Brokers and agents rely on sales and commissions for most of their income. And their income dropped drastically as sales of existing homes fell 13.3% to 4.9 million last year from 7.1 million in 2005. According to National Association of Realtors average income for Realtors and brokers fell to $36,700 last year from a high of $49,300 in 2004.

The group’s membership fell to 1.1 million in October from 1.4 million in September 2006. Still, by large the NAR is the largest trade association in the United States.

This was evident at the recent NAR Convention in San Diego, where attendance has been  much smaller than in the previous years.

Since 2007, many professionals are leaving industry looking for new jobs, like one broker in Florida who was laid off as a sales manager at a local real estate office. He quickly learned that other real-estate jobs were scarce, so he looked into law enforcement, and in April, he became a deputy sheriff. His pay fell to $35,000 annually, from $75,000 as a realtor. But he is satisfied with the trade because he now has health insurance and a pension, neither of which came with his real-estate job.

Florida agents are suffering more than most in the other parts of country. Membership in the Florida Association of Realtors is down 29% since 2006. As sales declined, many left for other jobs. Among those remaining, many are taking on second jobs to bolster their incomes.

Historically, in previous downturns agents traditionally were taking jobs in related fields like appraisals, commercial real estate and insurance to carry them through slow periods. But this recession has been unusually long, and many of those fields are suffering along with home sales, forcing many agents to consider other options.

Recently, many agents are attracted to loan modifications; they are using their sales and marketing skills to renegotiate with banks better rates and terms of loans for their clients.

Others are opening their own businesses. Just recently, one agent became so frustrated with real estate that she opened her own clothing store. Her four recent deals fell through as prospective buyers backed out when they could not secure financing. After five years of consistent six figure income, she expects her income to fall by half this year.

Not just realtors, but builders too, are being forced to look elsewhere for income. The National Association of Home Builders predicts 572,000 housing starts for 2009, down from 1.8 million in 2006. One large builder in Nevada, a state affected by current recession probably the most after Florida, says that his income fell down at least 80% from three years ago. So he is taking on remodels, additions and repairs projects. He says, “Almost any job will do”. He also was forced to take on part time job outside of construction to brink some income and pay monthly bills.

Recruiters say that good thing for most realtors is that they have transferable skills. Those with backgrounds in sales might consider retail fields such as specialty or large department stores. People with financial skills, such as mortgage brokers and loan originators, are recruited by the Federal Deposit Insurance Corp. or other government agencies.

Finally, this long real estate downturn will have very positive impact for all industry, it will “clean up” the fields of incompetent and unprofessional agents, mortgage brokers and builders. For too long, it has been so easy to obtain real estate license that services and reputation of our industry has been heavily damaged and compromised.

John Budz
Realty Executives, USA

Source: Property Journal - Polska Giełda Nieruchomości nr 12-01/10