There are now a record number of real estate professionals with a seat at the table eyeing a piece of the American real estate pie: a delectable dish made up of nearly seven million ingredients we call transactions, stirred in with a tasty sum of $85 billion paid in real estate commissions last year.
But before we watch our wallets expand like a holiday waistline, let’s have a look at how the table has been set.
There’s nothing like a DOJ investigation to ruin one’s party. The National Association of REALTORSⓇ (NAR) and MLS rules are under scrutiny. Ironically, commissions have gone down. Recent studies have noted that commissions are sliding below 5%.
More Mouths to Feed
Look who’s coming to dinner! There are more mouths to feed than anytime in this industry’s storied history. The Association of Real Estate License Law Officials (ARELLO) estimates that there are over three million active real estate licensees in the United States. NAR membership has now swelled to over 1.5 million members.
Reheating Interest Rates
It is inevitable that we will be moving to 4% and above, most likely by the end of 2022. Still historically low? Yes! Triggering heartburn for a society that has feasted on deals in 2% – 3% ranges for nearly a decade? Absolutely!
It’s time to spice up the recipe as we head into 2022. As the saying goes, “You can’t do today’s job with yesterday’s methods and be in business tomorrow.”
Chase Deadlines, Not Headlines
Quit griping about inventory—the market is cooking. We are tracking over a half million more home sales in 2021 than 2020 at an average price of $356,000. There isn’t an inventory issue as much as a race to secure listings and cultivate leads and referrals. The average American moves 11.7 times in their lifetime. Each client represents a potential 11X return.
Invest Like Warren Buffet
As the Oracle of Omaha so wisely said, “The best investment you can make, is an investment in yourself. The more you learn, the more you’ll earn.” Invest in training with a solid ROI. Prime example: earlier in the year, NAR rolled out the Buffini 100 Days To Greatness® agent training program. More than 7,000 agents have already registered, and those agents are averaging six pending or closed transactions in 100 days.
Leverage the Inflation Killer
Economics 101: Real estate is one of the very best hedges against inflation. Communicate, educate and market this historical investment opportunity to your past, current and future clients.
Real estate’s American Pie is not only still on the menu—it’s shaping up to be a main course for 2022.
Mike Ryan is a partner with the Rainmakers Group, an advisory firm serving the real estate and settlement service industries with global insight, talent and technology.