
our industry. Now, consider that when I tell you that back in 2007, NAR release
a statistic that said something to the effect that 93% of all Realtors, DID NOT
CLOSE MORE THAN 3 DEALS A YEAR! In fact, I read at one time that the average
income of a Realtor was like $26,000.00....that's not even a million dollar in
sales in my area.

Well, I will
leave it up to you to come to your own assumptions and conclusions however, I
am of the mindset that our industry does need to do some "house cleaning"
if you will. In fact, I venture to say that as the housing bubble was blowing
up so was the rank and file Realtors and now, as the bubble is busting....those
same agents are looking at themselves in the mirror and saying, "Damn,
this is much harder, much more expensive, much more involved than I thought or
ever experienced it really was". Yes, we are going to start seeing a mass
exodus of agents from our industry, in fact, many of us in the industry have
noticed this for the past 2-3 years. I must admit, I am glad to see it.
Personally, I am sick and tired of dealing with agents who have been in the
business for 3,4,5 years, sold 3-5 homes a year, has a full time or part time
job in another industry and then complains that they want to do REO and no one
will help them get into the business or that they attended some conference but,
they had no ROI.

Our industry
needs to purge the part time agent. These agents don't do much for our
industry. Yeah, maybe they have a place and time but, it's not now. Now, we
need to get back to professional standards, common sense and the Realtors who
are here, participate, contribute and improve our opus.

Now, don't get me
wrong, people got to pay bills, people got to do what they got to do in a
country with an unemployment rate of 9.1% but, let's make sure we are all
looking at this with an ounce of perspective. Let's make sure when we see
brokerage office closing, or agents retiring their license that we stop and
realize, fortunes are made in times of recession and those who can survive
deserve to be here and reap the rewards of their commitment.

So, how many agents are leaving the industry due to lack of
work? Have you ever stoped and asked yourself that question? Most likely not
but, I did this week because a friend of mine who owns their own real estate
brokerage told me that he is expecting that by the end of this year, his office
is going to shrink......so much so, that he may actually close his doors.

You see, many, if not all brokerages are built around reoccurring
revenue streams brought in by the agents. Obviously, I am not going to go
through every single office business plan I know of but, ultimately they all
revolve around either one of two...or both of these ideas.

Idea # 1: High
monthly fee and little to no commission split. These offices charge agents a
high monthly fee....like $500.00 a month or so and, yes...that is high in my
area. Now, these offices don't really care if the agents on their roster do any
business at all because, the broker is paying bills and making money off the
monthly fee. Normally, in these offices, the broker isn't making any money on
commissions anyways so, he is working for just that monthly fee.

Idea # 2: Low to
no monthly fee and high or graduates commission splits. These offices make the
bulk of their money on the performance of the individual agent. These offices
will typically charge little to no commission splits however, they typically
have a skeleton staff and expect the agent to be able to handle most all issues
with little to no broker involvement.

Now, as you can
expect, plenty of pros and cons with either major model however, what happens
to these models when the number of agents in the industry or in local markets
begin to dry up?

Well, the
competition for agents becomes more fierce and these 100% or low monthly fee
offices begin attracting a lot of agents. Much like we have now in my market.
The problem is these office typically attract the type of agents that most
people should steer clear of. Now, granted, this isn't true in every market and
this is strictly my opinion however, my experience is that before a agent truly
gives up on their business they go into the Realtor Death Spiral. Yes, this is
a phrase I just thought up.

So, what is the
Realtor Death Spiral? Ok...so, here it is. It's when you have a Realtor who has
been struggling the past few quarters and is now having to make a decision. Do
I stay in the business or do I go back to do what I know how to do? You see,
most Realtors, 99% of us, didn't grow up thinking...oh, I want to be a Realtor.
We grew up thinking, I want to be a fireman, a police officer, a marine or in
my case, a secret service agent...yes, that is true. My point is, we all came
from another industry and we either fell into real estate because we had a
friend who was selling their home or it was a part time "job" for
vacation money or...whatever reason you can think of other than, I want real
estate to be my career.  With all that
said, it means that many of us....almost all of us thought to ourselves, well,
if I can't make it big and live like Donald Trump, then I will go back to
teaching, being a stay at home mom or steel worker.

Now, let's look
at the graph above...yes, I pasted that in here for a reason. The graph is the
latest information I could find from the National Association of Realtors on
the number of Realtors by year. Look closely at the nose dive in the past 4
years. You see, the graph clearly shows that when real estate was good.....or
easy, people were becoming Realtors left and right. In fact, if you look at the
graph just a little closer, see how we doubled the amount of Realtors from2000
to 2006. That's right people, in 6 years, we doubled the number of people in
our industry. Now, consider that when I tell you that back in 2007, NAR release
a statistic that said something to the effect that 93% of all Realtors, DID NOT
CLOSE MORE THAN 3 DEALS A YEAR! In fact, I read at one time that the average
income of a Realtor was like $26,000.00....that's not even a million dollar in
sales in my area.

Well, I will
leave it up to you to come to your own assumptions and conclusions however, I
am of the mindset that our industry does need to do some "house
cleaning" if you will. In fact, I venture to say that as the housing
bubble was blowing up so was the rank and file Realtors and now, as the bubble
is busting....those same agents are looking at themselves in the mirror and
saying, "Damn, this is much harder, much more expensive, much more
involved than I thought or ever experienced it really was". Yes, we are
going to start seeing a mass exodus of agents from our industry, in fact, many
of us in the industry have noticed this for the past 2-3 years. I must admit, I
am glad to see it. Personally, I am sick and tired of dealing with agents who
have been in the business for 3,4,5 years, sold 3-5 homes a year, has a full time
or part time job in another industry and then complains that they want to do
REO and no one will help them get into the business or that they attended some
conference but, they had no ROI.

Our industry
needs to purge the part time agent. These agents don't do much for our
industry. Yeah, maybe they have a place and time but, it's not now. Now, we
need to get back to professional standards, common sense and the Realtors who
are here, participate, contribute and improve our opus.

Now, don't get me
wrong, people got to pay bills, people got to do what they got to do in a
country with an unemployment rate of 9.1% but, let's make sure we are all
looking at this with an ounce of perspective. Let's make sure when we see
brokerage office closing, or agents retiring their license that we stop and
realize, fortunes are made in times of recession and those who can survive
deserve to be here and reap the rewards of their commitment.