There’s always something to howl about.

Maybe We Need More Salaried Agents

I’ve been running some stats on advertising, Google rankings and agent performance over the last couple of days. One of the top agents in Atlanta has not had a selling-side transaction all year. Very unusual for this agent. Another top agent – who ranks very high in Google and has been a very productive selling agent in the past – has also not had a selling-side transaction this year. Both agents have seen sales on their listings, but not at the same rate as 2005.

When I examine the number of homes sold in the greater Atlanta area in 2005 versus 2006, the numbers are virtually the same… but the number that didn’t sell was much higher in 2006. In 2004 – 99% of all listings sold… in 2005 – 71% of all listings sold… but in 2006, only 54% sold. If this trend continues, we will soon reach a point where a property will be more likely NOT to sell.

Meanwhile, for the umpteenth time over the last few days, GMAC Metro Brokers Real Estate has been running their television ads trying to get more people to become real estate agents. One of their ads features a guy saying that he sold $9 million in his first year. Oh yeah… we’re all swimming in cash right now. Even their website asks, “Who wants to be a millionaire?”

I wrote “How Many Agents Is Too Many” back in October.

So, with a yearly average of three or four transaction sides per agent in Georgia… why would Metro Brokers advertise for more agents?

Simple. Because these agents aren’t on salary.

Many businesses that hire commission-only salespeople don’t care who they hire, as these people only get paid when the company gets paid. To them, the more the merrier… and I fear that the same is true in real estate companies.

The questions is: “Is this a good model for our industry?”

Some new brokerages are trying a salary model, and time will tell if these models will thrive – or even survive. I have yet to hear what kind of money these salaried positions are paying.

On the surface, it sounds interesting to me. One of the larger jewelers in Atlanta has a sales staff that is on salary, and they use that fact in their marketing… no pushy salespeople there. The same marketing concept could be used in real estate.

With all the bad press about agents pushing their clients and customers to make less-than-optimal decisions (presumably because of money) maybe there is some merit in this salary idea. I know one thing is for sure – if all agents were on a salary… there would probably be only 250,000 members in NAR. 300,000 tops.