Real Estate Predictions for the Next 10 Years

by Judy LaDeur

What an exciting time for recruiting!! I predict that the changes that are about to take place over the next 5-10 years in this industry will dramatically change the market position of real estate firms all across America. There are opportunities out there right now that have never been there before, and may never be there again. For many brokers out there it will be the opportunity they have been waiting for that will take them to the top, and those who are caught off guard, could find themselves losing millions of dollars in marketshare, in a very short period of time. What are those changes? NAR has released some very interesting statistics lately: NAR predicts that 50% of the agents, who are practicing real estate today, will leave the business over the next 5-10 years. Why? Many think its technology. And even though, to a degree it may be technology, the #1 reason that I believe we will see agents leaving the business is age. Look at these statistics. Median age of today's Realtor© is 54. Highest ever! Average age of the successful broker is 56 67% of brokers are 52+ years old 46% are 60+ years old 54% of Realtors© surveyed plan to retire between 55-70. What does that mean to you? I think it creates a wonderful recruiting opportunity that has never existed, and may never happen again. The baby boomer generation of Realtors© is about to retire. Thousands of very successful Realtors© who are currently earning 6 digit incomes, and selling millions of dollars of real estate will soon be leaving the industry. When they retire, that business is going to get dumped back into the general real estate pool of properties for other agents to pick up. A new breed of agent is already entering the market place, and you, the brokers need to get ready. First, let's take a look at how it will impact the current companies in the marketplace. Let's say that a fairly large company loses 10 good agents in one year with an average production of 5 million each. That is 50 million in business that gets lost in a single year!! That same company needs to recruit existing agents who are currently handling 50 million in business just to stay the same. Many of these companies have focused on hiring new agents in the past. Those companies will soon begin to see that without a focus on hiring the existing agents, as well, they will begin to lose their market position.  In fact, any company who consistently loses millions of dollars in business each year, without replacing it, will begin to drop in market share, and ultimately go out of business. I am already hearing stories of large firms, who are concerned because they recruited the same number of agents this year as they lost, but their market share is slipping, and they are losing money. Why? This business is no longer a numbers game. There was a time when you could replace what you lost and be OK. That is not necessarily the case any more. Now, you need to track the production of the agents that you lose, and compare it to the production of those who you are hiring. I am not saying that the new agents are not important, but the closed production of a new agent in their first year is not always that great. So, what should you do? On a quarterly basis, you should look at whom you lose, and compare it to those that you hired. Take the production of those you lost and total it up. Then add up the production of the agents that you recruited, and look at their production. With new agents, you need to wait until they have closed production to begin counting it against your loss.  Are you moving forward in the marketplace, or are you losing ground? If you are losing ground, then you must focus on the recruitment of existing agents. How vulnerable are you as a company? Look at the current agents that you have. What percentage of your top quartile are 50 years old, or older? How productive are your new agents in their first year? What systems do you as companies have in place to recapture that business as they retire? The companies that position themselves now, with a plan to capture and recapture their market share will come out the winners over the next 5-10 years.   But you must start now. As you know, effective and consistent recruiting is just like farming. Why Farming? Farming is the best way to maintain contact with a large group of agents and to insure that when they become unhappy with their current broker, and decide to make a move, you're the one they think about. You need to educate them about your systems, your opportunities, and how you can take their career to the next level. You need to talk to the agents on your hit list on a regular basis.  My recommendation is one hour of calling, three days per week. You should conduct 2-3 interviews per week to hire an average of 2-4 agents per month.   You also need a system that allows your retiring agents to retire, and to allow them to collect a royalty on their business. This is the key to recapturing your business. Keep in mind that any company that is not prepared to capture the business of their retiring agents could find themselves in a very vulnerable position, which would make it far easier to recruit additional agents. Each situation is unique however. For information on how to set up a system that allows agents to Retire with a royalty in your office, please give me a call.