Each spring, "For Sale" signs pop up alongside the daffodils and tulips. This year, the spring selling season is even more important, because the industry has been in a long slump. This story, the first of three parts, looks at real estate brokers. In the next two Sundays, we'll look at people who are selling and buying homes.
The era of the Sunday real estate agent is gone. A barrage of government regulations, combined with the demands of homebuyers, is making it tougher for real estate agents and builders without business savvy and legal skills to stay in the business.
The weeding out already has begun. Three years ago there were 8,450 real estate agents in the Central Maryland region. Today there are 6,800, according to the Central Maryland Multiple List Service.
The agents who remain have changed their marketing tactics. Using computers, they've developed slick sales materials, complete with computer-generated photographs and market analyses.
Why is the industry changing? That's a subject real estate
agents and homebuilders agree on: Today's buyer is more demanding.
"Buying has changed in the 15 years I've been selling," said Vivian Feen, associate broker with RE/MAX Advantage Realty in Columbia. "It used to be that people would see three houses and boom, they would buy something. People are much more knowledgeable. Woe to the agent who is not on top of things."
"People are more knowledgeable, and they are more critical," said Robert McGee, president of Keystone Homes in Bel Air. "You have to be prepared. The customer is better informed.
"Buying a house is a much more deliberate experience than in the past," he said. "In the past, it was more like buying a car."
So builders, who could count on baby boomers lining up for anything they built during the 1980s boom, are being forced to re-evaluate the market.
"I think the change has been in process for three to four years, but the changes are not caused by the economy, the changes relate to the quality of life people want to live," said Robert Hafer, manager of sales and merchandising for Ryland Building Co. in Columbia.
First-time buyers are looking for low-maintenance houses because both spouses are working.
"Houses can't be seen as an investment anymore. The home is a functional purchase," Mr. Hafer said, noting that today's buyers are staying put for 10 to 12 years, compared with the accepted industry standard of five to seven.
To meet the demands of today's buyers, builders and real estate agents are improving their selling skills. They must become more familiar with legal complexities and they must handle more business chores, such as marketing -- leaving little room for the weekend practitioner.
"They are completely different agents today than they were 10 years ago," said James P. O'Conor, chairman of O'Conor, Piper & Flynn, a Timonium-based residential and commercial real estate firm.
"In the past companies carried the ball to attract listings and buyers." Now the real estate market is more competitive and agents have to do more personal marketing to promote themselves, Mr. O'Conor said.
"In Maryland, real estate was sold 'caveat emptor.' That principle is no longer the case," he added. "That is the most significant change in our industry. Now if you end up with a lemon, you turn to the agent or seller."
Some real estate agents and sellers, afraid of messy lawsuits, are revealing a house's dark secrets to prospective buyers. And buyers are demanding their own inspections.
But sometimes such increased protection doesn't have much impact. A few years ago, when the typical house contract was four pages, buyers read it thoroughly and asked questions. Now that contracts average 12 pages -- including protections for buyers and sellers -- buyers often are overwhelmed and tend to sign without digesting the contents, said Melvin Knight, a realty agent in the Roland Park office of W.H.C. Wilson Real Estate.
Real estate agents also are turning to technology to update their business skills.
A division of the Central Maryland Multiple List Service is marketing computer software that puts data such as tax assessment and property deed records along with house information into a standardized format.
Realty agents are using that information to put together sales presentations on desktop publishing systems. Their clients get a professional-looking proposal with a 45-page analysis of the market, including data on recent sales, said Warren Tunkel, executive vice president of Central Maryland Multiple List.
Meanwhile, many realty agents, who once reproduced the multiple listing to give prospective buyers as a hand-out flier, are now producing their own sales brochures. Or they're using a new service by Mousepad Graphics in Baltimore, offering desktop publishing services in three standardized production formats to keep costs low.