To be or not to be? That is the question

Those in the industry need to work a lot harder these days in order to succeed, rather than just to "survive". I get the feeling that some experienced professionals would rather give it up than pick up the pace.

First, let me ask you (the realty agent and mortgage broker) this. If you are looking at closing up shop based on the current economic state, what do you plan to do from this point? What looks like a better opportunity to you?

I contact an average of 300 mortgage lenders per week around the country that I am not currently doing business with. Over the past two months, I find an average of higher than one per day that I had contacted previously that how has or is shutting down or is already disconnected. Yet, I haven't read or heard about another industry that is aggressively growing via sales.

On the realty agent side, my feeling is that the final two months of the year will see a reduction in the number of realty professionals out there. I was working in Southern California in the early 1990's when the joke going around was "If stopped by the police, you can show either your Real Estate License or your Driver's License, whichever is handy". Agents were part-time, full-time, any time, and all the time.

As we come toward the end of the year, it will be association dues time for hundreds of thousands of agents. My gut feeling is that a sizeable percentage will look at spending hundreds of dollars (and thousands in the case of numerous association memberships) in an uncertain marketplace and decide not to renew their license. They may take the "when the market picks up I'll get back to it" approach.

I think everyone loses if that happens. Consumers will lose out if there are way fewer realty agents to choose from. The remainder will figure they won't have to work as hard and consumers will receive even less information and need to track down agents instead of being courted.

Agents and lenders will collectively throw away years of exerience and expertise, perhaps to embark into an industry they are inexperienced in and have to start at the bottom of.

Meanwhile, for those who know that thousands of home sell every month in any market, it is time to develop a creative plan of attack for the coming holiday season and to start 2009.

For example, the "rent to own" market continues to be underserved. I can't believe how very few ads I see about this concept.

Let's say you have already moved out of a house or condo and are stuck with a monthly mortgage payment in addition to the payment on your current home. If nobody is buying right now, then you need to get something toward your payment. If it were me, I would be all over my realty agent to bring me a potential buyer looking in my area who hasn't been able to qualify for what they need. (And these days, that shouldn't take more than an hour!) I would make them an offer to "rent to buy", starting off at a rent below comparable market value for a rental.

I would get them in at a very reasonable rental price for 3 to 6 months. Even if I am not making enough to cover the mortgage, it is far better than having it sit empty and getting nothing for it. Have a provision that after 6 months (or the pre-determined time frame) they can buy it from you for only a slightly increased monthly payment. This increase would bring their monthly fee up to the amount of the mortgage on this property or slightly higher. For example, if your mortgage payment is $1,644 per month, make their "rent to buy" fee $1,700 per month.

You are, in effect, providing them will seller financing. The "renters" will take good care of the place if they may own the place, along with handling some of the maintenance for you.

When the time comes and they want to "rent to buy" you can accept their down payment and go from there. If they do not wish to stay, several months will have past, giving you the chance to assess the local marketplace. You can try to sell again, find another "rent to buy" possibility, or somewhere in between.

Yet, I don't recall the most recent time I saw any advertising for "rent to own". The marketplace demands this and other options.

So if you are an industry professional and are about to pay your association dues for the coming year, now is the time to plan your approach. There is no shortage of elbow grease.