With housing prices likely to rise through the year, Commission Express advises real estate agents to have a plan for money management.
All the experts have weighed in on expectations for the 2018 housing market, and it seems clear to everyone that prices are likely to increase. The National Association of Realtors reported an expected increase of 5.5 percent during the year, while other organizations are coming in slightly lower. A spokesperson for Realtor.com predicted an increase of 3.2 percent, for example.
What all the reports do seem to agree on is one reason for rising prices: a shortage in inventory. Whether shortages and pricing trends impact real estate agents in 2018 depends on factors such as the agent’s location and target audience. Entry-level homes, for example, are still in short supply, and that sector of the market may continue to experience a supply and demand imbalance throughout the year.
Some experts are noting that a growing market will eventually turn into growth in development and building. Zillow’s chief economist, Svenja Gudell, wrote in her report on the shortage that “builders. . . will not ignore a hungry market.” A few reports and industry predictions seem to agree with Gudell’s, with some even predicting that supply trends will alter in a positive direction as early as this fall.
What does all this mean for real estate agents? The short answer is that agents are likely to have similar experiences in 2018 to what they did in 2017. People are still buying houses, and the market is trending upward in many areas. At the same time, agents may find that while higher prices mean more valuable sales, they also could mean more time between sales.
Real estate agents can still be highly successful in the market, but they do need a plan, says Commission Express. Cash flow between home sales is important and makes it easier to both conduct business and live life.
One thing real estate agents and brokers might consider when planning financially for 2018 is a commission advance program. Real estate commission advances let agents receive funds for a sale prior to closing. An agent who has numerous sales pending might experience a cash shortage — and closings can be scheduled weeks or even months in advance. An advance on the commission allows agents to create a more consistent cash flow even when home sales may come in sporadic waves.
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