Picture Was Distorted
Regarding “Real Estate: Comeback’s New Terms” (Part I, Page 1, May 30), I believe some of the examples given in the article provided a distorted picture of our industry.
With regard to the real estate firm that went from 45 employees in 1978 to only two in 1985, I would question how many employees that company had in 1975 and I would guess the answer might be five.
You are comparing 1978, which was probably the wildest and most “insane” market that ever existed, to the worst real estate market since the Great Depression. As you correctly stated, the business has changed, and only the strongest have survived relatively intact. Many companies, including ours, never had to close any offices during the real estate recession, but actually continued to expand.
The number of salespeople in our firm never dropped, even during the worst of times. People just had to work harder and be more professional to keep their production on par with their previous earnings.
With regard to the comments about continuing education requirements, our company, as well as many others, had a continuing education program before the Department of Real Estate required one.
It is really not true that commissions of $100,000 a year were common among salespeople.
Even during good times, the percentage of salespeople earning six-figure incomes was relatively slim, despite what some in the industry would have us believe.
According to California Assn. of Realtors’ statistics, in 1978 the median earnings for salespeople were $14,998, and the median earnings for salespeople in 1983, which are the most recent figures available, were only $16,110.
The article also mentioned that consumers could have saved a small fortune if there had been a 1% reduction in the commission rate, and yet the earlier part of the article mentioned how many offices closed and how many people went out of the business.
Clearly, if real estate commissions were too high, this would not have been the case.
In today’s environment, with adverse court decisions, exorbitant insurance costs, as well as the increased cost of doing business, it only allows the most professional to survive, and the most dedicated to succeed.
FRED SANDS
President, Fred Sands Realtors
