Should all the realtors quit? And let the buyers and sellers do it on their own?

[Brian J Allen]

I wasn't surprised when I stumbled upon an article in my news feed this morning titled "Realtors 'Running out of Money'." It sheds light on two critical issues affecting the industry.

Read article here.

Firstly, there's been a noticeable decrease in transactions. Higher interest rates have made it difficult for buyers to secure loans, while sellers are hesitant to part ways with their fixed-rate mortgages. Consequently, there are fewer commissions available for real estate agents.

Secondly, there's the looming lawsuit against the National Association of Realtors (NAR), which threatens to squeeze the commissions that end up in the hands of buyer's agents. Traditionally, these agents, often younger and less established, educate buyers about market nuances, show properties, and represent them in offers. Their compensation typically comes from the cooperating agent's commission upon a successful purchase.

The NAR lawsuit will essentially remove the automatic buyer agent commission from the MLS. This will make it necessary for Buyer's agents to provide potential buyers with that contract for payment of their services prior to working with them. It may be hard for some less experienced Buyer's agents to show their value to their potential clients.

The numbers are not surprising either.

Real estate agents in 2019        549,000

Real estate agents in 2023        440,000

I think they should probably qualify these numbers, as these really are the ones WORKING AS AGENTS, there are believed to be 2,000,000 licensed real estate agents in the country, and 1,548,058 Realtors (members of the NAR) as of January 2023

Did you know that the most common number of deals an agent does in a year is zero? It's not the part-timers who are quitting but those who sought a full-time career in real estate.

The article suggests that while some agents may struggle to make ends meet, those who excel will endure. It's a matter of survival of the fittest in the industry, with good agents staying and others seeking alternative employment.