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What’s More Important? Improving the Sales Process or Recruiting More New Agents?

The question that needs to be asked of every agent of their association is why are there so many agents? What’s more important, realtors focus on improving the sales process before its taken from us or recruiting more new agents?

Is the goal to keep the requirements and fees so low that everyone can be a real estate agent? If we keep the status quo, then at this pace there will soon be 2 million real estate agents, while there are not even 6 million homes sold each year.  As I watch the value and reputation of realtors continue to fall, my hope is we will actually “raise the bar” and decide to put the consumer first, which is improving the sales process and customer experience in line with the technology available today versus staying agent-centric.  Gosh, even if an agent sells 3 houses each year, it is questionable how good that level of experience can be? Let’s take a look…

The market or economy and the people in the world control how many home sales there are and this number remains relatively flat versus the agent population count, which I am counting on to improve the experience!

In my article written for Inman titled “Why Some Agents Hate the Team Model,” I was quoted saying:

“Home sales grew by 5 percent from 2013 to 2018, yet agent count increased by 30 percent during the same time period, according to a report from NAR. “

What Inman chose not to publish were the graphs which took away the impact. In today’s society, the impact is even greater due to the amount of cell phone internet usage that has changed society to be more affected by pictures or videos, versus the article. Let’s look at the charts from NAR Monthly Membership Report that demonstrate the severe climb in agent count over the past five years versus previous ten. The challenge to the population is a contradiction to the amount of homes sold, that is clear when seen side by side.

First, here is the Historic Report:

If the amount of homes sales were growing, more agents would be less impactful on the customer experience, except it’s barely ticking up so this is increasing the competition between those trying to help buyers and sellers, and adding to the empty promises that may occur due to more headbutting to win.  Unfortunately, the Agent Centric focus put pressure on the recruiting process making it juiced as brokers and teams have to pitch sunshine when recruiting instead of discussing the outlandish failure rate of 87% of new agents entering the business that the industry produces. It is clear we should be focusing on improving the home selling process like Zillow or Opendoor or Quicken, versus trying to identify more agents to start new. Check out the lack of increasing home sales over the past 7 years.


Here are the home sales from Trading Economics:

The point I want to emphasize is – why do we not focus on improving the process vs recruiting more agents?  Technology has advanced massively in showing homes. Opendoor and Zillow have demonstrated this with their focus on improving the pre-process by producing ready, willing buyers in the PA4 and flex model. Quicken has created a one-click mortgage to simplify the lending.  Why are our brokers not looking to improve the sales process?  We should be seeing more advancement from the major brokerage brands to advance the process. Except when an icon like Gary Keller improves the process, he is clearly focused on the agent, not the consumer which is where I think he is open to losing his leadership position as the world turns.  I think we should be focused on expertise and improving the process. I’m not saying we should not have new agents, there just should be better-required training. Expertise comes from doing something 10,000 times and our industry is creating the opposite.

Here is the chart overlapping:

The Agent Centric Model is set to ruin the status of realtors if we continue on this same path.  The Agent Centric model puts pressure on the system to not punish those, in fear or affecting the brand, instead of a focus on the client and upholding customer satisfaction and improving the process. The first crack has been made as customer satisfaction reviews were launched by Zillow, not the legacy brokerage brands.

I believe a renewed focus on the customer is the path forward.  We can make it a requirement of every broker to have customer satisfaction surveys and reviews with every transaction posted online, kind of like Yelp for every transaction.  This aligns the industry with the consumers and begins to transform the process. This would put the focus on training. Due to the heavy constant influx of new agents, brokers are forced to focus on risk reduction, not client service. Therefore, do we want the past average performers to teach the new? For goodness sake, the world has changed.  It is clear 99% of realtors do it the same way, but there is a better way to do it. If the industry can pivot, the best could train the rest who care to perform real estate at a higher level, who are best at serving the client.  The right compensation would bring this about. The training would be fee based and fund the system. Then agent population could provide unforgettable service along with improving the home selling process. Training actually focused on what the agents need to provide, superior client service, versus currently focused on the risks! Of course, if their performance is revealed by the clients, there will be less risky agents!  The time is now.