When I took my sales person license exam in
I’m not going to admit how many years ago that was, but it feels like a century. Several years later, I sat for my
As the years went by, I became well ensconced in my career. My experience led me through both tough markets and good markets alike. I decided to follow the path of new home sales and eventually joined a small start up company specializing in urban sales and marketing.
The real estate market at this point was treating us well. There was very little competition against our company and the number of new developments going up in the city kept our new business line ringing incessantly. In fact, business was growing at such a phenomenal pace that I began to devote one day every week to interview possible agents to fill much needed sales positions at our developments in and around the city.
For those unfamiliar with new home sales, our business essentially gives sales agents standing inventory of units to sell out of beautiful sales offices, while providing all the tools necessary to see that the sales program is a successful one. Desks, computers, all advertising, marketing materials and brochures, even business cards are provided as part of the marketing and sales budget to the developer, then provided to the sales team at the sales office at that location.
Usually an agent is placed on a draw, essentially a loan against future commissions. But in those days, condos and lofts were selling much faster than they could be built…so the commission potential was huge, and monthly draws were not that bad either.
The problem at that time was the lack of experience from the pool of candidates we were interviewing. Unfortunately, many new homes sales agents use new home sales as a starting point for their career. Ultimately, if successful, a career in re-sales would be much more lucrative than new home sales and you would be in command of your own hours, rather than dictated by a developer what hours to be at a sales office.
Our business continued to grow with the real estate market. That year, the California Department of Real Estate recorded the largest number of examinees than any previous year. The following year, the number of examinees was so overwhelming to the DRE, that they used an indoor sports arena to accommodate the crowd.
Our company still needed good sales people, but all we were seeing was newly licensed agents looking to break into the business. At times, I actually had to call developers and tell them their sales office opening would be delayed due to the lack of staffing we were experiencing. It certainly was not the best conversation to have considering most developers needed to show sales activity as quickly as possible to put their lenders at ease. But I did not want to staff a seventy million dollar development with agents that had never sold real estate. In fact, with the average age of the examinee that year at twenty three years, I did not think it would be prudent to staff a seventy million dollar development with absolutely no experience in the job market either.
I would later hire an assistant to filter through the applications and provide me with what she would think would be the best possible candidates for me to interview. As the years passed, we managed to hire some good people…and some not so good people. But a good market allows for mistakes like that, and the company continued its success for a number of years to follow.
I always knew, however, when the market turns, we will be stuck with some very new agents that had never sold in a bad market. We initiated a strong training program and embraced the motto of ‘learn to sell in a bad market with a lot of competition.’ Some accepted the idea, but there were those agents that thought a bad market would never arrive. They were the agents that decided not to show up to training classes, yet demanded higher commission rates on their next project because their first project was such a huge success.
The competition came quickly. Many more developments began to sprout up around the city as other real estate companies looking to get their share of the business began to absorb many of these new projects. Even the number of employment applications began to dwindle as other new home sales companies and opportunities in resale brokerages presented seemingly better options for employment.
But then the market began to change. We started to experience an increase in applications once again, but not just from newly licensed real estate agents, but from the resale brokerages as well. Over time, the number of newly licensed applicants began to dwindle once again…but not because of other options that the market was offering.
I placed a call the California DRE a few months ago to pick up some stats. By their own admittance, applications to take the state real estate licensee exam were down nearly thirty percent over last year at that same time, while the number of license expirations increased ten fold.
Today, I am lucky to receive an application a week. I guess the market adjusts in all sorts of ways, not just the obvious. I can’t tell you how long it has been since I saw an application come across my desk from a newly licensed agent looking to break into the business. Most applications these days are the struggling agents hoping for something better…a draw, a sales office, something to see them through to the other side of this market.