Future of the Real Estate Agent?

Question

Hello everyone, I'm in need of some guidance. I'm currently a junior (16) in high school, and I've been considering becoming a real estate agent.

For me, being a real estate agent would be the perfect career:

- I just love real estate

- I would get to interact with those in my community and form new relationships

- The income is scalable, and how hard and smart I work directly correlates to income

- I would get to create my own schedule to a certain degree

- Access to the MLS

Being a real estate agent would combine my two favorite things: real estate and selling. I know that it would be hard, especially at first, because of market saturation. But that isn't what is holding me back.

It is almost certain that the occupation will be a target of automation. We already see this becoming more the case. One day, the majority of home transactions might be completed without an agent representing either party. I highly doubt that all real estate brokers will lose their jobs. But the future seems very uncertain. Those who are able to adapt will be the ones who survive.

My questions are as follows:

1. Is it foolish to consider a career as a realtor at this time?

2. How can you adapt so that you aren't left out in the cold?

3. Will the need for a real estate agent be erased? (and if so, when?)

4. How will the roles of the real estate agent change in the future?

Thank you.

Russell Brazil · Answer

Everyone always thinks the demise of the industry is coming....yet it never happens.

We as agents get why we havnt disappeared....because people dont buy houses like they do products on Amazon.  Its an incredibly hard, emotional, fearful process.  People are just plain scared of buying and selling houses.  Now the people on this board, because they do it all the time, have a skewed view of it and think its very easy. For them it is, for 99% of the population, it simply isnt.

That being said.....87% of people who try to become an agent, fail out of the industry altogether.  Of those making a living at it...the median income is only about $45k per year. 90% of all houses sold in America are sold by the top 1% of agents.  Think about that, about 14,000 individuals control 90% of the entire market.  Its a cutthroat business. I love it, Im successful at it. But understand being successful at it is statistically a very low probability. Decide early how not to be part of that 87%....then decide how not to be median.

Christian Cramer · Answer

Here is what I just replied to other thread with the 19yo wanting to be an agent-

Do it. I got my license when I turned 18 and still in high school.

I turned 21 last week, and have had over 45 closings here in Maui, condos and homes. Many sales over 1m.

I've made great connections, hell I even sold a house to a certain biggerpockets celebrity that was a personal idol of mine and who's books pretty much got me interested in real estate. I could write paragraphs on what I did and all the people that said I couldn't do it. Main thing I can say is to learn all you can, and since you are young, you will need someway to build trust with people and be viewed as an authority. I did that by starting a REIA meet-up and spending all of my time here and reading books.

To answer your questions because I really want to see more young people become realtors -

1. No, but you need a solid plan and goals, and understand that your success depends entirely on what you do.

2. You need to specialize when you start out. However, the average agent literally has no idea how to invest in real estate. I am probably being a bit mean, but seriously, you already probably know 10x more than the average middle aged realtor I encounter on a daily bases. Seriously, most agents are the "Do you like the color of the walls?" type of agents and can't provide any valuable information.

3+4. The "threat"  is that big companies like zillow/redfin/google will come up with some AI to replace us, real estate is hyper local though and there are many reasons why it will be a tough and slow transition, if it was to transition. Buyers agents probably not going anywhere soon, selling agents will see reduction in commission though. The 6% commission structure is changing , it made sense when houses were 100k, but not now. My entire model is around 1% sales, and buyer rebates (Giving my buyers half the commission at close)

Account Closed · Answer

Thank you for the response! If I may ask one more question, what do you mean by specialize? Should you focus on specific types of properties (luxury, investment, condos, "normal" SFR, etc.), or buying, selling, leasing, or certain neighborhood classes, or something else, or all of the above?

Christian Cramer · Answer

Specialization can be any of those things. What I meant personally, is specialize in a geographic area, and become the "master" of that area, and a few asset classes in the area. Once again real estate is hyper local so it really depends on your area and where you can provide value to the consumer. (consumers being buyer/sellers of real estate in that area)

For myself as an example, I consider myself to know Maui County inside and out, and the islands that comprise Maui County. Maui, Lanai, Molokai. I started out by really learning the market, what people want in the market, and what motivates people to buy and sell in the market. I also learned what the typical cap rate is in my area, what a good rental looks like, what a good flip deal looks like, etc. Then I started a real estate meetup because there wasn't one in my area, and went from there by providing actual value to people in the form of local market knowledge. I would say now "specialize" in everything Maui County, vacation rentable condos, luxury homes, multi family rentals, etc.

It really depends on your market, feel free to PM me

Rob Massopust · Answer

I thought the same thing when I was about to get my license in 1998, it was just about the time Priceline.com was replacing travel agents and I thought it was only a matter of time before real estate agents get "Pricelined". Being an agent takes work and is hard but there will always be some degree of agents needed in the transaction even in 50 years, I think.

If you are young and just starting out learn what you can, find someone that is investing and doing deals. Maybe you can find someone that is doing a flip and volunteer to help. [I started working with a house flipper when I was 15, I was 23 and managing several shopping centers while still going to school. Got my license when we were trying to buy a 4 unit and realized I knew much more than the agent.

Keep at it and keep us posted.

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