During pre RESA times, in the 1990s, I was into project selling. More than 200 brokers were hired by the developer. The developers did not shun away brokers who applied in the sales team (why would they? The more brokers, the more agents, the faster the projects will sell!) and we are being managed by non-brokers who are marketing and business admin graduates and some even have masteral degrees who are more qualified and competent to do sales management. They’re NOT selling.
I, as a broker had around 150 agents, but the catch is, not everyone is selling, you see, the drop out in our industry is very high, I read in one real estate sales book, that only 10% actually made it in real estate! 90% drop out! The turnover rate is very high!
Meaning, if you have 100 agents, only 10 agents are actually focusing and selling, and that’s a fact! I had 150 agents and only about ten were serious into the business. Now, with a 1:20 rules, only about 2 will actually work. Some, in my experience, dropped out already even before their PRC Accreditation is released. And the poor broker cannot hire a new one, coz their licenses are tied up with the drop outs.
And how can a broker or a project survive with only 2 agents per broker working?
You need to have at least 200 agents if only 10% will really work to get 20 working agents, or 100 if we are lucky to get 20% of them selling!
And how about the big developers, who have thousand of inventories? How can they sell their properties with only 2 or 4 agents actually selling per broker?
You cannot help the small players by killing the big ones who provides for the opportunities for the small ones.
You cannot help the poor by killing the rich!
And even, for the purpose of argument, a broker is allowed 1:5,000 ratio, who in his right mind will hire only 1 broker to sell his entire projects? That’s stupidity! These developers are big simply because they are smart businessmen.
Of course, they will still go after brokers with many agents who can sell the properties just like during pre-RESA. You see, it’s a numbers game. So it is not true that there will be less opportunities for the other brokers. The need for brokers will never be satisfied. Simply because, it also follows the numbers rule, only about 10 to 20% of them will actually work.
Just sharing my thoughts.