Survey: High-income real estate agents lead the pack on tech

Top-earning real estate agents -- those who take in $100,000 or more per year -- tend to work more hours, close more transactions, favor Apple devices, spend more on marketing and technology, have higher commission splits, and update their websites and social media accounts more often than agents earning between $30,000 and $50,000, according to a survey conducted by InmanNext, an agent-focused website operated by Inman News.

The Inman survey, "Diving into the Mind of Today's 'Free Agent,' " included more than 80 questions covering compensation, transaction activity, spending on technology and marketing, views on the effectiveness of various marketing techniques, brokerage practices, and time spent on a range of business activities.

Methodology

The survey gathered 1,368 responses, with 294 respondents reporting that they earned $30,000 or less per year, 167 respondents reporting that they earned between $30,000 and $50,000, 292 respondents reporting that they earned $50,000 to $100,000, 252 respondents reporting that they earned $100,000 to $200,000, and 108 respondents reporting that they earned $200,000 or more. The survey was conducted online from Dec. 18, 2011, to Jan. 2, 2012.

The median gross income of a Realtor in 2010 was $34,100, according to the National Association of Realtors 2011 Member Profile. Nearly four in 10 NAR members reported gross incomes below $25,000, while 17 percent reported incomes of $100,000 or more, NAR found.

In the Inman survey, the number of transactions handled and hours worked among agents making between $30,000 and $50,000 (referred to here as "middle-income") and agents making $100,000 or more (referred to here as "high-income") varied dramatically.

Transaction sides

While nearly half of respondents in the $30,000-$50,000 income range said they'd closed 10 or fewer transactions last year and nearly three-quarters closed 15 or fewer, 66 percent of respondents who made $100,000 or more closed 20 or more transactions and nearly a fifth closed more than 50 transactions. Among those making $200,000 or more, nearly 40 percent closed more than 50 deals.

House price, type

Half of middle-income agents had an average transaction size under $250,000, compared with nearly a third of high-income agents. About a third of high-income agents had an average transaction size of $450,000 or above compared with about 14 percent of middle-income agents. Save one respondent, no middle-income agents reported closing a deal above $750,000.

High-income agents were more likely to specialize in luxury homes and condos and townhouses than middle-income agents, and were less likely to specialize in first-time homebuyers or real estate owned homes (REOs). 

Commission splits

Among middle-income agents, 31 percent said their commission split was 70/30 (70 percent to the agent, 30 percent to the broker), followed by 15.5 percent that said their split was 80/20; only 12.4 percent reported a 100 percent split.

Among those earning $100,000 or more, 26.5 percent reported a 100 percent commission split, with more than a third of those making $200,000 or more reporting a 100 percent split. High-income agents were more likely to pay a monthly fee to their brokerage for their desk or technology or marketing tools.

Hours worked

Although at least 97 percent of respondents in both the middle- and high-income ranges reported working full time, 40.7 of middle-income agents reported that they worked 20 to 40 hours a week, followed by 34 percent who worked 40 to 50 hours a week.

Among those making $100,000 or more, 42.1 percent worked 40 to 50 hours a week, and an almost equal percentage (41.8 percent), reported working more than 50 hours a week. Among those making $200,000 or more, more than half worked more than 50 hours a week.

Marketing time, expenses

High-income respondents spent more time with clients and marketing. Among middle-income respondents, more than half reported spending fewer than 10 hours per week working with clients, while 60.7 percent of high-income agents reported spending 10 hours or more each week working with clients.

About half of respondents in both income groups said they spent 20 percent or less of their time on marketing, but nearly 31 percent of middle-income respondents reported spending 10 percent or less of their time on marketing compared with about a quarter of high-income respondents.

High-income earners reported spending more on marketing and technology. Among middle-income earners, 62.4 percent spend less than $2,500 out of pocket on marketing.

Meanwhile, about 63 percent of high-income agents said they spent $5,000 or more per year out of pocket on marketing. Among the highest-income agents (those making $200,000 or more per year), 42.4 percent spend more than $20,000 per year on marketing.

Brokerage loyalty vs. breakaway

While the vast majority of respondents in both income ranges said they were not thinking of leaving their brokerage within a year, most high-income earners said they had considered the idea of opening their own brokerage.

While half of middle-income earners cited a bigger split as the reason they would switch to another brokerage, that particular consideration was less of a concern for high-income agents, who cited technology and support as the main reason they would leave, followed by culture, and then lack of confidence about their broker's strategy for the future.

Those in the high-income range were somewhat less likely to belong to NAR, at 88 percent, compared with nearly 95 percent in the middle-income range. 

While 85.7 percent of middle-income earners did not have an assistant, more than half of earners making more than $100,000 did. 

Technology spending, use

Among respondents with annual incomes of $100,000 and up, just over half said they spend $2,500 or more out of pocket on technology each year; about a quarter spend $5,000 or more. Among middle-income earners, 83.6 percent spend less than $2,500 out of pocket on technology.

Nearly a quarter of high-income agents used Apple Macintosh computers, compared with 18 percent of middle-income agents.

Nearly all agents in both income ranges reported that they have a smartphone, though the high-income earners had more of a predilection for Apple iPhones.

While those making between $30,000 and $50,000 were more or less evenly split between iPhones and Google Androids, more than half of those making more than $100,000 owned an iPhone. High-income earners were also more likely to have a BlackBerry (16 percent, compared with 10 percent among middle-income earners). Just above a quarter owned Android devices.

When it came to tablets, both income ranges overwhelmingly preferred Apple iPads, though a higher share of high-income earners had them. While just over half of middle-income agents owned a tablet, more than three-quarters of high-income agents did.

About the same share of agents in both income ranges reported using paperless technology for a transaction, though high-income agents were more likely to manage their business from the the cloud using online services such as Evernote, Dropbox, DocuSign and DotLoop.

More than 80 percent of high-income agents worked from the cloud, compared with nearly 70 percent of middle-income agents.

About 39 percent of respondents in the the $30,000 to $50,000 income range reported updating their website or blog once a month. Less than a third updated their site more than a few times a month compared to nearly half of respondents in the $100,000-or-more income range who updated their site at least a few times a week. 

Social media

High-income agents tend to cultivate their social media channels more than middle-income agents. While 96 percent of respondents in both income ranges said they belonged to Facebook, just over two-thirds of middle-income respondents reported having between 500 or fewer friends on Facebook, compared with nearly half of high-income agents reporting 500 or more friends on Facebook.

Among those making $200,000 or more, more than a third reported having more than 1,000 friends on Facebook.

High-income agents were also somewhat more likely to have a Facebook page (78 percent did compared to 65 percent of middle-income agents) and somewhat more likely to have more page "likes." About 12 percent of middle-income agents said 300 people or more "liked" their page, compared with nearly a third of high-income agents.

High-income agents were more likely to have a YouTube account (82 percent compared with 67 percent among middle-income agents). They were also more likely to have a Twitter account (84 percent compared with 74 percent of middle-income agents) and more likely to have more followers.

More than half of middle-income agents had fewer than 100 followers, while nearly 70 percent of high-income agents had more than 100 followers.

Use of Google Plus was about the same among both income groups: While just over 60 percent of respondents in each group had a Google Plus personal account, 80 percent reported not having a Google Plus business page.

About a quarter of respondents in both income groups reported updating their social media sites a few times a week, followed by another quarter in both groups who reported updating them every day. Among agents making $200,000 or more, however, nearly a third reported updating the social media sites every day.

Roughly 60 percent of agents in both income groups said they preferred to communicate by email, with the second-largest share preferring the phone. But while just over a fifth of middle-income agents preferred the phone, about 17 percent of high-income agents did. Nearly a quarter of high-income agents preferred to communicate via text or social media, compared with about 16 percent of middle-income agents.

Return on investment

Both income groups reported their database -- including emails, newsletters, drip campaigns, and website registration follow-ups -- as the part of their marketing program that delivered the most bang for the buck. Nearly 41 percent of respondents in both groups ranked their database as "most effective." At least 80 percent of respondents in both groups ranked websites or blogs and social media as at least "somewhat effective."

Just over half of middle-income earners said they use single-property websites for marketing, while just over half of high-income earners said they did not. 

Most respondents in both income groups considered past clients and referrals as most important -- or a 10 on a 1 to 10 scale -- for lead generation revenue.

Opinions about search engines and real estate portals varied some. Among those making between $30,000 and $50,000 and those making between $100,000 and $200,000 per year, the most popular ranking for search was "least important" (rated "1" on a 1 to 10 scale), though among agents making $200,000 or more just over half rated search as a "7" or more.

Among middle-income agents, the most popular ranking for real estate portals was a "1,"  with more than half rating them a "5" or less, but views were mixed among the high-income agents.

While 41.2 percent of those making between $100,000 and $200,000 ranked real estate portals a "7" or more, equal percentages of those making $200,000 or more ranked real estate portals as a "2" or "6." Less than a quarter ranked portals a "7" or more.

Agent demographics

Agents making between $30,000 and $50,000 were demographically similar to their counterparts making $100,000 or more:

• High-income agents were somewhat more likely to be male: 52.9 percent vs. 39.3 percent at the middle-income level;
• About half of respondents in each group (high-income and middle-income) were between 40-55, with the largest share in the middle-income range slightly younger (45-50) than the largest share in the high-income range (50-55);
• In both income ranges the largest share of respondents had been working as real estate agents for five to 10 years, though among those making $200,000 or more, the biggest share -- one third -- had been in the business for more than 20 years;
• About 58 percent of respondents in both the middle- and high-income ranges had received a bachelor's degree or a higher academic degree;
• About 37 percent in each group said they'd received no certifications.

 

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