For Chicago real estate agent Nina Katsov, it was time. We show homes on evenings and weekends. We are always available by phone. She recently had a baby, and on her husband’s first Father’s Day, she had to skip brunch for the show.
“It was a little heartbreaking,” she said. “I had come out of a very slow spring and was also on maternity leave in the fall and winter, so I couldn’t turn down business.”
The slowdown in business also made it difficult to justify business hours. With so few homes for sale and borrowing costs so high, some of Katsov’s clients have given up after months of searching.
“I only get paid when a deal closes,” Katsov said. “I don’t get paid during that time.”
Then a new rule came into effect from the National Association of Realtors that could reduce her sales commission. Previously, home sellers typically covered the commissions of both their own agent and the agent representing the buyer. However, under the legal settlement, the seller would not have to offer the buyer’s agent’s fees.
“That was the final nail in the coffin and I thought, ‘You know what? There are too many things in this job that are out of my control,” Katsov said.
So before the new rules went into effect in August, Katsov found another job, working 9 to 5 for a commercial real estate company, and will continue to do occasional business for friends and former clients. He said he would be in charge of.
In Boulder, Colorado, Eliza Wright recently retired after working as a real estate agent for more than 10 years. Business was booming during the first two years of the pandemic as people wanted more space and interest rates were low.
“Homes are just selling themselves and people are just coming out of the trees,” she said. “I made more money in 2020 and 2021 than I have ever made in my entire life.”
Then the Fed began raising interest rates to combat inflation, and Wright saw too many families hoarding every last dollar.
“Unfortunately, it’s not affordable. And it’s hard to tell people that it’s affordable,” she said. “I just didn’t feel well.”
She was already disillusioned when the reconciliation began. If the home seller chooses not to cover her compensation from the proceeds of the sale, she will have to ask the buyer to pay out of pocket.
“The buyers I’ve seen over the past year and a half haven’t had that,” Wright said. “I felt like that was a message that I was definitely done.”
She plans to buy a camper, fix it up and hit the road for at least a year.
It’s unclear how many others will follow Mr. Wright and Mr. Katsov. Mortgage processing company Flatworld Mortgage Solutions found in a recent study that the number of agents declined sharply in California, Texas, Florida, and North Carolina from 2022 to 2023, but increased in many other states. revealed.
“As overall inventory goes down and overall real estate transactions go down, we’re seeing more real estate agents in states that we know are no longer active,” said Rajeev Kumar, executive vice president at Flatworld. It’s not surprising to me that it exists.”
The number of people working in the offices of real estate agents and brokers, excluding the self-employed, has fallen nearly 3% so far this year, according to data from the Bureau of Labor Statistics. Meanwhile, the National Association of Realtors itself predicts membership could decline by up to 10% as the market cools.
The annual fee is due in January, so further fallout from the settlement could be felt in 2025.
Beau Bromhall is a long-time real estate agent in Raleigh, North Carolina. He said the number of licensed brokers in the state has decreased by nearly 5% since May. He wants more agents to exit what he sees as a bloated industry, and hopes the fee changes could deter new entrants.
“If we can stem the tide of people coming in, and maybe if that means people are too scared to take action, that would be great,” he said.
But if interest rates continue to fall and the market recovers, it could attract more people.
“I wouldn’t be surprised if many of the people who are active or inactive today become active again in six to eight months,” Kumar said.
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