Why People Enter the Real Estate Sales Business

By Webb, Jame R.; Seiler, Micheal J. | Real Estate Issues, Fall 2001 | Go to article overview

Why People Enter the Real Estate Sales Business


Webb, Jame R., Seiler, Micheal J., Real Estate Issues


INTRODUCTION

Turnover in the real estate sales business is reputed to be one of the highest in all job categories. Estimates from interviews performed with real estate brokers range from 50 percent within two years to 98 percent within five years.

While no studies have attempted to accurately estimate the turnover of real estate sales people, all agree that it is very high. The purpose of this study is to ascertain why people enter real estate sales. Since so many people exit in a relatively short period, it would seem that their expectations upon entering are not met and are, perhaps, not realistic. If this is true and expectations upon entering can be altered, then the high turnover rate can possibly be reduced.

LITERATURE REVIEW

House(1977) suggests that high turnover in real estate sales can be attributed, in part, to the non-routine, problematic, and irregular work hours involved. He argues that real estate agents must be ready to see prospective clients at almost any time. This, coupled with the commission-based pay structure, which makes income irregular and uncertain, leads to a low success rate for new agents.

Wotruba(1991) contributes high early failure rates to the "sink or swim" philosophy followed by most real estate firms. The marginal cost of providing desk space and secretarial service for a new salesperson is low and so too is the time spent screening and training new agents. If the new agent becomes successfully established, the company profits. If the agent fails, the firm can easily and inexpensively hire a new recruit to replace him/her. Moore, Eckrich, and Carlson(1986) suggest that early failure rates could be greatly decreased by implementing basic screening procedures. They studied the skills and characteristics needed to be successful in sales and produce a hierarchy of importance among 82 sales competencies.

Since failure rates are so high, why then do so many individuals seek to become real estate sales agents? Barth(1964) explains that many new real estate sales people are primarily entrepreneurs that are willing to work hard for a living, but lack formal education and financial capital, which are necessary to be successful in other careers. Other explanations for real estate sales entry include ease of entry, low screening procedures, and the independent nature of the work [House(1977)].

RESEARCH DESIGN

The research design was a questionnaire. Fourteen questions, (13 closed-ended and one open-ended) were mailed to 1,500 randomly selected people who recently entered the real estate sales business in the state of Ohio. (Entering real estate sales people were defined as those who recently received sales licenses in the state of Ohio.)

The surveys were accompanied by a self-addressed return envelop and a cover letter emphasizing the importance of the study in an attempt to raise the response rate. Appendix A contains a copy of the questionnaire used.

A second group, consisting of 1500 individuals who recently exited the real estate sales business, was also mailed questionnaires. The attempt was to learn, ex post, of the relationship between expectations when entering real estate sales and the realization once exiting. Unfortunately, a parsimonious response rate of only 1.1 percent (17/1500) rendered the comparisons unattainable.

RESULTS

Entering Real Estate Sales

Of the 1500 surveyed, 418 people returned useable questionnaires. This is a response rate of 27.9 percent. Exhibits I - 6 show the geographical location, affiliation, gender, age, education level, and household income, respectively, of the respondents.

As would be expected, the larger response rates are from the population centers and the highest response rate is from the source of the survey (northeast Ohio). Southeast Ohio is sparsely populated, when compared to the other parts of Ohio, thus contributing to its low frequency of responses. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

Why People Enter the Real Estate Sales Business
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.