March 2018

Will The Lack of Inventory Be the Real Estate Agent’s Downfall?

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Sales, like many high income potential careers, has always been competitive. In the residential real estate industry, where the value of homes sold is expected to exceed $2.5 trillion in 2018, market conditions are going to contribute to competitiveness for both real estate agents and homebuyers alike to reach their goals. For the first time, that I am aware of, there are more active Realtors than there are active listings to begin a new year. (See graph below. Data from and NAR monthly membership report.)

The number of Realtors is slightly down from the peak of real estate market in 2006, but the inventory levels continue to decrease. We are now entering the 11th straight year of single family home construction being at historically low levels. (See graph – info from Census Bureau)

This decade of low activity in single family home construction is now affecting the 4+ million millennials who will continue to turn 31 (current average age of first time homebuyer) every year for the next 10 years. Prices will continue to rise and increase at a higher annual rate than wages. The good news is that unemployment is down, but wages are not growing at the same pace as housing prices. The projection for an 8% increase in 2018 of single family construction still leaves a big shortage and is lower than the actual building that occurred during the 1980 recession when unemployment was at 7.5% and would grow to 10%.

While financial advisors debate whether a home is a good investment, I’ll end the argument for them – it is. The median net worth of 65 year olds in this country is $194K, if you take out the equity in their home that drops to $43K. More importantly, the house is not a commodity, it’s a home that gives people freedom and is a part of the majority of American’s idea of living the dream. New business entrants need to enter the discussion with local and national government agencies on how to get more single family entry level homes built. That is currently not happening.

Knowing the competitive landscape, what should you do as a real estate professional who wants to grow their income in 2018? A massive amount of money has been invested in companies looking to change the dynamics of the real estate relationships between consumers and agents, and brokerages and agents. The quality and sources for accurate housing data for consumers continues to improve and is becoming easier to access. The consumer with the iPhone is in charge. But who will own the relationship to assist them with the biggest and most complicated investment in their life? It should remain the local, micro market expert. Potential homebuyers and sellers will do a lot of research, however, research doesn’t equate to knowledge and taking action to buy or sell.

What agents need to do immediately is have an aggressive plan to market themselves on social media (Facebook, Instagram, LinkedIn, Twitter), as well as through traditional online sources, and take massive action to build their local brand. If they wait, others will take advantage of their lethargy and position themselves as the go-to source for navigating the home purchase, and in the best scenario they charge the agent a 35+% referral fee. The worst case scenario is the new entrants keep them as their real estate customer. Forget the noisy discussions amongst the largest brands about who is going to own the real estate data. The reality is that agents who have owned the real estate consumer relationships have up to three years to make a commitment to establish themselves as the micro market expert and own their database. Who is going to succeed in the low inventory/high tech world? The agents who build, own and invest in building their brand reputation, will remain the trusted source.

This is your road map. The question for agents to ask themselves knowing this to be the true path is: Who Do You Want to Be in Real Estate?

5-4-3-2-1, Go!

All the best in investing in yourself!


Viva United

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I want to personally thank all of our coast-to-coast attendees, our sponsors, brokers and agents from our host city, the great speakers and the United corporate staff who made the 2018 United Real Estate Convention a high-energy, impactful event! There is no question that United is a company filled with passionate, driven individuals who are willing to take action to improve their business, improve the lives of our families and the communities we serve.

We strive as a company to be different – and that starts with the relationship we have with our agents. We partner with our agents to not only sell real estate, but to help them create a lifestyle that is based on who they want to be. Other companies have focused their training by asking “What do you want to do (in sales)?”  This question revolves entirely around a financial number. A better way to ask this question is to say, “Who do you want to be?” and then build a business and plan around the answer.

Determining who you want to be and developing yourself will put you on the one true path to long-term success. In the 24/7-connected world of iPhones and social media, the entrepreneurs who will prosper are those who are sincere, trusted and liked. Being authentic and true is an important part of that equation. So, start taking action towards who you want to be, be genuine, and the rest will fall into place.

To quote Mel Robbins, our Viva United Keynote Speaker: “If I have a problem that can be solved with action, I don’t have a problem.”

Next year’s convention is in Nashville, Tennessee – and it’s one you won’t want to miss. We will continue to raise the energy level of the event and the growth opportunities for our brokers and agents. Look for pictures and videos to be posted soon to recapture the fun!

All the best,