Agents are looking to their brokers for guidance, an expert says, and could jump ship if they don’t feel supported.

The chilly wind blowing through the Massachusetts housing market this fall has pushed brokers to launch a range of initiatives aimed at helping their agents survive and thrive in 2023. 

November real estate sales figures reported by The Warren Group, publisher of Banker & Tradesman, last week showed single-family sales were down 29 percent year-over-year, while condominium sales had fallen 22 percent on the same basis. That translates directly to fewer transaction sides for agents – and their brokers – and less income, even as the year-to-date median single-family sale price is up 38 percent and the median condo sales price is up 29 percent over November 2019. 

“If your average agent is going to lose one-fifth of their income, they’ve got to eat somebody else’s lunch,” said Linda O’Koniewski, CEO of Leading Edge Real Estate. 

Interviews with leaders at many of Massachusetts’ biggest residential brokerages show executives are broadly attacking this revenue problem from three angles: making sure their agents are ready for next year’s challenges, looking for ways to induce prospective sellers to list and rolling out the welcome mat to any agents interested in defecting from the competition. 

Training Blitzes 

O’Koniewski said she saw the current tough market coming over the summer and launched a seven-week refresher program for agents in July.  

“We went all in on skill-building, on understanding this market,” she said, saying the course covered everything from “the art of the price reduction” to more complex ways of analyzing market data. 

This is the second in a two-part series examining the challenges brokerages face in 2023.

Pauline Bennett, president of Coldwell Banker New England, said her agent-education team has a “packed” January schedule buffing agents’ skills. The company has also bought its agents access to MoxiWorks, a suite of tech tools that combines lead prospecting, streamlined marketing, market analysis and pricing advice. 

Moves like this make sense to set agents up for success, but also keep them loyal and happy in what’s bound to be a stressful year, said Bernice Ross, a nationally-syndicated real estate columnist, consultant and trainer. 

“The number-one reason that agents leave their broker is because their broker didn’t have their back. They want to know that their broker has expertise and the coaching to help them in a time like this,” she said.  

For his part, Gibson Sotheby’s International Realty co-owner and chairman Larry Rideout said, he and his team are putting in significant time networking around the industry so that “agents who are skeptical of where they are will find us.” 

“I don’t have investors to please. We make our own decisions. And I think that’s an advantage right now. We think about the heart and soul of our industry. Agents see that and know that,” he said. 

Jolting Stuck Buyers 

If a big part of the reason the Massachusetts housing market has seized up is a long-term lack of housing construction, and another major cause is not enough sellers in the market. Facing home prices that at least 30 percent of Americans think will fall in the next 12 months, according to the November edition of Fannie Mae’s monthly Home Purchase Sentiment Index poll, and mortgage rates most think will keep rising, many are staying put. 

“Now eventually this will wear off – how long can people who need to sell wait? Death, divorce, parents moving in with kids – all these things happen eventually,” said Anthony Lamacchia, owner of Lamacchia Realty. 

But some sellers are susceptible to being jolted from this paralysis in time for the spring market, he and other brokers think. 

O’Koniewski, the Leading Edge CEO, has set her sights on Baby Boomers who are ready to downsize but are finding it overwhelming to pull the trigger. 

“They probably don’t even owe any money on their house but they don’t know what to do with their stuff. They’re worried about heating these big houses even if they only live in four rooms,” she said.  

The brokerage has been running seminars targeted at these sellers that package information and skills needed to handle the financial and logistical details particular to downsizing with humor and visuals of amenities like new kitchens that downsizers can aspire to. 

“It’s a reach-out. Even if people don’t buy with us, you’re making a connection” that can turn into a referral, O’Koniewski said. 

Buydowns and Back Doors to Low Rates 

Lamacchia is targeting the market’s ever-present affordability challenge head-on with a pair of marketing campaigns that he hopes will get some sellers to reconsider their belief that they can’t afford to trade up.  

One tries to raise buyers’ and sellers’ awareness of assumable mortgages – a provision in FHA or VA loans that allows a buyer to take over the seller’s mortgage instead of paying it off, along with what is likely an ultra-low interest rate – and the ability of Lamacchia Realty’s in-house database to match qualified buyers with applicable sellers. 

James Sanna

The other is focused on new, related Fannie Mae, FHA, VA and Freddie Mac products colloquially called “two-to-one buydowns,” where the seller gives a buyer a credit, instead of reducing a home’s sale price, that then goes into an escrow account that the buyer uses to temporarily buy down a loan’s interest rate for the first two years of the loan.  

“For the sellers it’s great because they can motivate buyers to stay in the market and do a deal. It’s a better alternative to reducing the purchase price to entice sellers to do a deal,” said Guaranteed Rate loan originator Shant Banosian, who has worked with Lamacchia agents to facilitate such loans. “It’s been a big hit.”  

The bet buyers make is that they will be able to refinance a 6.5 percent loan, for example, to a lower interest rate before the buydown expires or their income will go up to make such an interest rate less financially grating, Lamacchia said. 

“Is it going to get sellers to raise their hands? Is it going to get sellers to move? We’ll see,” Lamacchia said. 

Correction 12:56 p.m., Dec. 28, 2022: This story has been updated to correct the spelling of Linda O’Koniewski’s name.