All Forum Posts by: 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.

@Ashton A. Moore. I own a Row Home in the Medfield section of Baltimore.  I purchased mine and had similar issues, and as @Andrew Freed says these are common.  Depending on location in Baltimore the tenants probably won't even notice those electrical issues.  The one I am most concerned with is the moisture stain, were they able to figure out where that is coming from?  The roofs on these things are small, and many have the skylight in the bathroom which often leaks, I would tighten up the roof, then address the plumbing issues then move onto the electrical.  The key on this is the LOCATION, as you know Baltimore is made up of neighborhoods and they all have their own unique characteristics.  Make sure you are buying where you want to buy, not just because you are getting a deal on a house.

For Worcester normally I do about even in Multifamily on and off market. This year I have done 3 on MLS, 3 off MLS and have 4 more under contract off MLS. That makes me feel that I will be 2 off market deals for every MLS deal in Worcester

These number are interesting as that inventory of Multis is low. Historic average is about 60 buildings for sale at any time, so we are way down. What we are seeing is that there is more off market activity going on. People are only paying appraised price for properties so sellers are simply finding someone off market to pay appraisal price and not have to show the properties at open houses and disturb the tenants. The other interesting statistic worth looking into is the number of residential rentals for sale in Worcester. Typically there are about 20 units listed for rent at any given time on the MLS over the last 5 years or so. Right now there are 103 apartments listed for rent. THAT IS A HUGE NUMBER. This shows that there are buyers for the multis, but at the same time those new owners appear to be picky about the tenants they choose.

@MinhoLee I would be glad to help you find something in Millbury/Grafton/Worcester/Shrewsbury.  I live in Sutton so I drive these towns on a daily basis.  Price wise, Millbury and Worcester will be the lowest entry point as they have smaller houses

@Colleen F. I disagree about the walkability of Worcester to the hospitals.  There are 3 hospitals that make a triangle between Shrewsbury Street and Belmont Street.  Inside that triangle there is a lot of walkability and rentals.  On the West End of Shrewsbury street by Union Station you have Alta on the Row which will come on line in the next 6 months, from here you can walk to Saint Vincent's hospital very easily along with MCPHS.  What people don't realize is that there are a lot of 3 deckers in that Triangle as well.  Yes you have to pay a premium but you can buy them.  There are a lot of owners I know that will sell, but these properties have value so they need 1031 purchase targets before they let them go.  @Aline Elad my recommendation for anyone looking to do this is to find a local realtor who sells in that area. They will be able to find you stuff. Most of the good stuff trades off MLS so you need a realtor who is tied into the local investors

@Steve Tse, I welcome the public discussion about this, and it is good that you understand that Worcester is heterogenous and there are neighborhoods.  The reality here is that certain people want to be in certain neighborhoods due to location and where they grew up.  They like their shops, and their restaurants.  Then there are the people who are moving to Worcester, and they want something different, maybe more like what you are inquiring about above.  I am also interested to see what others say about the city.

In Worcester, I think your numbers are pretty close, but there are also a lot of Programs between Mass Save, and the City of Worcester that will pay for many of these things if you agree to an income restriction, or sell income restricted.  Also, if you shop around you can do better on some prices.  But I try to encourage my clients to value time to market.  If you hit the ground running you can turn a unit or a building around quicker and get yourself to renting sooner.  Some people are trying to save $10k on the project but it cost them 2 or 3 months and they have a lot of time on task, and a lot of personal overseeing.  I DON'T THINK IT IS WORTH IT.  DO THE PROJECT AND GET ONTO THE NEXT ONE.

@Aline Elad. It is good that you are checking the areas prior to purchase.  What I have observed in Cities like Worcester, MA is that certain areas end up with more crime but it is very isolated.  Yes some areas have better statistics but as a whole crime is general to the area.  And comparing Worcester to other cities of similar size, (Hartford, Springfield, Providence) and even smaller cities (Lawrence, Fall River, New Bedford, Brockton) you will see that overall crime rates are low.  Once again it is good to check the statistics, but as Mark Twain paraphrased from Benjain Disraeli,  there are "Lies, damned lies, and statistics". Best of luck in your search.  Best to have a local realtor to help you out.

Great job.  It is good you were able to learn and make money.  There are contractors in Worcester that can turn something like that over in weeks so you can be collecting $ right away.  And some of the contractors will hold paper as well.  That might be worth exploring next time you have a project.