Agents Aplenty

Career-Jumpers Looking For Easy Commissions Made a Low-Percentage Play

Jamie Finch said goodbye to a high-pressure job in New York and "more money than I ever thought I'd make" to return to Washington 20 months ago and try his hand as a real estate agent.

He jumped into a field that seemed to be on fire at the time. Houses were selling in a day, with bidding wars epidemic. Potential buyers were camping out overnight at new-home projects.

Finch may have anticipated making money when he came back home, but he may not have known he'd be working just as hard -- the pace in the Washington real estate biz has proved to be pretty exhausting. And extremely competitive.

And maybe, with the market slowing, not the best job to be fantasizing about now.

Seduced by the housing boom and its promise of ever-higher prices with ever-bigger sales commissions for agents, the number of licensees in Maryland, Virginia and the District has just about doubled in the past six years, according to local licensing agencies, with the Northern Virginia real estate association adding about 300 new agents a month. Nationally, the number of licensees was at a record high of more than 2.5 million at the end of 2004.

There are so many real estate agents locally, said Susann H. Haskins, president of the Realtors' association that covers Montgomery County and the District and a broker for Long & Foster, that "the joke these days is that when the police ask for your license, they're not going to ask for your driver's license, but your real estate license."

The 143,000 agents in the area certainly didn't have to be dragged into the field as home prices skyrocketed. On a $600,000 sale, the traditional 5.5 or 6 percent commission -- which the selling broker and agent usually split with the buyer's team -- would be about $36,000. Even discount brokers who charge sellers between 1 and 2 percent for putting houses into the local multiple-listing system would be looking at a $6,000 to $12,000 slice of that particular action.

Not bad when buyers were begging for houses.

But even though movies such as "American Beauty" may make real estate seem glamorous and filled with Jaguars, it's basically a sales job -- and not one for the weak of heart or pocketbook, say the pros. It's a business built on marketing and long referral lists. And as the market seems to be cooling, experts say, the half-hearted and unprepared may soon be heading for the exits.

"In January, when [association] dues are due, we will see a lot of dropouts," predicted Haskins of the Greater Capital Area Association of Realtors.

"What you're seeing now are a lot of people coming into the business thinking they can make a lot of money quickly and easily. But they often have no idea of the hours that you have to put in, or the commitment. And they will not last very long," said Haskins.

Meanwhile, people such as Finch and W.C. & A.N. Miller Cos. sales agent Anslie Stokes have been demonstrating just how much creative effort it takes to compete in the field.