Median gross income for the typical Realtor rose for the first time since 2002 last year, though net income fell, according to the National Association of Realtors’ 2012 Member Profile.
The median gross income of a Realtor increased 2.3 percent to $34,900 in 2011, with brokers and broker associates earning a median $48,400 and sales agents earning a median $27,200.
After taxes and expenses, however, net income fell 5.7 percent last year for Realtors overall, to $23,200. Brokers netted $30,800 compared with $17,900 for sales agents. More than half of Realtors had median net incomes of less than $25,000 last year.
"Many Realtors have persevered through very difficult market conditions and understand the cyclical nature of the business, but have never had to endure a cycle like the one that is presently waning," said Paul Bishop, NAR’s vice president of research, in a statement released today.
"The good news is home sales are rising, overall activity is expected to be notably better this year, and individual prospects are much brighter given there are fewer Realtors than several years ago."
The survey profile is based on 6,245 responses from NAR members. Statistics for compensation, earnings, sales volume and number of transactions correspond to calendar year 2011; the rest are from early 2012.
NAR members in the business for 16 years or more earned a median gross income of $50,200, while those in the business for two years or less reported a median income of $8,700. Seventeen percent of Realtors earned a six-figure income, according to the profile.
The survey showed 81 percent of Realtors worked as independent contractors. Just under a quarter, 23 percent, were covered by errors and omissions insurance, and 6 percent of all Realtors receive health insurance through their firm. The typical Realtor works a median 40 hours per week, unchanged for the past several years.
Some 78 percent of members reported using smartphones daily or almost daily in 2012, up from 72 percent last year and 56 percent in 2010.
More than half of Realtors (54 percent) reported actively using social and professional networking sites. That’s up from last year’s profile, when 49 percent of members did. The youngest Realtors were most likely to use social media: 84 percent of those 29 and younger did, compared with 42 percent of those 60 and up.
The same proportion of members had a blog this year compared to last year and compared to 2010 (10 percent), and about the same proportion reported having a website (62 percent). The average Realtor spent $200 to maintain his or her website, down from $250 last year. Those websites had been operational for a median six years and typically accounted for 3 percent of a Realtor’s business, unchanged from the past two years.
A slightly lower share of Realtors used digital cameras daily or almost daily in early 2012 compared to last year (27 percent), though a slightly higher percentage used instant messaging (35 percent) and GPS (32 percent).
Annual business expenses for the typical Realtor rose nearly 6 percent in 2011 to $4,520. While brokers typically had higher business expenses than sales agents, expenses for brokers fell nearly 10 percent in 2011, to $5,580.
Previous NAR member surveys show that as the housing bust began, median business expenses paid by Realtors overall — brokers, broker associates and agents — dropped from $6,580 in 2007 to $5,810 in 2008. Median expenses for brokers were $8,710 in 2008.
Increase in dual agency
Forty-three percent of Realtors practiced disclosed dual agency in this year’s survey, compared with a third last year. Brokers and broker associates were more likely to double-end a deal through dual agency, with nearly half (47 percent) reporting having engaged in the practice. Forty percent of sales agents said they’d engaged in dual agency.
The share of Realtors practicing transaction brokerage — in which a brokerage company or individual licensee can facilitate a transaction for both a buyer and seller without owing fiduciary duty to either — fell to 9 percent, down from 18 percent in last year’s survey.
Nearly a third of Realtors, 31 percent, practiced single agency, while 10 percent of Realtors represented buyers exclusively. Nine percent represented sellers exclusively.
According to statistics several multiple listing services around the country provided to Inman News for a series of stories on dual agency, same-office and same-agent sales had been on the decline in recent years.
Unchanged from last year’s survey, 57 percent of Realtors participating in the survey were licensed as sales agents, while 45 percent were brokers or broker associates. Three percent were appraisers.
Citing data from the Association of Real Estate License Law Officials (ARELLO), NAR said its membership accounted for about half of the nation’s 2 million active real estate licensees.
At the end of April, NAR’s membership stood at 971,741, down 3.8 percent from April 2011. The trade group’s membership nearly doubled during the decade leading up to the housing bust, growing from 700,000 in 1996 to a peak of 1.37 million in October 2006. Membership has been falling ever since, dipping below 1 million in January for the first time since March 2004.
Brokerage sales volume in 2011 was a median $1.3 million, up from $1.1 million in 2010. Realtors completed a median 10 transactions in 2011, up from eight the year before. Six percent did not complete a single transaction in 2011, down from 8 percent in 2010.
Realtors typically got one-fifth of their business through referrals from past clients, and 19 percent was repeat business. Real estate was the sole occupation for 76 percent of Realtors, though in only 43 percent of households was real estate the primary source of income. Gross median household income among survey participants rose to $94,100, from $91,700 in 2010.
The typical firm has a median 23 agents and brokers, down from 29 in 2011. Median tenure at one’s current firm was six years, unchanged from last year.
The biggest share of Realtors (59 percent) are affiliated with an independent company, while 38 percent are with companies that are affiliated with a franchisor.
The median age of a Realtor was 56, unchanged from the 2011 profile, though up from 51 in 2007. The typical NAR member had 11 years of experience, down from 12 last year.
Only 11 percent of Realtors are under 40; 51 percent are between 40 and 59; and 38 percent are 60 or older. Non-selling broker-owners tend to be the oldest, with a median age of 62. Only 5 percent of Realtors said real estate was their first career. By comparison, homebuyers had a median age of 45 in 2011, according to NAR’s most recent annual profile of buyers and sellers.
The proportion of female Realtors rose three percentage points from the 2011 profile, to 60 percent.
Realtor membership has become slightly less ethnically diverse in the last year. Whites account for 86 percent of members, up from 82 percent. Hispanics make up 6 percent of Realtors; blacks make up 4 percent; and Asians make up 3 percent.
Some 76 percent of Realtors said they were "very certain" they would remain active as a real estate professional during the next two years, up from 73 percent in last year’s survey. Seventeen percent said they were "somewhat certain."
Ninety percent of Realtors had at least had some college education; 89 percent owned their own homes; and 93 percent voted in the last national election.
Nearly half of Realtors, 45 percent, held a certification, while 34 percent held a designation. The most popular certification was Short Sales and Foreclosures (SFR), held by 18 percent of Realtors.
Fifteen percent of Realtors held NAR’s second most popular certification, Real Estate Professional Assistant. The most popular designation was Graduate Realtor Institute (GRI), held by 19 percent of Realtors.