A policeman pulls over a speeding driver. He walks up to the driver’s window and asks “May I see your real estate license?”
The surprised driver responds “Don’t you mean my driver’s license?”
The policeman says “No, not everyone in California has one of those.”
How many folks have real estate licenses in California? According to the latest statistics about 275,000 individuals hold active real estate salesperson licenses in California, and another 140,000 plus hold brokers licenses. This adds up to 415,000 licenses. Out of a total population of 38,041,030 (end of 2012, estimated) this means that about 1 out of every hundred people holds a real estate license.
Notice that the absolute number of licensees is down 32% relative to the peak, while the population has grown.
Remember that not all licensees sell real estate. Many – like me – originate mortgage loans.
I find this interesting mostly because there is a perception in the public that “Real Estate is hot right now.” It is hot right now, but that isn’t the same as saying there are lots of transactions, or that there is a lot of money to be made. Prices are rising rapidly because there is a lot of pent up demand (folks have been waiting out the storm for five years) and there is very little inventory.
But, because there is very little inventory there are very few transactions, relative to the boom years.
Consequently, there are a reasonable number of new folks getting licensed every year, but more and more are letting their licenses expire – they simply haven’t made any money at it.
The good news, in my opinion, is that the really good real estate agents seem to be staying in the market. It’s tough going these days, and it is not easy money. But if an agent is competent, professional and ethical he or she can make a reasonable living.
This all came to mind because I’ve spoken to a number of folks recently who either have earned a license or are thinking about it. After all, real estate is hot right now.
Because I have a license I am, in theory, qualified to sell real estate. I am definitely licensed to sell real estate. In fact, I got talked into it and I sold a home once, in 1988 I believe. I learned that I’m glad other people like doing it so that I don’t have to. I’m good with the financial part of it; they do the other part well.
How does this relate to you?
If you are in the market to buy or sell your home, here is how to select your real estate agent:
- Are they full or part time? Use a full time agent.
- How long have they been in business? How many homes have they sold? If they have been in business for less than five years, or sold less than 100 homes, use them only if they have a more experienced agent or broker mentoring them.
- Are they experienced in your area? Don’t use an out-of-area real estate agent.
- Were you referred to them? A referral from a trusted source is the best way to vet a real estate agent.
- If they were not referred, do they have great endorsements? This can be dicey since they could have their cousins write endorsements, but it helps.
So the good news is that while there are more folks jumping in and getting licenses, the ones who have lasted through the rough times are probably experienced and more competent.
Choose your real estate agent wisely, because buying real estate is likely the largest investment you’ll ever make.
My name is Casey Fleming, and I make mortgage loans throughout California and am based in Silicon Valley.
(408) 348-3442 / firstname.lastname@example.org / www/loanguide.com
DRE 00889527 / NMLS 344375