Housing correction isn’t deterring agents-in-training

CHESAPEAKE

Sam Lowry scribbled notes at the back of a classroom at the Alpha College of Real Estate.

Jobless for almost a year, the 25-year-old Chesapeake native was trying for his second time to get through the real estate course, which he must pass to take the state exam for a real estate license. He took the class last August but didn’t pass part of the final test. After taking some time off, he came back to review and try again.

For Lowry, selling real estate represents an opportunity to leave behind the backbreaking labor of his previous job stacking soft drink displays at convenience stores.

“I figured if I’m a real good people person, it shouldn’t be too hard to be a middle person to negotiate between a buyer and seller,” he said.

It takes a certain amount of optimism to want to become a real estate agent in the midst of the biggest housing correction in decades. Home prices have fallen, sales slowed and foreclosures soared in the past five years. And agents have left the business in droves.

Since peaking around 8,000 in December 2007, the number of agents who maintained active memberships with Hampton Roads’ multiple listing service plunged to 5,800 last month, the Real Estate Information Network reported.

If he passes the final exam, Lowry plans to sit for the state test in a few weeks and begin working as an agent by March. The freedom of being able to set his own schedule and earn good money is alluring, and the current real estate market doesn’t worry him, he said.

“I feel like it’s capitalizing on the fact that a lot of people are getting out of the business,” he said. “One thing that a lot of agents and brokers are saying is that the market is picking back up. So I’m just going to put myself out there as an agent, and whoever calls on me, I’ll help them out doing whatever they need to do.”

Two weeks ago, Lowry sat alongside 21 students who aspired to become real estate agents in the classroom at Alpha College, just off Battlefield Boulevard.

The school is one of several in Hampton Roads offering the 60-hour course, which is required before individuals can take the $60 state licensing exam. The men and women in the class ranged in age from their mid-20s to late 60s. For many, real estate will be a second career.

They watched as veteran real estate agent Howard Williams wrote two dates on a dry erase board and asked: If a contract to buy a home was signed on Jan. 1, but the contract calls for a home inspection by Jan. 10, which date is considered the ratification date?

One by one, Williams pointed to each student for a response. Most answered correctly: The first date.

“Ratification date is the date that all terms were agreed to,” he said. “Does it have anything to do with contingencies? No. I want you to be clear and not debating this in your mind.”

Throughout the morning, the boisterous Williams quizzed the students on aspects of real estate law, such as how escrow accounts work and knowing when and what to disclose during the sales process.

“We’ve got two days of Virginia law,” he said. “I’m hitting the bullet points for you.”

The students, who spent $360 to take the course, already had spent two weeks under Williams’ tutelage. Only a few more days remained before their final exam.

Recruiting new agents has become crucial for the region’s real estate firms in recent years.

“You have to be in the recruiting business or you’re not in the real estate business,” said Dick Thurmond, president of William E. Wood and Associates.

His firm recruits heavily from Alpha College and other real estate schools. About 40 percent of the agents his firm recruits are new to the business, he said.

“We’ve got a really good new agent training program,” he said.

In addition to agents leaving the business, Thurmond said he’s also seen a drop in the number of people taking classes and getting licenses, partly because of the difficult sales market.

“It’s been very lean in the last year in particular,” he said. “The reality of it is, it’s a hard business. A lot of work, a lot of long hours. And it doesn’t come easy.”

But he said he expects the decline to bottom out this year as the home sales market stabilizes.

M.C. Danner, 52, also was among the students in Alpha College’s recent class. Before considering a career in real estate, the Virginia Beach resident worked for several years as a morning radio personality and as a casting director for a local voice-over recording studio.

“I wanted to try do something I could control my time a little better, instead of being at work all day long and all night long,” she said.

After she dabbled for a while as a florist, a friend told her about a local property manager who was looking for leasing agents. In order to be a leasing agent, she has to get her real estate license.

“As much as I’ve been in communications and media, I’ve never considered myself a salesperson,” she said. “I always find myself in situations where I’m getting people to cooperate together. And I thought, I love my home, so maybe it would be fun to help people find their home. Home is the nucleus of everyone’s life.”

Danner sees the current market as an ideal time to learn to be a sales agent. As she figures it, once she has her license and learns the ropes, she’ll be in a good position once the market picks up.

“It does make me nervous, because I’ve never done it before and it is a major decision,” she said. “It is daunting. But I’m a hard worker. So I’m just assuming that it will be hard.”

While many of the students were in midcareer transitions, for Bob Scott, 68, real estate will be his third and probably final career.

A Virginia Beach resident, Scott spent 21 years in the Navy, working part of that time as a pilot. After leaving the military, he spent another 21 years working for an engineering consulting defense contractor. He retired in August.

“I’m a firm believer you’ve got to keep your brain active, and this is an ideal business to do this in,” he said. “My other choices were stay at home, cook and make birdhouses.”

Scott’s situation also is unusual in that he won’t be starting from scratch. His wife has been an agent for 31 years, and he’ll work with her.

“My wife, having been in the business so long, she has an established clientele,” he said. “I’m just going to be the assistant gofer.”

Like the others, Scott is confident that a recovery in the housing market is around the corner. But he doesn’t envy new agents starting out in this market to establish a name for themselves.

“I think you’d have to have a lot of self-assurance to do it with no backing whatsoever,” he said. “It’s not uncommon in this business that you can spend six months without anything to show for your efforts. I think I’d be scared to death.”

Josh Brown, 757-446-2318, josh.brown@pilotonline.com