Earlier this year the National Association of REALTORS® released data profiling both real estate firms and real estate agents around the country. Because so many persons' awareness of the real estate business environment is shaped by advertising -- advertising that is dominated by large firms and high-producing agents -- the results as to what is ‘typical' may come as a surprise.
Seventy-eight percent of real estate firms have a single office, typically with three full-time real estate agents -- which is up from two agents (a 50% increase!) in 2015. Eighty-three percent of firms are independent, non-franchised; and eighty-five percent specialize in residential brokerage. The typical residential firm has been operating for 13 years.
As to their business, the one-office firm with three agents had a median sales volume of $4.5 million -- about $1.5 million per agent. This contrasts with the large firms (four or more offices) that had a median sales volume of $203.8 million. The larger firms had a median sales staff of 120 full-time agents. So their average sales volume was just under $1.7 million per agent.
The one-office firms averaged 21 transaction "sides" and the large offices averaged 900. That is $214,285 per office and $226,444 per office, respectively.
Over all firms, typically 30% of sales volume came from past client referrals and 30% came from repeat business from past clients. 10% came from websites, 5% from social media, and 2% through open houses. The typical firm makes less than 1% of net revenue from ancillary services such as mortgage, title, or escrow; but the larger firms average 5% of net revenue from these sources.
What about the agents who work in these firms?
Due to an increase in new members, the number of agents with less than two years experience has risen from 17 percent to 28 percent. That's a lot of ‘newbies'. If the pick is random, a consumer has slightly more than a one in four chance of engaging a Realtor® with less than two years experience. Overall, the median years of members' experience has dropped from twelve years to ten years.
There has been an increase in retirement by REALTORS® over the age of 65. Whereas 25% of the membership was in that age group in 2015, that number has dropped to 16%. Still, the median age of new members is 43. The business is not drawing a lot of millennials. Overall, the median member age is 53, down from 57 one year ago.
Median gross income for REALTORS® was $39,200, down from $45,800 the previous year. The drop is explained by an increase in membership, whereas the number of transactions remained about the same. The prevailing commission split was 70%.
REALTORS® with more than 16 years experience had a median gross income of $73,400. Median business expenses were $6,300.
Sixty-two percent of REALTORS® are female. Seventy-four percent report that real estate is their only occupation. That is true of eighty-six percent of REALTORS® who have been in the business at least 16 years.
The typical Realtor® is 53 years old, white, female, has attended college, and is a homeowner. Eighty-one percent of REALTORS® are homeowners.
Only four percent of REALTORS® reported that real estate was their first career.