On January 8, 2008, there was a blog posting here that caused quite the firestorm. In that post it was stated that it sure seemed to us like the National Association of Realtors had decided not to answer the bell and was in effect commencing a going out of business sale. Well today, there’s more evidence that the end for many in the industry, may not be that far off after all.Â
Early this evening, a couple of interesting news items were made available that seem to serve to underscore the demise of the real estate business model as we now know it.
First, the trial date for the Department of Justice lawsuit vs. the National Association of Realtors was set for trial. The NAR attempted to have the case dismissed but their request for dismissal was denied. No pre-trial agreement was reached and neither side filed for summary judgment, so the game is on. Pre-trial discovery concluded on November 20, 2007 and the trial, that is expected to last about a month, is slated to begin on July 7, 2008.
This poses two very interesting questions. First, If the NAR does not prevail, how will the industry change? It seems the sharks of the new millennium have been circling for some time now and many suitors to throne are frothing at the possibilities and opportunities that may present themselves in a free-enterprise real estate environment. There is no shortage of venture capital dollars in line waiting to fund many of these upstart challengers. Secondly, if the NAR does prevail, will it really matter? With real estate agents leaving the business en masse, who will be left to actually conduct business?
It has been estimated that nearly 33% of all real estate agents failed to earn a penny of commissions in 2007. With all economic forecasts pointing to an even darker real estate market, how will these agents survive? Coupled with those agents who did not earn any income, other projections now state that upwards of 35% or more of licensed agents have already decided not to renew their licenses and are leaving the business.
In addition, one of the largest real estate schools in Florida, with multiple locations, has said their enrollment is down over 50%. This information comes nearly 8 months in advance of a potentially disastrous Court ruling in the aforementioned case.
Tonight on NBC News, Brian Williams had a very compelling report that served to support the theory that by the time the DOJ v. NAR lawsuit is either settled or adjudicated, there may not be all that many real estate agents or brokers left in the business.
You can view that report broadcast this evening below:
So what do you think? Will 2008 truly take us down the Boulevard of Broken Broker’s Dreams? Will you still be in business come August 2008? No rantings here, none needed. Just a couple of warranted questions regarding the reality of the real estate industry as we now know it.
I would hate to be resting my hopes on the NAR lawsuit, for if they lose, the trickle down theory may apply and many real estate agents will see their market share devoured by major technologically rich, VC funded behemoths that will make you obsolete. If they win, will you be around to celebrate? It’s more than likely that most of your colleagues will not. A victory that may be quite bittersweet indeed.
35% percent of licensed agents leaving the business??!!!! Enrollment at major Florida real estate school down by 50%.!!! Oh, My God!!! The sky is falling!!!!!
The joker who should not even be driving a car let alone selling real estate, will be gone, gone, gone. HALLELIJAH!!!
The poor excuse of an agent that cannot even put one stinking photo of a house in the MLS, who can’t spend a penny on continuing education, marketing or advertising, who can’t spell well enough to put comments in the MLS about a listing they are getting paid THOUSANDS to sell, who can’t take room measurements any 12 year old could do so a potential buyer can know if he can fit his darn couch in the living room, the agent who doesn’t even know enough about technology to even log on to a web site or use a friggin digital camera, the agent who can’t answer their damn phone, the agent who’s voice mail is always full, the agent who could not negotiate their way out of a paper bag, the agent who is too damn lazy to put directions in the MLS for the convenience of getting the property sold and just writes “See mapquest”.
Well how about this? See your butt going out the door. Goodbye, farewell, good luck. Hooray, Hooray. I think I will have a drink on that one. BRING ON THE MOJITOS!!!!
And if NAR loses the DOJ case, bring on the TECHIES, too. I’m in this game to win, baby!
In Dallas/Ft. Worth Realtors use 2 MLS systems to search for homes for our buyer clients that all brokers websites upload their MLS information from. From a consumer standpoint, If you search on any major broker’s website you will receive real time MLS listing information (except for Pendings and Solds). With that said, I’m wondering if this is a regional issue. I’m also not sure I understand what the true definition of a VOW is. I read the first 12 pages of the DOJ vs. NAR report and it sounds as though some MLS’s in the country can refuse to upload their listing information to specific websites. Frankly I don’t understand why they would refuse to do this. Being in the South we’re teased for being a little behind the times but it sounds like we’re ahead of the curve here since our clients can educate themselves with up to date and current MLS information and have their choice of favorite website.
With websites like Realtor.com, Trulia.com, etc. why wouldn’t you want your information out there? Also, if the DOJ wins and all MLS information will be allowed to be on all broker’s websites how will that really affect many markets out there that are already doing this? I feel like I’m missing something here and apologize in advance for not being as up to date on this issue as I probably should be.
And thanks for the info on 33% of real estate agents not making any money last year. If you have access to that sort of info I would LOVE to see the percentage of agents that sold less than 5 homes, 10 homes, etc. I think that would be very good information to send out to my clients to show them the difference between a professional and a wannabe.
Hey Jeff….the NAR is the source! In fact most agents only close 2-3 deals per year average. Or so they say!
Hey Bettina..don’t hold back baby!!