Mortgage Refinance Resources

Real Estate Market is Cooling

A slump in house sales coupled with fierce competition among brokers is forcing many new agents to rethink their career plans. Even in better times, area brokers say, only one in four new agents make it past their first year in the business. Those who stick it out often keep a second job to pay the bills.
Tempted by the boom, a record number of college graduates, retirees, housewives, and laid-off executives jumped into the real estate game last year, before sales started to slip. State records show that 9,547 people obtained licenses to sell real estate in Massachusetts in 2005, up 6 percent over the previous year. Today, there are more agents in Massachusetts than at any time in the past seven years, said Chuck Borstel, spokesman for the state Division of Professional Licensure.
A lot of people saw real estate as an opportunity to use their business skills and make a lot of money, but things today aren't what they were a year ago. Back then, buyers didn't quibble about price or inspection issues because there were 10 other buyers lined up behind them to purchase the property.
Today, there's one buyer for every five or 10 houses, so the job has become a little more stressful. Though there's no standard for commissions, realtors say a 5 percent commission is common. But of that, multiple agents involved in the transaction could each pocket as little as 1 percent, with the remainder split between their respective brokerage firms.
New agents often have to pay for their mailings, business cards, and some specific open-house ads and glossy broucheres, even the cookies or rental furniture at the showings. And they have to reach into their pocket, before they make a sale or establish a broad network of prospective clients.
Buyers now have the upper hand, and they know it. Many buyers are sitting on the sidelines, waiting to see whether prices will fall as the busy spring selling season draws closer, she said. As a result, homes are lingering on the market longer. For many agents, that means the time between paychecks is also growing.
Real estate is never an easy profession to break into. For every four people who become an agent, only one survives in the business long enough to renew their license the second year. A lot of people think they'll be good at selling real estate because they like looking at homes, but that's not really what this business is about.
The agents who are having a hard time now are the ones who got into this business when homes were flying off the market and it was easy to hold a deal together.