Realtors and Loan Officers
 

The problem with the industry is two fold.

1. Incentives aren't aligned to help customer.

2. Too much fat in the industry. You can measure fat by doing a time study on the activities of realtors and loan officers and determining how much is value added to the customer. Most of what they do is prospecting for new customers. That means the commissions are too high and there are too many of them in the field. Commissions need to be driven down and #s of realtors and loan officers should be driven down to the point where they are providing value add with their time. A new customer is worth so much and the time spent with a customer is so little in real estate that a realtor can spend 70% of his time prospecting. If that number were cut in half, commisions would be cut in half, # of realtors would be cut in half, and realtors would make the same money.

We are already seeing a correction in both industries. Many, many people jumped in to become realtors because of the boom and the thoughts of 'easy money.' Now that the market is stumbling around, many realtors have little work and get out of the business or the work becomes harder and they are no longer interested in it.

The market corrects itself a bit, it drives down the realtor numbers. Happens the same with loan officers...bad ones no longer get business as they did when there was a ton of work and they are weeded out.