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Leigh Thomas Brown's avatar

Those of us who have lived through tough markets before are more than willing to share insights for surviving and thriving.

Education and honesty are the keys. Sadly? Those two items are hard paths for many agents to admit they must pursue.

2007-2011 were my best years of my 22 year full time career. I look forward to the culling of the herd again.

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Edward Lange's avatar

My mother has been in high end real estate around Seattle for over 25 years, routinely sells 2m+ houses and has been through both of the major downturn after the dotcom and the financial crisis. Her take is for stabilizing prices with slowing sales in her market and, for what it’s worth, I tend to agree. There are 200 some licensed agents in her area and yet she has around 60 % of the listings at any given time. There are two valuable take aways from this and a caveat to follow.

One, people return to good established agents, time after time, and especially in the high end. There will likely be a large drop on the price of starter homes because these were the most over bid by the young buying population that correctly thought the time was now or never but upper and middle markets won’t budge because the buyers wont have to, the owners are less likely to lose their jobs in the coming white collar washout of junior workers, and they’re sitting on sub 3% mortgages only a fool would leave when inflation is as high as it is. Remember, houses do well in inflationary times. All the more so if you borrow $1 million plus dollars at 2.5%.

Second, if you want to crush it, be ready to grind for a long time. Sorry to say it, but if you got in during the last few years with hope of a grand income, you should probably get a different job. The old folks won’t be giving it up. And here is her caveat to new agents: there was already a movement underway to reduce commissions before all this happened. Expect that trend to continue if housing prices stabilize at these rates. 3% made sense a decade ago. Unless prices really drop it makes no sense for people to continue paying the commissions we historically have. There is also a lot of good economic research showing that agents work harder and get higher asking prices on their own homes vs. when they work for others and it just makes sense. They make money on selling. Why hang in there for another two weeks to a month for another hundred thousand to the seller on a million dollar sale when there is a $30,000 dollar paycheck waiting? I wouldn’t and most of them don’t either. When houses were selling themselves and bidders were competitive, this wasn’t an issue. It’s going to come back with a vengeance now, as will the smart people questioning the value of paying this kind of rate. My mother said she’ll retire when that finally goes down. I’d think heavily about that if I was a young up and comer.

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