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And I was SO agreeing with you earlier, but I must respectfully disagree with this post.
As long as people are going to be buying and selling real estate there will be a need for PROFESSIONALS who can provide valuable counsel and experience, and add value to the process. Yep, there will be others who "enable" (nice term and I don't disagree) the transactions without really adding anything to them and that is an unfortunate by product.
BUT, there are other constants in the world which create a NEED for the professionals out there. Here are 3 examples:
(1) Buying and selling real estate has multiple complex elements and opportunities for bad decisions if uninformed. Not everyone has the capability to make those decisions without assistance. A good Realtor can SAVE you money, time, and trouble.(2) There are dishonorable people who prey on people, and real estate is ALREADY susceptible to that. Without some core of professional standards and practices there will be reduced protection available to those who need it. A good Realtor will help you avoid pitfalls and traps.
(3) Without real estate professionals, people will have to rely solely on some OTHER entity (be they lawyers, or some other profession) to provide assistance. I appreciate all that lawyers do, but it would make real estate MORE expensive, not less to go this route.
Are there ways that the real estate profession can adapt and change? Yes, but I don't think it is quite so easy to dismiss that there will likely always be a need for professionals in this field.
You don't have to agree. I think we both make pertinent points for and against the irreplacability of real estate agents. I think if you look halfway between the two points, you may see the reality. That would look something like the following:
........While agents remain a part of the process, a necessary, vital part, it isn't the same type of involvement it was in the past. At one time, agents had almost complete control over the home buying and selling process. Known vendors performed vital functions such as loan processing, apprasing, and such, all MLS info was in the hands of the agents, little to no information could be gleaned per homes for sale, even from newspaper thumbnails. All incoming calls were kicked back to floor or listing agents. There was no fed or state barriers to calling listed numbers for prospects. There were few gated communities to bar agents from prospecting neighborhoods. Lending tended to be a local affair. Agents all toured together enmasse on the same weekday. Open houses still drew a large number of clients.
And so on........
Now, things are different....the Internet, from Realtor.com on, has let out the genie of MLS proprietory information. Now, surfing the web for real estate isn't just an option, but the DEFAULT option for buyers to find out what's out there. They find out for themselves what's out there. National loan companies(at least the ones that aren't bankrupt yet) squeezed out local lenders and banks long ago. There are all-emcompassing national do-not-call lists that block agents from reaching the majority of sellers and buyers by prospecting by phone, along with FSBO's and expireds. There are multitudes of gates communities that completely rule out walking around door-to-door prospecting. Far more agents are using the web in a way so integral to their business that they couldn't imagine doing business without it. I would imagine that would include all the agents who post on here, regardless of how they
deny the web's influence on real estate today.........
So how will real estate agents change?.......First of all, there will be far fewer of them 3-5 years out. The 80-20 rule has held long before the web existed. The more technology that is introduced to real estate sales, the higher the skew, as top agents can do more work, in less time, with less people. Some say that skew, because of this, is currently 90-10. I think that, with the WEB 2.0 revolution, it will be more like 95-5. That would entail a massive dropoff in agents. Those that can adapt 100%, can establish viable niche turfs, can give it everything within their will to succeed, don't look back, and have an outstanding knowledge of marketing, AND their market, will thrive. Yes, agents will always be a part of the process, but not, god knows, ANYWHERE near the old numbers, which were crazy to begin with.
So, in a nutshell, few will survive, but those few that do will thrive, and in their own way redefine the real estate industry themselves.........
jamestown, I gave you rep points for your post but I hit the button before I finished typing. I wanted to let you know that you have described the industry as I see it, and as I believe other realtors see it also.
That's why it's so important to detail a vision; so that everyone can know what's in your mind.
The current market will shake out a lot of agents who don't have the qualifications to make it. What I'm concerned about is the continuation of the operation of the real estate schools without raising the bar to entry, and without educating the candidates on what it takes to run their own independent contractor business; the high cost of education after the fact; the consequences of not getting that education; and the high cost of marketing.
The schools are big business and if the bar is raised, then their business will be hurt, so I doubt that they want to see a change. We have a lot of uneducated agents because they were not told prior to attending the school what this business is really like. It's not all the fault of the agents.
The education bar needs to be changed, and the brokerages need to tighen up their hiring requirements, in my opinion. The current model has brokers competing for bodies, and I feel it needs to be changed so that they compete for the 20% of top producers instead of bodies. That would make it much more difficult for the part timers who never get an education and make a bad name for the industry.
If the student candidates were educated about running an independent contractor business prior to attending real estate license school, then there would be fewer who would take the license course.
Why? because they would see that this is not a pie in the sky job. They would see that they are not going to take home 6% of every transaction they make. They would see that their net before taxes would be more like 25% of 3% of each transaction, or less.
When many candidates enter the license school they are under the same impression as are many people on this forum. It is that the realtors are making too much money. They see the entire commission as profit for a realtor. They don't see that this is a business with a lot of necessary overhead expenses.
Sorry guys there are simply two different businesses involved. Interelated but quite different.
The brokerage houses rent desks to agents. They really don't care who sells the houses. They in fact likely make more off relatively new agents than the good ones. But they care very much about how many agents and spend their management time and energy on recruiting new agents. Their primary source of revenue is desk rent.
The RE Agents sell houses. The vast majority of them will never really make a living at it and only a few will make a good living.
Anything that would improve the lot of the RE Agent will hurt the Brokerage. Anything that makes small brokerages viable hurts the big brokerages. Anything that makes the individual agent do better is also likely bad for the brokerage. What the brokerage need is a large set of marginally successful agents.
There are changes. For instance the ability to shed brokerage Offices as quickly as the agents consolidate is a survival matter for many brokerages. If they still have to pay for the offices and don't have the heads...trouble.
But make no bones about it. The Nevada law and many others are written to make it difficult if not impossible to run a brokerage out of your home.
The consumer has practically no say in this matter. It makes no real difference if he finds his home on the internet. He still has to deal with the system to buy it. And there is no brokerage model that works by lowering consumer costs. The brokerage in fact wants it as high as possible to attract agents. Note that at the moment the average commission is going up and not down and FSBOs are dropping in number.
So don't worry about the agent or the consumer. Worry about what the brokerages want. They drive the entire system in all states.
"More Homeowners Want to Save Money By Selling Their Homes Themselves"
"Discount Real Estate Brokerages Will Cost Homeowners Less Commission"
"Websites Help Homeowners Value Their Homes"
"Internet Allows Home Buyers Access to Listings - No Agent Needed"
"Real Estate Agents Are No Longer The Keeper of the Information"
All these headlines are at least somewhat true, and I'm sorry but these headlines are all old news. Homeowners already have many avenues at their disposal to use when buying and selling a home. So why hasn't the real estate agent already died a swift death? Because savvy homeowners recognize that a really good agent will save them money. Every homeowner has the option of selling FSBO. And every home buyer can do that, too. According to a lot of people this will save them money, and everybody wants to save money, right?
So why do people do their own tax return? Same reason - to save money. The tax software is only $50. They've saved $100 minimum, right?
Then why do people use X&Y Block or a similar discount tax service? Because they're either intimidated by the whole processs or because they don't want to be bothered doing it themselves. But they still feel like they've saved a little (or a lot) vs using a CPA.
And all these people in the above 2 examples feel like they've saved money. But have they really?
What if one of them is a business owner or self-employed and decides to seek the advice of a CPA? The CPA helps them to structure their business in such a way so as to take advantage of certain tax laws and incentives, thus saving the individual $1,000's in taxes over the next several years. Was the expense of using a CPA justified? Absolutely.
In real estate, the home seller and buyer are faced with many options. What may appear to be a savings on the surface may actually cost that person. Only someone that's really keeping up with the local real estate market on a daily basis, knows investment options such as 1031 exchanges, and has a network of title and loan people that also "know their stuff" can truly save money when purchasing and selling real estate. The rest will probably end up spending more than they should have (if buying), or possibly severely mispricing their home (if selling). Oftentimes the ones that think they've saved so much money it's usually a case of "what they don't know won't hurt them".
I see it over and over again. A FSBO seller who sells his home in a down market in less than a month thinks he's successful. He doesn't even realize that he underpriced his home by 25%. Oh well. His loss is someone else's gain. Same thing on the buyer side of things. How many buyers really know the market, know how to run comps that reflect what a home is really worth? How many know the intracacies of negotiating? Granted there are a few that do . . . but it's very rare.
As far as getting a good deal through a discounter - it's just like the X&Y Block thing. They're into volume, meaning do it quick, do it cheap. Get the seller to price his home at or below market, and spend as little time on the listing as possible. Let the seller negotiate his own best deal, get it closed, and get on to the next deal.
Will the real estate model continue to evolve and change? Absolutely! I have a feeling that we may see some major changes in the whole brokerage arrangement. At this point, most brokerages are not working for the "best interest" of their agents and the agents' clients. A few forward thinking brokers are reworking the model and are being successful at it. I'm fortunate enough to be associated with one of those. It will be interesting to see who emerges from this housing shakeup.
jamestown, I gave you rep points for your post but I hit the button before I finished typing. I wanted to let you know that you have described the industry as I see it, and as I believe other realtors see it also.
That's why it's so important to detail a vision; so that everyone can know what's in your mind.
The current market will shake out a lot of agents who don't have the qualifications to make it. What I'm concerned about is the continuation of the operation of the real estate schools without raising the bar to entry, and without educating the candidates on what it takes to run their own independent contractor business; the high cost of education after the fact; the consequences of not getting that education; and the high cost of marketing.
The schools are big business and if the bar is raised, then their business will be hurt, so I doubt that they want to see a change. We have a lot of uneducated agents because they were not told prior to attending the school what this business is really like. It's not all the fault of the agents.
The education bar needs to be changed, and the brokerages need to tighen up their hiring requirements, in my opinion. The current model has brokers competing for bodies, and I feel it needs to be changed so that they compete for the 20% of top producers instead of bodies. That would make it much more difficult for the part timers who never get an education and make a bad name for the industry.
If the student candidates were educated about running an independent contractor business prior to attending real estate license school, then there would be fewer who would take the license course.
Why? because they would see that this is not a pie in the sky job. They would see that they are not going to take home 6% of every transaction they make. They would see that their net before taxes would be more like 25% of 3% of each transaction, or less.
When many candidates enter the license school they are under the same impression as are many people on this forum. It is that the realtors are making too much money. They see the entire commission as profit for a realtor. They don't see that this is a business with a lot of necessary overhead expenses.
I agree that the bar has to be raised. The bar was set when most realtors were ex-housewives with not much more than a high school education. As things have gotten more complex with technology, the bar has stayed the same. I personally think a 2-year degree should be the minimum. Texas has that, and I believe California as well, but I may be mistaken. Per realtors rolling in money, I've worked for seven brokerages, and saw few folks rolling in cash, except for re/max, and those folks were selling real estate 24/7. I can go on forever with this, but lets just say that its the fault of the majors for hiring so many people, and playing the numbers game, pushing their proprietary loan and title products in agents' faces.
Sorry guys there are simply two different businesses involved. Interelated but quite different.
The brokerage houses rent desks to agents. They really don't care who sells the houses. They in fact likely make more off relatively new agents than the good ones. But they care very much about how many agents and spend their management time and energy on recruiting new agents. Their primary source of revenue is desk rent.
The RE Agents sell houses. The vast majority of them will never really make a living at it and only a few will make a good living.
Anything that would improve the lot of the RE Agent will hurt the Brokerage. Anything that makes small brokerages viable hurts the big brokerages. Anything that makes the individual agent do better is also likely bad for the brokerage. What the brokerage need is a large set of marginally successful agents.
There are changes. For instance the ability to shed brokerage Offices as quickly as the agents consolidate is a survival matter for many brokerages. If they still have to pay for the offices and don't have the heads...trouble.
But make no bones about it. The Nevada law and many others are written to make it difficult if not impossible to run a brokerage out of your home.
The consumer has practically no say in this matter. It makes no real difference if he finds his home on the internet. He still has to deal with the system to buy it. And there is no brokerage model that works by lowering consumer costs. The brokerage in fact wants it as high as possible to attract agents. Note that at the moment the average commission is going up and not down and FSBOs are dropping in number.
So don't worry about the agent or the consumer. Worry about what the brokerages want. They drive the entire system in all states.
You just explained the majors's downfall in a nutshell. This is why Cendant broke up, and why other franchises are closing up offices left and right. Indeed, it is a numbers game. The margins in conventional brokerages come from proprietary products like loan and title companies. The deals themselves can be considered loss leaders to get the business with the high margins. This is why most of the majors charge a transaction fee on top of the commission charges. Now that business is down an average of 18-20% year-to-year across the nation, the conventional, asset-heavy, conventional brokerage model is unsustainable. You wll see a resurgence of localism, just like sprawl, with the 3-4 dollar a gallon gas prices the next few years, will contract to what they call "New Urbanism". The only given in this current time of churn and great turmoil(with the largest mortgage company just skirting bankrupcy this week), is that there will be a big shakeout. What it exactly will shake out, I don't know, but I can guarantee you that it will render a multitude of old ways of doing things defunct.
"More Homeowners Want to Save Money By Selling Their Homes Themselves" "Discount Real Estate Brokerages Will Cost Homeowners Less Commission" "Websites Help Homeowners Value Their Homes" "Internet Allows Home Buyers Access to Listings - No Agent Needed" "Real Estate Agents Are No Longer The Keeper of the Information"
All these headlines are at least somewhat true, and I'm sorry but these headlines are all old news. Homeowners already have many avenues at their disposal to use when buying and selling a home. So why hasn't the real estate agent already died a swift death? Because savvy homeowners recognize that a really good agent will save them money. Every homeowner has the option of selling FSBO. And every home buyer can do that, too. According to a lot of people this will save them money, and everybody wants to save money, right?
So why do people do their own tax return? Same reason - to save money. The tax software is only $50. They've saved $100 minimum, right?
Then why do people use X&Y Block or a similar discount tax service? Because they're either intimidated by the whole processs or because they don't want to be bothered doing it themselves. But they still feel like they've saved a little (or a lot) vs using a CPA.
And all these people in the above 2 examples feel like they've saved money. But have they really?
What if one of them is a business owner or self-employed and decides to seek the advice of a CPA? The CPA helps them to structure their business in such a way so as to take advantage of certain tax laws and incentives, thus saving the individual $1,000's in taxes over the next several years. Was the expense of using a CPA justified? Absolutely.
In real estate, the home seller and buyer are faced with many options. What may appear to be a savings on the surface may actually cost that person. Only someone that's really keeping up with the local real estate market on a daily basis, knows investment options such as 1031 exchanges, and has a network of title and loan people that also "know their stuff" can truly save money when purchasing and selling real estate. The rest will probably end up spending more than they should have (if buying), or possibly severely mispricing their home (if selling). Oftentimes the ones that think they've saved so much money it's usually a case of "what they don't know won't hurt them".
I see it over and over again. A FSBO seller who sells his home in a down market in less than a month thinks he's successful. He doesn't even realize that he underpriced his home by 25%. Oh well. His loss is someone else's gain. Same thing on the buyer side of things. How many buyers really know the market, know how to run comps that reflect what a home is really worth? How many know the intracacies of negotiating? Granted there are a few that do . . . but it's very rare.
As far as getting a good deal through a discounter - it's just like the X&Y Block thing. They're into volume, meaning do it quick, do it cheap. Get the seller to price his home at or below market, and spend as little time on the listing as possible. Let the seller negotiate his own best deal, get it closed, and get on to the next deal.
Will the real estate model continue to evolve and change? Absolutely! I have a feeling that we may see some major changes in the whole brokerage arrangement. At this point, most brokerages are not working for the "best interest" of their agents and the agents' clients. A few forward thinking brokers are reworking the model and are being successful at it. I'm fortunate enough to be associated with one of those. It will be interesting to see who emerges from this housing shakeup.
The problem is that there are FAR too many marginal agents that sour the publics' conception of added value per a real estate agent. If CPA's didn't require a bachelors degree, and everyone and their uncle had a CPA, surely the reputation they carry would suffer as well. I would honestly say from experience in the field that in a conventional brokerage office, maybe 15% of the agents have the experience and knowledge to truly add value to the transaction. Re/Max. pay to play brokerages have a much high %, I would say the vast majority of pay to play agents add value. The problem is, 85% of the agents work at conventional brokerages. I don't know that anyone really knows where real estate is headed. I would simply say that when THE major lender, Countrywide, comes a hairs-length from bankrupcy, we are likely to see major changes in real estate as well. Something is very wrong now in real estate. Prices have depreciated year-to-year for the first time since the great depression. These are times you would expect major changes to sweep through an industry. Only time will tell where the future of real estate and agents lies.
The problem is that there are FAR too many marginal agents that sour the publics' conception of added value per a real estate agent. If CPA's didn't require a bachelors degree, and everyone and their uncle had a CPA, surely the reputation they carry would suffer as well. I would honestly say from experience in the field that in a conventional brokerage office, maybe 15% of the agents have the experience and knowledge to truly add value to the transaction. Re/Max. pay to play brokerages have a much high %, I would say the vast majority of pay to play agents add value. The problem is, 85% of the agents work at conventional brokerages. I don't know that anyone really knows where real estate is headed. I would simply say that when THE major lender, Countrywide, comes a hairs-length from bankrupcy, we are likely to see major changes in real estate as well. Something is very wrong now in real estate. Prices have depreciated year-to-year for the first time since the great depression. These are times you would expect major changes to sweep through an industry. Only time will tell where the future of real estate and agents lies.
Jamestown - I agree with your observation about marginal agents, and therein lies a big part of the problem. Having been in the "world of accounting" for many years, I can tell you there's also marginal CPA's - just like there's marginal doctors, lawyers, ad execs . . . almost any professional you can think of. Which is why people need to thoroughly interview before hiring someone that can have such a big impact on your financial well-being.
You can hire somebody that does a great job or somebody that's lousy at what they do. And, unless someone has had experience dealing with a realtor (or lawyer, or heart specialist, financial planner, or CPA, etc) in the past, it's very difficult to gauge their level of expertise. (For example, I could confidently interview a CPA, but not a heart specialist or lawyer). However, I would never consider "going it alone" just because I'm worried I'll hire the incompetent expert. Instead I'll probably try to educate myself enough to at least ask the right questions to determine competency.
Most industries have pretty strict regulations, but let's face it, there are still incompetent "practitioners" in almost any field (yet they still continue to "practice" ;-). Why? Because they continue to still make money and not suffer the consequences of their incompetency. Could real estate have stricter regulations? Actually, NAR has set up some pretty exacting standards. Unfortunately, not all agents are aware of the standards (as you can tell from many of these threads). Here is where there needs to be a TON more education - in ethics. Not just a 2-hr every 2-yr continuing ed class, but some real classes with some real meat that require agents to test and pass.
Also, in general, brokerages make more money off the part-timers and newbies (because splits are lower the fewer transaction an agent does), so conventional wisdom encourages hiring practices that do not increase the level of expertise. Even with a few successful old-timers you'll see more of that "get it done quick", regardless of whether somebody gets burned in the process, "just get it closed" mentaility. Lack of sufficient income will weed out the first group within a couple of years, but the latter group will remain and continue to be financially successful until their reputation catches up with them (if it ever does). IMHO, these latter agents hurt our industry even more than the inexperienced first group. If an inexperienced agent wants to do a good job for his/her client, then chances are the client is well represented, plus the newbie is less apt to "wing it".
I think the r.e. model will change, and I'm seeing it already. The most successful brokerages in town are the ones that are hiring agents based on experience and level of professionalism. The ones that are hurting the most now are the brokerages that have been hiring based on volume (the more agents they hire then the more transactions they'll have, even if it's only 1/agent - these agencies hire anybody and everybody).
The brokerages that have a vested interest in seeing their agents succeed (free training, free marketing materials, hand-holding if needed) create more of a team spirit and a higher level of professionalism.
The problem is that there are FAR too many marginal agents that sour the publics' conception of added value per a real estate agent. If CPA's didn't require a bachelors degree, and everyone and their uncle had a CPA, surely the reputation they carry would suffer as well. I would honestly say from experience in the field that in a conventional brokerage office, maybe 15% of the agents have the experience and knowledge to truly add value to the transaction. Re/Max. pay to play brokerages have a much high %, I would say the vast majority of pay to play agents add value. The problem is, 85% of the agents work at conventional brokerages. I don't know that anyone really knows where real estate is headed. I would simply say that when THE major lender, Countrywide, comes a hairs-length from bankrupcy, we are likely to see major changes in real estate as well. Something is very wrong now in real estate. Prices have depreciated year-to-year for the first time since the great depression. These are times you would expect major changes to sweep through an industry. Only time will tell where the future of real estate and agents lies.
Jamestown - I agree with your observation about marginal agents, and therein lies a big part of the problem. Having been in the "world of accounting" for many years, I can tell you there's also marginal CPA's - just like there's marginal doctors, lawyers, ad execs . . . almost any professional you can think of. Which is why people need to thoroughly interview before hiring someone that can have such a big impact on your financial well-being.
You can hire somebody that does a great job or somebody that's lousy at what they do. And, unless someone has had experience dealing with a realtor (or lawyer, or heart specialist, financial planner, or CPA, etc) in the past, it's very difficult to gauge their level of expertise. (For example, I could confidently interview a CPA, but not a heart specialist or lawyer). However, I would never consider "going it alone" just because I'm worried I'll hire the incompetent expert. Instead I'll probably try to educate myself enough to at least ask the right questions to determine competency.
Most industries have pretty strict regulations, but let's face it, there are still incompetent "practitioners" in almost any field (yet they still continue to "practice" ;-). Why? Because they continue to still make money and not suffer the consequences of their incompetency. Could real estate have stricter regulations? Actually, NAR has set up some pretty exacting standards. Unfortunately, not all agents are aware of the standards (as you can tell from many of these threads). Here is where there needs to be a TON more education - in ethics. Not just a 2-hr every 2-yr continuing ed class, but some real classes with some real meat that require agents to test and pass.
Also, in general, brokerages make more money off the part-timers and newbies (because splits are lower the fewer transactions an agent does), so conventional wisdom encourages hiring practices that do not increase the level of expertise. Even with a few successful old-timers you'll occasionally see some of that "get it done quick", regardless of whether somebody gets burned in the process, "just get it closed" mentaility. Lack of sufficient income will weed out the first group within a couple of years, but the latter group will remain and continue to be financially successful until their reputation catches up with them (if it ever does). IMHO, these latter agents hurt our industry even more than the inexperienced first group. If an inexperienced agent wants to do a good job for his/her client, then chances are the client is well represented, plus the newbie is less apt to "wing it".
I think the r.e. model will change, and I'm seeing it already. The most successful brokerages in town are the ones that are hiring agents based on experience and level of professionalism. The ones that are hurting the most now are the brokerages that have been hiring based on volume (the more agents they hire then the more transactions they'll have, even if it's only 1/agent - these agencies hire anybody and everybody).
The brokerages that have a vested interest in seeing their agents succeed (free training, free marketing materials, hand-holding if needed) create more of a team spirit and a higher level of professionalism.
Jamestown - I agree with your observation about marginal agents, and therein lies a big part of the problem. Having been in the "world of accounting" for many years, I can tell you there's also marginal CPA's - just like there's marginal doctors, lawyers, ad execs . . . almost any professional you can think of. Which is why people need to thoroughly interview before hiring someone that can have such a big impact on your financial well-being.
You can hire somebody that does a great job or somebody that's lousy at what they do. And, unless someone has had experience dealing with a realtor (or lawyer, or heart specialist, financial planner, or CPA, etc) in the past, it's very difficult to gauge their level of expertise. (For example, I could confidently interview a CPA, but not a heart specialist or lawyer). However, I would never consider "going it alone" just because I'm worried I'll hire the incompetent expert. Instead I'll probably try to educate myself enough to at least ask the right questions to determine competency.
Most industries have pretty strict regulations, but let's face it, there are still incompetent "practitioners" in almost any field (yet they still continue to "practice" ;-). Why? Because they continue to still make money and not suffer the consequences of their incompetency. Could real estate have stricter regulations? Actually, NAR has set up some pretty exacting standards. Unfortunately, not all agents are aware of the standards (as you can tell from many of these threads). Here is where there needs to be a TON more education - in ethics. Not just a 2-hr every 2-yr continuing ed class, but some real classes with some real meat that require agents to test and pass.
Also, in general, brokerages make more money off the part-timers and newbies (because splits are lower the fewer transaction an agent does), so conventional wisdom encourages hiring practices that do not increase the level of expertise. Even with a few successful old-timers you'll see more of that "get it done quick", regardless of whether somebody gets burned in the process, "just get it closed" mentaility. Lack of sufficient income will weed out the first group within a couple of years, but the latter group will remain and continue to be financially successful until their reputation catches up with them (if it ever does). IMHO, these latter agents hurt our industry even more than the inexperienced first group. If an inexperienced agent wants to do a good job for his/her client, then chances are the client is well represented, plus the newbie is less apt to "wing it".
I think the r.e. model will change, and I'm seeing it already. The most successful brokerages in town are the ones that are hiring agents based on experience and level of professionalism. The ones that are hurting the most now are the brokerages that have been hiring based on volume (the more agents they hire then the more transactions they'll have, even if it's only 1/agent - these agencies hire anybody and everybody).
The brokerages that have a vested interest in seeing their agents succeed (free training, free marketing materials, hand-holding if needed) create more of a team spirit and a higher level of professionalism.
Part of the problem is that agents do not typically get paid upfront. Clients don't have much respect for a practitioner that only gets paid if the deal closes. With buyer's agents, people totally dog and dis them. They don't show up, they work with other agents, even just treat them lousy, thinking they are just interested in the commission. I even had a client say that once. I think it would be better if we got paid upfront for our service. Again, the real estate agent is the least respected of any profession short of used car salesmen. People see them as incompentent pests who are just looking for an easy buck. The problem with so many bad agents isn't as much the low bar of entry as it is the lousy job market. There is an abject lack of decent jobs out there for anyone not on a degreed professional career path. Unfortunately, real estate is the only alternative for displaced workers now, outside of retail and other unappealing choices. People simply don't want to demean themselves with a Home Depot orange apron, so they think of real estate as a way of avoiding that cruel fate. If we had a solid, well-paying job market, few would choose an occupation with no health insurance, pension, 401K, or even a steady paycheck. The massive number of agents have entered the occupation out of sheer lack of any viable, living-wage choice in the job market. It's as simple as that.....
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