Due to the Covid-19 pandemic and the real estate industry being shut down from
March through June 9, a majority of brokers and agents have suffered financially,
even though those who applied for an Economic Injury Disaster loan or
Payroll Protection Plan loan (or potential grant) may have received money which surely aided in paying employees and business expenses.
But a greater number had not been able to secure any money, which added insult to financial injury in staying in business. Those who did receive money, which most likely will be turned into a grant, will not have to pay it back. Those who have to repay their loans back to the federal government will pay up to 3.75 percent interest per annum, but that will depend on a number of variables.
The Paycheck Protection Program was a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. SBA will forgive loans if all employee retention criteria are met and the funds are used for eligible expenses. The following link can provide more in-depth and complete information as far as the qualifications about the EIDL and PPP grants and loans and their required qualifications:
https://www.sba.gov/sites/default/files/2020-08/PPP%20-
%20Loan%20Forgiveness%20FAQs%20%28August%2011%2C%202020%29.pdf
Now back to the subject matter at hand with what is happening with agent’s income and the impact of the Covid-19’s on their success.
I can totally get it about how challenging and difficult the current market environment is for those agents who haven’t pivoted and changed their ways in doing business, from communications, showing property and most importantly learning how to hold the hands of their clients through the process.
One of my mottos (I have said this before and I will say it again a little differently) is that if you keep doing the same thing day in and day out without some crucial changes, you will get what you always get, the same results, with no improvement financially. Learning how to do business in our “new norm,” which we hope might just revert back to the “old norm” is a learning curve that must be practiced and adhered to. But don’t hold your breath for the foreseeable future
I have noticed and experienced through other people’s struggles not only in the real estate industry but in many other industries highly affected by lack of business, such as restaurants and the the hospitality sector as well as what the airlines have been going through.
Incomes in those industries has plummeted and understandably so from the fear and lack of confidence by consumers and not totally being comfortable with eating out, flying on planes, shopping or even staying in five-star hotels.
The answer is not so simple, but if accurate and real facts are put out, which the CDC is trying to so without being influenced in any way shape or manner, then I believe changes will occur more quickly over time. But then again which vaccine with the least amount of side effects will aid all those working or looking for work?
Will we be protected by social distancing at least 6 feet apart, wearing masks and gloves as needed and having hand sanitizer at our disposal in our workspace? Currently, as per National Public Radio which I have found an excellent unbiased source for information in an article on May 8 about one tnird (100,000,000+) are working from home.
I think there has been a huge saving for employees as well as employers due to eliminating travel expenses, saving time for more quality production, and the ability to be with and around your children and family.
This presents some major obstacles due to children learning via computer instead of being physically present in schools and the lack of exercise that they would normally get in gym class.
There are also mental issues that have increased due to the lack of social interaction with fellow employees, the lack off exercise for adults and poorer eating habits resulting in poorer health.
Earning an income in real estate today in this “new norm” requires a superior mentor as well as a receptive agent who is open to new ideas and concepts to either train or retrain what used to function well when meeting clients at properties (if allowed in).
This would lead to accepted offers, inspections, a contract, an appraisal, and then hopefully a closing. To me it’s an “about-face” and what was successful nine months ago back in January of this year may not necessarily work in the same fashion today.
So much has changed with respect to incomes in our industry for a majority of those who weren’t earning a lot to begin with, but now either must retool their thinking and training or leave the business. According to the Bureau of Labor Statistics, the average real estate agent earns $45,990 each year, but the range in income is massive.
One-tenth of real estate agents earned less than $23,000, and 10 percent earned more than $110,000 in 2019; but I have read statistics that up to 24 percent of agents earn over $100,000, which I do not believe is accurate and true. I am continuing to research as to what the average will be in 2020 and I am quite positive that incomes for the majority will be way down. One of the main reasons I have mentioned is not going with the flow and changing the way one does business.
I, for instance, cannot complain and am having an excellent year even though sales for many are down due to the lack of inventory but prices are up. It’s how we approach the “changed market environment” and what we do in our marketing that truly has made a marked difference. I believe if more agents, as well as others in business, adapted to these changes, success can and would be attained. My registered copyright S.A.C.E.D.S. and how we practice and utilize that concept today more than ever has increased our return on investment. If you are curious and want to know what that is and how we practice it, give me a call!
Philip A. Raices is the owner/Broker of Turn Key Real Estate at 3 Grace Ave Suite
180 in Great Neck. He has earned designations as a Graduate of the Realtor
Institute (G.R.I.) and also as a Certified International Property Specialist (C.I.P.S).
Just email or snail mail (regular mail) him with your ideas on future columns with your name, email, and cell number and he will call or email you back. For a consultation, he can be reached by cell: (516) 647-4289 or by email: Phil@TurnKeyRealEstate.Com to answer any of your questions or concerns.
