One of the recurring puzzlement I experience is the public perception that all real estate agents make the big bucks. The National Association of Realtors 2010 statistics indicate otherwise. See blog posting set out below.
The average for the Metroplex? In 2010, 13,000 agents sold a total of 65,000 properties with an average price per home of $184,000. The math on that is pretty straight forward.
I know an agent who has been in this business almost 50 years. He likes to talk about how one year he made $300,000 and the next year his income fell to the point that his children were qualified for a free-lunch program!
One of the very first questions a buyer or seller needs to ask when interviewing an agent is "are you making a living". If the agent begins to squirm, perhaps you need to move on to the next interview.....
IS THE AVERAGE REAL ESTATE LICENSEE ABLE TO MAKE A LIVING INCOME TODAY??
A review of the NAR statistics on AGENT and BROKER earnings for 2010, it would appear that agents and brokers need other forms of income to maintain a standard of living to which are accustomed.
For agents who entered the real estate business between the years 2004 and 2007, they have had a rude awakening. While our business has always had it's ups and downs in terms of agent income, the loss of about 20% of the NAR membership is not matched by a 20% increase in income for present members.
- The NAR reports that the typical NAR member had 8 transaction sides in 2010-this is up from 7 sides in 2009.
For the average market today with a sales price of $200,000, this number represents an annual income of about $24,000.
- The NAR reports that Brokers and broker associates typically had 10 transactions, while sales agents typically had 7.
That would represent an annual income of about $30,000 for brokers and broker associates. Not sufficient if the broker is also a broker/owner. Of course, this number may represent "net income to the broker". The question is, "what is the overhead"?
- The NAR reports that 51 percent of members had transaction involving a property in foreclosure and 44 percent of members had a transaction involving a short sale.
THAT IS VERY TELLING since most foreclosures and short sales represent a less than average SOLD price and the commissions for these sales is generally lower than for home owner sales.
- The NAR reports that - While the median transaction sides increased, the brokerage sales volume fell to $1.1 million in 2010 from $1.2 million in 2009. Members had more transactions (typically), but the total volume of what those sales were worth was lower in 2010 than in 2009.
If that $1.1 million represents "sales volume", it may also represent "gross income", in which case, the income is not sufficient to maintain a real estate practice in most real estate markets across the U.S.
- The NAR reports that - A transaction side can either be the selling or buying side of a real estate transaction. If the agent worked as both the buyer and seller's agent that would count as two transaction sides.
Which serves to encourage dual agency to the detriment of many home buyers. Although the benefits of dual agency to an individual agent is not generally significant because of the limitations under most state's license laws, to brokers, it usually means twice the income.
- For more information on the 2011 NAR Member Profile, click here.
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