Few will question that it’s easier to become a multi-million dollar producer in real estate in 2008 than it has been in the past. And why should they question that assertion?
- Prices are higher than ever (unless you’re in the Phoenix market, where we’re at 2004 or earlier prices in many areas, or in California, Florida, etc.)
- All it takes is a handful of transactions and you’re there (even though buyers have more choices than ever, financing’s more difficult to obtain than in the past and many, many potential buyers remain on the fence waiting for the final announcement that the bottom has been reached.)
- Even a blind squirrel can find a nut now and then (actually, no argument here on that one though there are limits to the amount of low-hanging fruit most of us have to grab.)
Like everything else in real estate, what it takes to become a multi-million dollar producer is local. If you’re in the midwest where prices still routinely start with a “1”, it’s going to take a few transactions to get to the $2 million mark in sales. Average even $150,000 transaction and you need more than one closed deal per month to reach the multi-million level.
But Jonathan, it’s so much easier in Phoenix and other places where prices ran up.
In 2004, my first year in the business, my median sales price was $160,000. Since then …
- 2005 – $225,000
- 2006 – $235,000
- 2007 – $237,950
- 2008 – $233,000
Okay, big guy, but that still means you only need nine transactions at that median price to reach $2 million.
Absolutely true … and guess how many agents aren’t reaching that mark? More than one-third of all “active” agents across the country did not have a single commission check in 2007, according to RE/MAX founder Dave Liniger. Zero. Nada. Bupkus. At the 2006 Century 21 commission, a company-wide goal was set of somewhere around seven to eight closings a year.
Eight closings? A goal? Really? If that’s the stretch goal, I’d hate to think what the real target might be.
None of this is to say being a multi-million dollar producer is a sign of competence or that reaching that level should be the high point of an agent’s resume. At the same time, someone who chooses to advertise that they have sold multiple million dollars worth of homes in a given year shouldn’t be stigmatized.
There are thousands of agents who would give almost anything just to cash one check.