Real Estate Agent Income Is Dropping

Not long ago agents were perceived as greedy villains. People complained bitterly that agents were making a fortune with huge numbers of easy transactions selling high priced housing. What a difference a couple of years can make. In depressed markets across the United States agents are struggling, many forced to leave the profession. Those who survive have either found a niche that they can specialize in or have alternate income streams keeping them afloat. Real estate agents, now more than ever, need an opportunity that will help them diversify their income.

The market is in such a state of fluctuation that numbers vary wildly from one month to another, but one thing is certain. If housing values drop by 30% and commission rates stay the same, real estate agents would have a 30% drop in their earnings, all other factors remaining unchanged. But it is far worse than that.

There are other issues that make things even more complicated for the real estate professionals. The number of transactions has dropped dramatically, exacerbating the dilemma. Competition to represent the few able buyers is fierce. Knowing that, many savvy qualified buyers are successfully negotiating lower commission percentages with their agents.

Millions of Americans now owe more on their home than their house is worth, many just abandoning their upside-down position and leaving the keys for the mortgage holder. One recent month lenders took back 95,364 homes- in one month! Then those banks are negotiating lower commission rates when they place those distressed properties with a broker.

To avoid the risk of foreclosure many homeowners are using real estate professionals to negotiate short sales with the lender. The lender allows a sale that nets them less than the amount owed and they write off the loss. The agents often find themselves with hours of extra communication and negotiation between the buyer, the bank, and the seller, yet the banks push to have a reduced commission rate to help them limit the extent of their loss.

Most of the financial institutions responsible for the collapse of the housing market have recovered and enjoy immense profits, but the real estate industry and the agents who drive it will have years before they can get even close to the earning levels they once had. Many, however, seem to be in total denial. They have learned to maintain a positive attitude in the darkness of poor results so tend not to be realistic about the depth of this problem. So many have waited far too long to cultivate a viable “plan B”. Real estate agent income is dropping and those who want to stay in the industry had better find an opportunity that offers an alternate income stream before it is too late.

This article is written by Phil Stone, an Internet Marketing Specialist with a business background in Sales and Marketing who has also been a Florida Realtor for years. The author offers training, tips, and tools for Network and Internet Marketers on his blog site. Go to http://PowerLineTraining.com/real-estate-agent-income/ for more statistics and a source of alternate opportunities or real estate agents.