Real Estate Industry Game Changers

Real Estate Industry Game Changers

Time Trumps All

Over the last 10 years, forgive the pun, real changes have occurred in the real estate industry.  The salary bubble that started in the “tech 90s” created bubbles in a wide variety of commodities and assets.  Residential real estate started to climb in early 2001 and builders flooded the market with new construction (new “assets”) to ride the wave upward.  They thought the upward rise would continue.  Lenders were forced to create loan products for low-income borrowers to get them into the newly constructed homes.  Then reality popped the real estate appreciation because the bad loan products could not “carry their own weight” in the global investment market.  Banks who were forced to eat the loans and derivatives started to crumble (derivatives that NEVER had value).  Congress decided, in their omniscience, to rescue the biggest weaknesses in the system – allowing them to fail would have provided more benefit to the system. 

As time marches on, we don’t really change but many around us are paying for us to change – change our buying habits; change our driving habits; change our smoking habits; change our thinking habits.  There is always someone who wants me to change something about me.  Now they want me to recognize so many changes around me that I MUST change to survive.  I will discuss a couple of these game changers and how they affect my clients, not just me.

80/20 Rule in Results

The old adage holds true:  “80% of results are achieved by 20% of the practitioners”.  In the case of selling residential real estate, it’s nearly a 90/10 rule.  That is, over 85% of all sales are the result of 15% of the professional agents/brokers.  Unfortunately for the 15% of sales, those are negotiated and managed by incompetent, part-time agents.  When your mom needs to sell, it might be a ‘path to cash’ for young, unemployed, or otherwise self-centered individuals who care less about the risks to their clients than the paycheck.  More sad is that sellers, who would otherwise have a smooth and successful experience, are ‘carriers’ of risk way past the close of their escrow.

There are too many real estate agents that are simply not qualified to the level they should be. Furthermore, there are no meaningful educational initiatives on the table to raise the national bar for real estate agents across the board. And while this lack of agent knowledge is a significant danger in itself, when combined with a lack of basic competency it could be destructive and harmful to both the industry and the consumer. This can also be expanded such that the 80/20 rule also exists within the top 20 percent. Meaning that the top 20 percent of the top 20 percent (or the top 4 percent overall) represent 64 percent of sales.

Ask me about the critical and revealing interview questions that should be asked of any and all prospective agents.  You will get my answers, too. 

Don’t Bank On It

Banks want to own the most revenue-rich verticals in the residential real estate market.  Banks provide the loans and get the fees and interest – that’s a good, long-term investment.  They have long wanted to take the commission piece, too.  This wearing of ‘two hats’ was proven to be a problem to the extent that the omniscient government is regulating lenders who also want to be sales agents.

My job at the bank was cut short by the introduction of ATMs. I don’t fear change but I fear that banks won’t magically increase professionalism and competence.


The market and us practitioners will always be changing.  My hope is that you will hire wisely.

success-inflection-point

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Jay Emerson, Broker
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916-517-9606
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Weichert - Galster Group5006 Sunrise Blvd, #100
Fair Oaks CA 95628
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