I recently read that 40% of real estate agents and loan officers will change companies in the next twelve months. This tends to happen when the market shifts dramatically. Real estate is a cyclical business and after one of the longest bull markets in modern history, it’s not a surprise that things are starting to slow. During down markets, the workforce of real estate agents and mortgage professionals also tends to “right size” and salespeople start looking for greener pastures. This is normal, but I also think it’s important for quality sales professionals to not fall into the trap of chasing every shiny object. It is also during down cycles when the predators and scam artists thrive.
On the lending side, expect to see a wave of new lenders touting bigger commission splits and a menu of niche loan products – promising sales professionals more money with less work. Easy money schemes also proliferate on the real estate side, with new business models that claim to make agents buckets of money without actually having to sell any real estate.
This might not be the politically correct thing to say, but in my experience, I have noticed that Latinos seem to be especially vulnerable to easy money schemes. For example, a recent study confirmed that more than 60% of the multi-level marketing company Herbalife’s $5 Billion in annual sales are made to Latinos. I attribute this phenomenon to a lack of experience and the limited access most Latinos have to quality mentors.
Change can be good, but the most successful people I know in the industry don’t move much. They stick to the fundamentals and understand that there is no substitute for hard work. Down cycles create opportunity, but if something seems too good to be true…well, you know the rest.