The Real Estate Industry is a Mosaic in the Economy: Part One of a Series

The Real Estate Industry is an integral part of our national economy, a mosaic of so many pieces and parts of our economy. In this new era of uncertainty, let's take a look at the how and why Real Estate is such an important part of the future recovery of our economy.

Just as a mosaic is composed of hundreds of pieces of glass, stone or some other material, the real estate transaction is also composed of many parts contributing to the whole (the economy.) A successful transaction in Real Estate puts many people and industries back to work, with money in their pockets to spend. In this series we will look at many parts of the transaction and how important it is to the economic recovery we all so desperately need. Today, we will focus on the Real Estate Agent and Brokerage Firm.

It would be undeniably simple to consider the real estate agent as one individual, working in a vacuum on a real estate transaction, separate from the complete picture of our economy. In truth, when an agent goes to work on one single transaction, money goes into the economic pot. An agent at work puts money into circulation by purchasing necessary goods and services to continue working. The agent will purchase gasoline, may purchase lunch or drinks, will certainly at some point have purchased technological components of their business and continue paying for these instruments and their required updates and fees, i.e. a cell phone and a usage plan, paper for printers, ink or toner, cameras, video cameras, software to manage these items. Brokerages training new agents maintain lists of must have items and services that a new agent starting a new business needs. From business cards, to name tags, signs, sign riders, lock-boxes, computers and database maintenance programs...to a decent and relatively presentable automobile. In essence, the agent at work will spend money, contributing to the economic statistics that are reported quarterly.

Some Brokerage firms will provide some of these items for their agents, and they then assume the Accounts Payables to maintain the services and items necessary to maintain an ongoing business. Some even contribute to health insurance costs for staff members and administrators and managers. In addition, they write the paychecks for staff members, administrators and managers, which provides for an additional set of employees to contribute to our economy and continue to spend, to put money back into circulation.

Why is this important to economic recovery? The Real Estate Industry is an important piece of the economic mosaic, because putting money back into circulation, spending, is a huge part of the economic picture. Without this small portion of the business occurring across the nation, millions of times over, a huge chunk of the national economy suffers. Retail Sales go down, services (insurance, medical, etc.) spending goes down. And we definitely need individuals and families to be able to spend, not just on necessities, but also on entertainment, good and services.

Next issue: Another Piece of the Real Estate Transaction Mosaic