NAR Member Profile Points to 'High Tech,' 'High Touch' Success Model
Washington, DC (May 10, 2007) REALTORS® come from varied backgrounds, work mostly on commission and become successful over a period of time, according to a new member survey by the National Assn. of REALTORS®.
The typical member is 51 years old, works 40 hours per week and has been in the business for seven years. More than 1.3 million REALTORS® about half of all real estate licensees are characterized in the highly detailed "2007 National Assn. of REALTORS® Member Profile."
Median income was $47,700 in 2006, down from $49,300 in 2004, which had also had declined since 2002. Members licensed as brokers earned a median of $73,700 last year, while sales agents earned $34,600. During the last two years, NAR membership increased 23.2 percent.
Paul Bishop, NAR’s manager of real estate research, said member growth is distorting the data. “With rapid member growth in recent years, newcomers those in the business for two years or less now account for nearly a quarter of all REALTORS® and are diluting median income,” he said. “Since most agents work on a commission and become successful over time through training, repeat business and referrals, income in those early years can be quite lean as agents establish themselves. Experienced professionals earn more as their skills sharpen and their contacts expand.”
Income Numbers Skewed by New Members
REALTORS® in the business for two years or less earned a median of $15,300, while those with three to five years of experience earned $44,200. For six to 15 years, the median was $64,600, while members in the business for 16 years or more earned $76,200.
One-quarter of all business is from referrals or repeat business from previous clients, ranging from 7% for newcomers to 41% for respondents with at least 16 years of experience. Seven out of 10 are compensated through a split commission arrangement, 17% receive a full commission, and another 3% receive a commission plus a share of profits.
Only 4% of members report real estate is their first career. The majority come from a variety of other fields, including management, business or financial, 20%; sales or retail, 15%; office or administrative support, 10%; education, 6%; and homemaker, 5%. Twelve other categories were each 4% or less.
Even with the varied backgrounds, NAR President Pat V. Combs, from Grand Rapids, MI., and vice president of Coldwell Banker-AJS-Schmidt, said there are common qualities among the membership.
“REALTORS® are people-oriented with strong interpersonal skills –- they enjoy helping buyers and sellers, and bringing the deal together,” Combs said. “They’re flexible to accommodate client schedules, entrepreneurial in their approach to business, and in today’s world, they also have strong technical skills. In short, successful REALTORS® are not only high-tech but also high-touch.”
Thirteen percent of NAR members have been in the business for one year or less, while another 13% have been in the business for 26 years or more. Only 10% work fewer than 20 hours per week and 30% work 20 to 39 hours per week, while 15% work at least 60 hours per week. Nearly six in 10 are women, and the typical respondent has been with their firm for four years. Five percent are under 30 years of age while another 6% are 30 to 34 years old; 12% are 65 or over.
Men earned a median income of $58,600 in 2006 and were more likely to be brokers, while women earned $42,000 and were more likely to work part-time. Among REALTORS® working as full-time sales agents, men earned a median of $61,300 while women earned $54,400. Full-time male brokers made $94,000 last year, while the median income for women brokers was $80,300.
REALTOR® Specialties, Production Numbers
Three-quarters of REALTORS® specialize in residential brokerage, six in 10 have a website, and one in five has at least one personal assistant. In addition, 74 percent maintain a home office for business purposes.
Among sales members, the median number of transaction sides handled last year was 10, equivalent to five full transactions. In 2004, the median number of transaction sides was 12.
In 2006, the typical residential sales member sold one of their own listings and five of someone else’s, while other agents sold four of that member’s listings. The median sales or leasing volume was $1.9 million, down from $2.2 million in 2004.
Once again, newcomers are diluting median figures. Members in the business two years or less handled a median of $800,000 in business, while those in the business at least six handled $2.6 million.
Professional courses and training are important components of REALTOR® membership. Many hold at least one professional designation, with the most popular being GRI (Graduate, REALTOR® Institute), held by 18% of respondents; ABR® (Accredited Buyer Representative®), 13%; and CRS® (Certified Residential Specialist®), 8%. Smaller percentages hold one of 13 other designations.
In addition, members offering specialized services belong to one or more of NAR’s affiliated institutes, societies or councils. Ten percent belong to the Council of Residential Specialists, 10% are members of the Real Estate Buyer’s Agent Council, 4% the Women’s Council of REALTORS® and 3% the Council of Real Estate Brokerage Managers; smaller percentages belong to five other affiliates.
Most REALTORS® hold a sales agent license, 63%; followed by a broker’s license, 22%; broker associate, 16%; and appraiser license, 3%.
One percent hold some other kind of license.
Buyer agency is popular, with 42% of residential specialists offering both buyer and seller agency, and another 8% providing exclusive buyer agency.
Among brokers, eight out of 10 report their primary business specialty is residential brokerage, followed by commercial brokerage, 5%; property management, 4%; land and development, 3%; relocation, 2%; counseling, 1%; appraisal, 1% and international, less than 1%.
Realty Pros and Technology
Nine out of 10 members report their firm has a website, and 61% have a personal website, which they have maintained for a median of three years. The typical REALTOR® received four inquiries from their personal website, which accounted for 3% of their business. Half of all members communicate with their clients by e-mail more than 50% of the time.
Technology is increasingly important to REALTORS®' success. Ninety-three percent use cell phones daily or nearly every day, 91% use e-mail, 88% computers, 27% PDAs, 23% digital cameras, 23% wireless e-mail, 14% instant messaging, 13% GPS devices, 2% blogs, 1% podcasts and 1% RSS feeds.
The most popular software is multiple listing, with 74 % of REALTORS® using it daily or nearly every day, and another 13% using it a few times per week. Other frequently used software includes contact management, document preparation, comparative market analysis, and electronic contracts and forms. Less frequently used software includes transaction management, graphics or presentation, property management and loan analysis.
Although three-fourths of all NAR members specialize in residential real estate, 27% have a secondary specialty in relocation, 18% In commercial brokerage, 18% land development, 16% counseling, 11% commercial property management, 8% residential property management, 4% residential appraisal, 4% international, 2% auction and 1% commercial appraisal. Residential brokerage was cited as a secondary business for 12% of respondents, who had other primary specialties.
Some NAR members are involved in ancillary services, with the most common being mortgage brokerage, mentioned by 6%, followed by title insurance or processing, relocation, and home warranty, each mentioned by 4%.
Half of all members are affiliated with an independent, non-franchised firm; 34 percent are with an independent franchised company, 11% with a franchised subsidiary of a national or regional corporation, and 6% with a non-franchised subsidiary of a national or regional corporation. Less than 10% report their firm was bought by or merged with another firm since 2005.
Eighty-three percent of REALTORS®work as independent contractors. Seven out of 10 receive no benefits from their firm, although 24 percent are covered by errors and omissions insurance; 93 percent must obtain health insurance elsewhere.
Eighty-seven percent are Caucasian, 6% Hispanic, 4% African American, 3% Asian, 1% Native American and 1% other; respondents could choose more than one category.
REALTORS® are well-educated, with 44% holding at least a bachelor’s degree compared with 26 percent for the U.S. labor force as a whole. They participate in the political process more than other segments of the population, with 95% registered to vote in comparison with 66% for the United States as a whole; 90% voted in the last national election and 81% in the last local election.
Fifteen percent of NAR members are fluent in a language other than English, and 10% were born outside the United States. One out of three members reports they have clients who are foreign nationals.
Four in 10 REALTORS® own other residential properties in addition to their primary residence. While most of these are investment homes, 17% own at least one vacation home. In addition, 11% own at least one commercial property.
Members are optimistic about the future, with 80% saying they are confident they will remain active in the business during the next two years; only 5% were uncertain.
The 2007 "National Assn. of REALTORS® Member Profile" was based on a survey of 140,000 members which generated 10,774 usable responses, representing an adjusted response rate of 7.9%. Income and transaction data are for 2006, while other data are representative of member characteristics in early 2007. Some data is not directly comparable with previous surveys due to changes in questionnaire design. The study can be ordered by calling 800/874-6500, or online at http://www.realtor.org/newresearch. The cost is $50 for NAR members and $125 for non-members.