Realtors with two or less years of experience earned a median income of $12,850 in 2004, according to the latest member survey by the National Association of Realtors trade group, while members with six to 10 years of experience earned a median $58,700.
The 2005 National Association of Realtors Member Profile, last conducted in 2002, also found that Realtors with at least 26 years of experience earned $92,600, up 37.2 percent from two years earlier.
David Lereah, chief economist for the association, said, “People who have been selling real estate for a while are seeing healthy income growth, while newcomers need time to establish themselves,” he said. “Real estate agents build their business over time through referrals and repeat business, which is how most people learn about the agent they choose. Consumer surveys have consistently shown that both home buyers and sellers rate reputation and knowledge of the market as the most important criteria in choosing a real estate agent or broker, and these results underscore those findings.”
The median income of a real estate broker in 2004 was $52,800, while sales agents earned a median of $37,600. Another gauge shows that successful professionals are growing their incomes – for members earning more than $25,000 per year, median income increased 7.2 percent from 2002 to 2004. Few Realtors receive fringe benefits, largely because the vast majority work as independent contractors, the association noted.
Rapid member growth has distorted median income figures. The median gross income of all Realtors declined 5.6 percent between 2002 and 2004 to $49,300, while at the same time NAR membership totals increased 26.6 percent to 1.1 million.
Al Mansell, association president, said rapid growth in membership has paralleled increases in home sales. “When we look at the relationship between members and sales in comparison with the last survey in 2003, we see the business activity for a typical member is fairly stable,” he said. “This means the industry has been able to accommodate rapid growth and create new jobs.”
In 2004, the typical sales member sold two of their own listings and six of someone else’s listings, while other Realtors sold five of their listings. The median sales or leasing volume was $2.2 million in 2004, up from $1.8 million in 2002.
Among sales members, the median number of transaction sides handled last year was 12, equivalent to six full transactions. In 2002, the median number of transaction sides was slightly higher, at 13. “In other words, the large number of newcomers – about 165,000 people in the last year – hasn’t had a significant impact on overall business activity for the typical Realtor member,” Mansell said.
The 2005 National Association of Realtors Member Profile was based on a survey mailed to 120,000 members and generated 8,450 usable responses, representing a response rate of 7 percent. The survey covered demographic data, current business attributes and technology use.
The typical member is 52 years old, works 46 hours per week, and has been in the business for nine years; however, 15 percent of members have been in the business for one year or less. Overall, 54 percent of members are women. Realtors have been with their current firm for a median of four years, and only 15 percent work fewer than 20 hours per week.
Members are optimistic about the future, with 84 percent saying they are confident they will remain active in the business during the next two years; only 4 percent were uncertain. The member profile shows 15 percent are fluent in languages other than English, while 9 percent of respondents were born outside of the United States.
More than one-third of Realtors hold only a sales license, 43 percent have a broker associate license, and one in five hold a broker’s license. Although members may hold more than one license, their functions sometimes differ. For example, one-quarter of broker licensees work primarily as sales agents. Three-fourths of NAR members specialize in residential real estate; 20 percent have a secondary specialty in relocation; commercial brokerage and land development registered 16 percent each.
Buyer agency is a large component of member business, with 38 percent offering both buyer and seller agency, and another 11 percent providing exclusive buyer agency.
Home offices are popular, with 71 percent of Realtors reporting they have one for business purposes. Technology plays a critical role, with cell phones and e-mail being used almost universally; the vast majority of members use digital cameras, and 32 percent use PDAs on a regular basis. The most popular software is multiple listing, with 76 percent using it daily or nearly every day, and another 11 percent using it a few times per week. Comparative market analysis software is used somewhat less frequently, but is used by nearly 90 percent of Realtors, and roughly four out of five use electronic contracts and forms.
Forty-four percent of members communicate with clients by e-mail more than 50 percent of the time; a quarter use instant messaging. Nearly nine out of ten respondents report their firm has a Web site, 44 percent of individual members have a personal Web site and another 16 percent plan to have one in the future. The typical member generated 10 inquiries from his or her Web site last year, and received 5 percent of business from that site.
Approximately one in five members has at least one personal assistant. Eight out of 10 personal assistants process new listings and enter them into a multiple listing service, and two-thirds photograph listings, send mailings and manage paperwork. Just over half of personal assistants hold a real estate license, according to survey results.
Many NAR members hold at least one professional designation, with the most popular being GRI (Graduate, Realtor Institute), held by 18 percent of respondents; ABR (Accredited Buyer Representative), 11 percent; and CRS (Certified Residential Specialist), 9 percent.
Some NAR members are involved in ancillary services, with the most common being mortgage brokerage, mentioned by 5 percent, followed by title insurance or processing.
Half of NAR members are affiliated with an independently owned, non-franchised firm. One-third are affiliated with an independent franchised firm, while 17 percent are affiliated with a national or regional firm. Among brokers, there has been little change over time – one-third are affiliated with an independent, franchised firm; though the share among agents with such affiliation has shrunk from 43 percent in 1996 to 36 percent in 2005. Ten percent of members report they work for a firm that was purchased or merged with another firm since January 2003, but 70 percent remained with that firm.
Realtors are well educated, with 46 percent holding at least a bachelor’s degree compared with 29 percent for the U.S. labor force as a whole. Only 5 percent chose real estate as their first career; 18 percent worked in management, business or financial services before entering the field; followed by sales and retail, 15 percent of members; and office or administrative support, 9 percent. Seven out of 10 are married, compared with 53 percent of all U.S. households.
Sixteen percent of members own at least one vacation home. Additionally, 39 percent own additional residential properties for investment (outside of primary residences and vacation homes), and 13 percent hold an ownership interest in at least one commercial property. “Realtors put their money where their mouth is – they believe in the value of real estate as an investment and act on those convictions for the benefit of their families,” Mansell said.
Realtors participate in the political process more than other segments of the population, with 94 percent registered to vote in comparison with 66 percent for the United States as a whole.
The full 2005 National Association of Realtors Member Profile cost $35 for NAR members and $75 for non-members and can be ordered by calling (800) 874-6500.
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