Market Overload: Report Reveals Surplus of Agents in Real Estate

In their report, “A Surfeit of Real Estate Agents: Industry and Consumer Impacts,” the Consumer Federation of America (CFA) sheds light on a pressing issue in the real estate industry: the overwhelming number of agents. This surplus, as detailed in the report, is not just a numbers game; it’s a matter of market efficiency and service quality, deeply affecting both agents and consumers in markets like St. Louis.

While I may not always agree with the Consumer Federation of America’s views, including certain aspects of this report, many of their points echo my own observations at MORE, REALTORS®. We constantly strive to enhance our agents’ education and consumer knowledge, while also improving service quality for home buyers and sellers through innovative technology. This proactive approach in real estate brokerage sets us apart, enabling us to anticipate and address potential industry issues, often identified by external observers like the CFA, before they escalate.


Some of the problems identified in the report, with each point followed by my thoughts,  are:

  • Agent Over-saturation: The influx of part-time agents has saturated the market, impacting incomes and service quality.
    • The recent strong sellers’ market created a misleading ease in real estate success, attracting numerous new agents. As the market normalizes, many realize the need for deeper knowledge and commitment to provide professional service. At MORE, we understand this isn’t just about numbers; it’s about upholding excellence.
  • Professional Development: The report emphasizes the importance of continuous professional development and specialization to differentiate full-time agents from part-timers.
    • I wholeheartedly agree with the report’s emphasis on continuous professional development. At our company, I lead weekly online coaching and training sessions, attended by our agents. We don’t just stop at a salesperson’s license in Missouri; we encourage further education, including obtaining a broker’s license and professional designations, to demonstrate our commitment to excellence.
  • Technology and Efficiency: Utilizing technology to enhance efficiency and reduce operational costs, thereby allowing full-time agents to remain competitive and profitable.
    • While the report discusses technology from an agent profitability standpoint, I view it as a tool for providing more data and resources to clients efficiently and effectively, thereby maximizing the value delivered by our agents.
  • Consumer Education: Educating consumers about the value of experienced, full-time agents to ensure better service quality and market efficiency.
    • This is a crucial area for me. For over 14 years, I’ve been actively writing articles and sharing insights on St Louis Real Estate News, aiming to educate both consumers and agents. An informed consumer base leads to better decisions, rewarding high-quality, professional agents.

In conclusion, the CFA’s report “A Surfeit of Real Estate Agents: Industry and Consumer Impacts” illuminates significant challenges in today’s market, particularly the glut of agents. At MORE, REALTORS®, we’ve been proactive in addressing these issues through continuous professional development, technological advancement, and consumer education. Our approach isn’t just about adapting to current trends; it’s about setting a higher standard in real estate service. As we navigate these industry changes, our commitment to excellence and informed service remains our guiding principle, ensuring we continue to deliver unmatched value to our clients in St. Louis.


A Surfeit of Real Estate Agents: Industry and Consumer Impacts

(click on image below to view entire report)

A Surfeit of Real Estate Agents: Industry and Consumer Impacts

Do you need a buyer’s agent when buying a home in St Louis?

Earlier this week I wrote an article addressing some of the current issues that will likely significantly impact the residential real estate business.  IIn the article, I suggested that, as a result of the various challenges to present-day practices, sellers may no longer be required to pay commissions to the buyer’s agent in the near future.  Does this mean the role of the buyer’s agent in a transaction is going away and that buyer’s agents are not needed?  The short answer is no, buyer’s agents are not going away.

So, buyer agents won’t be impacted by these changes?

Wait, I didn’t say there no impact or effect on buyer’s agents, I said, generally speaking, they are not going away. However, this doesn’t mean that there won’t be real estate agents leaving the profession as a result of not being prepared, able, or willing to deal with the changes. Some agents will leave the profession because, quite frankly, with the change in the way buyer’s agents are compensated, they will find that there are not enough people who see value in paying them to represent them. I know this sounds a little harsh, but I’ll explain what I mean in more detail below.

The bar will be raised…

While my earlier statement sounds a little harsh, I think the reality is that agents that are not committed to this profession, lack the knowledge and skills they should have and don’t deliver the level of representation and service they should to their clients, are going to find it hard to survive in the business in the near future. As transparency increases on how buyer’s agents are compensated, particularly when it becomes known that the compensation is either coming directly from their buyer client or indirectly from them, buyers are likely to be more selective about the agents they choose to work with. Some may argue that buyers may opt to forego having a buyer’s agent and deal directly with the listing agent instead to save some money. I will address that in more detail later, but for the most part, I don’t think that will be the case. Instead, good agents, those who know this business and the market and are true professionals with their clients’ interests at heart, will be rewarded.

 

Continue reading “Do you need a buyer’s agent when buying a home in St Louis?

St Louis Real Estate Market Update VIDEO – February 2021

The St Louis real estate market has started off 2021 strong, but is a change coming?  Closings of home sales in January were strong with more sales closing than in January of last year, but with everything going and the uncertainty of the economy will it continue?  I address both the current state of the St Louis real estate market, as well as discuss our “leading indicator” data which gives us a glimpse of where the market is headed in the St Louis Real Estate Market Update video you can access below. [xyz-ips snippet=”Market-Update-Video-Package”] [xyz-ips snippet=”Seller-Resources—Listing-Targeted”]

Why Accurate Home Price And Sales Data Is Vital To Buyers and Sellers

I’ll concede the fact that not everyone is as much of a data geek as I am and, in fact, a more accurate statement would probably be that most people are not, including the majority of home buyers and sellers.    Sure, home buyers and sellers are interested in home prices and what the potential value of the home is they are looking to buy or sell, but most leave the real data analysis to their agent.  After all, part of being a professional real estate agent is knowing the market as well as knowing how to research the market and apply market data to their client’s situation.

However,  don’t assume all real estate agents are created equal in this regard and that they all know the market as well as they should or do the research they should.  There are many great agents that do these things very well but there are a bunch, probably an equal number, if not more, that don’t.  Even the agents that do it well are still limited to the data resources they have available to them.

The MLS is the best source of market data...

Continue reading “Why Accurate Home Price And Sales Data Is Vital To Buyers and Sellers

How Many Real Estate Agents Are There And How To Find a Good One?

According to the latest estimates by the National Association of REALTORS® (NAR), there are approximately 2 million licensed real estate agents in the United States.  Last year, according to the NAR, there were a total of 5.341 million existing homes sold which equates to one agent for every 2.67 homes sold during the year in the U.S.  Wow, talk about competition!  Granted, not all licensed agents sell residential real estate as many focus us on commercial real estate, including industrial, retail, office, multi-family, and land, and others focus on farms, large tracts of land, recreational property, etc.  Nonetheless, there is still a lot of competition in the real estate industry.

As of last month, there are 1,327,880 real estate agents that are members of the National Associaton of REALTORS® (NAR) and, according to a survey done by NAR of its membership, 70% of their members (929,516) list residential real estate brokerage and their primary field of practice.

How to choose a good real estate agent….

One question that is frequently asked by people interested in buying or selling a home is how should they choose a real estate agent?  You can find extensive information on how to choose a good agent at AvoidBadAgents.com, but below is a list of questions to consider asking an agent you are considering working with:

  • Are you a full-time real estate agent?
  • Are you a REALTOR®?
  • How long have you been an agent?
  • What professional designations and industry awards have you received?
  • How do they communicate?
  • Do they know technology and does their firm use it for your benefit?
  • Ask to be walked through the sales transaction.

[xyz-ips snippet=”Agent-Resources”]