BROKEN MODEL: 49% of U.S. real estate agents either sold just one home or none at all last year

PHOTO: Image by rawpixel.com

A recent study by the Consumer Federation of America, released on Wednesday, reveals that the majority of U.S. real estate agents sold five or fewer homes in the past year. Approximately half of them sold either zero homes or only one.

SPONSORED: All You Can Eat – Database Deal (limited)

The report, titled “A Surfeit of Real Estate Agents 3: Abundant Jobs, Inadequate Mentorship, and Few Sales,” underscores the presence of a “glut” of over 1.5 million agents nationwide, contributing to a range of issues such as inexperience, an inability to sustain solely on sales commissions, widespread incompetence, and pressure to maintain high commission rates.

Too many U.S. real estate agents in the housing market | WATCH

Steve Brobeck, a CFA senior fellow and the report’s author, emphasized the negative impact of incompetent agents on consumers, from missed sales opportunities to disadvantageous sale prices and problematic homes.

The National Association of Realtors (NAR) is imploding

The report points out that the ease of obtaining a real estate license exacerbates the problem, with 26 states, including Washington D.C., not requiring a high school degree to become a real estate agent. The median expense to obtain a license is $600. The report characterizes the residential real estate industry as “a part-time industry,” with most agents working sporadically and holding other jobs.

1 million real estate agents could disappear in the U.S.

The study sample included 2,000 agents in 20 major brokerages, examining the annual number of home sales of 100 randomly selected agents in four urban areas. The data showed that 49 percent of agents in those areas sold either zero homes or only one in the previous year, and 70 percent sold five or fewer homes. The report concludes that the industry needs higher standards for training and overseeing new agents to enhance competence and reputation.

Special Offer – Profile your business online for 12 months | ($499 plus gst)

To address the issue, the report recommends steps for state legislatures, the National Association of Realtors (NAR), and individual brokerages. It suggests closer broker supervision of inexperienced agents, post-licensing education requirements, and raising the bar for becoming a Realtor to differentiate inexperienced agents from full-time professionals. The CFA calls for the industry to set higher standards for training and overseeing new agents to ensure a smoother sales process and benefit consumers.