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In this monthly column, Anthony Askowitz explores a hypothetical real estate situation from both sides of the broker/agent dynamic. Askowitz is the broker-owner of South Florida’s largest RE/MAX office, and a working agent who sells more than 100 homes each year.
This month’s situation: In a market where listings are still scarce, a mid-career agent is having difficulties. Competition for listings is fierce, and buyers are walking away from contracts. Although the agent hopes to stay in the business, she has a family to support and has no prospects for income in the next six months. What can the broker do for agents in this position, who are completely strapped for cash?
Agent perspective
I can’t believe that after seven years in the business, I am wondering if real estate is really for me. I love what I do, and believe in the value I bring to all those I represent. Real estate was proving to be the most fulfilling of careers, with results both financially and psychologically proportionate to the efforts I put in. I took classes, got a mentor, did my homework and stuck to a plan. Then — the whole world turned upside down.
The past three years have been brutal, and expenses are continuing to go up even as income goes down. I was smart to have budgeted in my early years to see me over the typical two years of building a business, and it paid off. Year three was incredible, and I was sure I was set for life. I had learned how to roll with the ups and downs of a “normal” market — which we haven’t seen since 2019. What do I do now?
We all know that listings are key to success in real estate. Before the pandemic, I had modest success in getting family and friends to list with me, but they won’t be ready to sell again for years.
Property owners are staying in their current homes longer and simply remodeling rather than selling. The few who do sell have top producers beating down their doors in droves. How can I compete? My name just isn’t as recognized as the ones with yard signs on every other street.
I am at a crossroads and need to make a decision. While I know real estate has huge potential, the cost of living has increased way out of proportion to what I had budgeted, and I have a responsibility to my family. What can I do?
Broker perspective
Stories like this break my heart. I know how much effort this agent has put into building her business. She could be the poster child of what every broker looks for in an agent — smart, dedicated, ethical and persistent. I am glad that she reached out to me before just taking a second job though. Others have tried to keep the second job a secret, and by the time we found out about it, they had lost too much traction to be able to regain it and ended up leaving the business.
The first thing I would remind this agent is that there really is no such thing as a typical real estate market. By nature, real estate is cyclical. That being the case, there will definitely be light at the end of this tunnel for her — if she holds on.
The market seven years ago was a perfect storm for agents just entering the business. Property values had just begun to increase in the double digits again for the first time since 2008’s crash.
Buyers who had never been able to afford to purchase were grabbing the low-interest loans and competing for properties. Sellers, stunned at the profits they could make on properties bought right after the crash, were suddenly seeing dollar signs and jumping at the chance to list.
But things have definitely changed. Historically low interest rates are still available, but they are no longer low enough to motivate buyers who are on the fence. Increasing taxes, insurance, maintenance fees — there are many new issues an agent faces when counseling buyers these days.
Sellers who got into their homes with historically low interest rates are not as eager to sell, even at a high profit, when they cannot replace their home with loan payments comparable to the ones they have now. The agents of today must have increased knowledge, skills and patience to successfully guide modern buyers and sellers.
How to resolve
Sometimes, an agent can become so caught up in the emotions of struggling between duty to a career and duty to the family that they cannot see the obvious way through. In truth, the family must always be first. Still, the career is the source of ability to care for the family. Therein lies the focus as to how to keep the two responsibilities from clashing.
Once it has been established that the career is critical to the family, and that concept has been accepted by the family, conflict will be minimized. Instead, the family can become a much-needed instrument of support, both in practice as well as in theory.
The agent can encourage participation in activities that do not require a license — marketing, staging, handing out flyers, etc. When the family becomes involved, the agent’s need to put more time into her business during this dry time becomes less of an issue. The common goal creates an even deeper bond.
So, how can the broker help? A counseling session to determine what exactly is causing the barrier to success is the first step. In this case, the agent is blaming it on not having a recognizable name/face due to a lack of current listings. The broker may consider allowing the agent to market listings of another agent.
Some companies are set up with the sharing of marketing rights within the company, while others only allow it with listing agent permission. Either will provide this agent with access to opportunities to get in front of others via marketing materials, open houses, etc., all while benefiting the listing agent with additional marketing at no cost.
Other opportunities can be found by becoming involved in local organizations. Volunteering for charities, committees and events allows an agent to meet people with common interests and costs nothing but time. This agent has school-aged children, which opens the door to participation where connections that can last a lifetime will be forged.
The real issue in this scenario is the momentum has lapsed, and the agent needs to get back to basics. If she can rekindle her belief in herself and ride out the down cycle, what worked in the beginning of her career will work again.
NOTE: Anthony Askowitz is not an attorney and does not give legal advice. Please consult a licensed attorney regarding matters discussed in this column.
Anthony Askowitz is the broker-owner of RE/MAX Advance Realty, with offices in Hollywood Beach, Davie, Miramar, North Miami, South Miami, Kendall, and the Florida Keys, where he leads the activities of more than 190 agents. Follow Anthony on Instagram.
