RISMEDIA, May 16, 2008-REALTORS® are raising their level of professionalism through training and experience to better serve consumers, and are demonstrating their versatility and breadth of expertise in a changing marketplace, according to 2008 National Association of REALTORS® Member Profile.
The survey results are representative of more than 1.2 million Realtors-about 60% of the nearly 2 million active real estate licensees across the country.
The number of members holding at least one professional designation increased by nearly 21,000 over the past year, reaching a total of more than 428,000 – more than one-third of NAR’s entire membership. The median expense for professional development for the typical member was $710 in 2007.
NAR President Richard F. Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said the association membership isn’t limited to residential brokerage. “While three-fourths of NAR members specialize in residential real estate, almost all of them have secondary specialties,” he said. “For example, Realtors are in areas as diverse as relocation, commercial brokerage, property management, land development, appraisal, counseling and other real estate specialties like international and auction.”
Overall membership edged down 1.5% from a record in 2006, and is still historically high. The survey shows the typical member is 52 years old, works 40 hours per week and specializes in residential brokerage; 60% are women.
The median Realtor income was $42,600 in 2007, down from $47,700 in 2006. In recent years, the typical member’s income had been diluted by a large growth in membership, and income trended down since peaking in 2002. Members licensed as brokers earned a median of $65,200 in 2007, while sales agents earned $31,000.
Paul Bishop, NAR’s managing director of real estate research, said the typical member is increasing his or her professionalism over time through a variety of tools provided by NAR that help them better serve consumers. “Our members build their business through repeat customers and referrals, and the longer they’re in the business the higher their income, education and experience, meaning they are better prepared to serve consumers and handle market changes,” he said.
Realtors in the business for two years or less earned a median of $10,500, while those with three to five years of experience earned $34,600. For six to 15 years, the median was $52,000, while members in the business for 16 years or more earned $69,500. The typical NAR member has been in the business for eight years, up from seven years in 2006.
Thirty percent of all Realtor business is from referrals or repeat business from previous clients, ranging from 2% for newcomers to 47% for respondents with at least 16 years of experience. One-third of NAR members report they had clients who are foreign nationals, and 15% are fluent in other languages.
The modest decline in membership last year comes almost exclusively from newcomers who weren’t able to sufficiently develop their business, according to NAR. Those in the business for two years or less dropped to 18% of overall membership from 23% in 2006. “It’s challenging to start in a business where you’re paid primarily when a transaction is completed, but this can be a good time to learn the ropes for newcomers with patience who also have strong people, technical and entrepreneurial skills,” Gaylord said.
Seven out of 10 members are compensated through a split commission arrangement, 18% receive all of the commission and another 3% receive a commission plus a share of profits; 83% of Realtors work as independent contractors for their firms. Seven out of 10 receive no fringe benefits from their firm, although 23% are covered by errors and omissions insurance; 93% must obtain health insurance on their own.
Although 76% of all NAR members specialize in residential real estate, 27% have a secondary specialty in relocation, 19% in commercial brokerage, 16% commercial property management, 16% land development, 15% counseling, 4% residential property management, 4% residential appraisal, 3% international, 2% auction and 1% commercial appraisal; only 4% had no secondary specialty. Residential brokerage was cited as a secondary business for 11% of respondents who had other primary specialties.
In addition, some members are involved in related business activities, such as mortgage brokerage, 5%; and title insurance, real estate instruction or home warranty, 3% each.
Professional courses and training are important components of Realtor membership. Many Realtors hold at least one professional designation, with the most popular being GRI (Graduate, Realtor Institute), held by 19% of respondents; ABR® (Accredited Buyer Representative®), 14%; and CRS® (Certified Residential Specialist®), 10%. Smaller percentages hold one of 14 other designations.
In addition, members offering specialized services belong to one or more of NAR’s affiliated institutes, societies or councils. Twelve percent belong to the Council of Residential Specialists, 11% are members of the Real Estate Buyer’s Agent Council, 5% the Women’s Council of REALTORS® and 3% the Council of Real Estate Brokerage Managers; smaller percentages belong to five other affiliates.
Some NAR members are involved in ancillary services, with the most common being mortgage brokerage, mentioned by 5%; followed by relocation, 4%; and title insurance or processing, real estate instruction, and home warranty, each mentioned by 3%. Five other services were mentioned by smaller percentages.
Only 5% of members report real estate is their first career, and most bring expertise and experience from other fields. Prior careers include management, business or financial, 18%; sales or retail, 16%; office or administrative support, 10%; education, 6%; and homemaker, 5%. Eleven other categories were each 4% or less.
Only 10% of Realtors 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; 77% report real estate is their only occupation.
Most Realtors hold a sales agent license, 61%; followed by a broker’s license, 24%; broker associate, 16%; and appraiser license, 3%. One percent hold some other kind of license.
Respondents have typically been with their firm for four years. Women account for 52% of brokers, and 71% of full-time sales agents. Five percent of all Realtors are under 30 years of age while another 6% are 30 to 34 years old; 14% are 65 or over.
Among sales members, the median number of transaction sides handled last year was eight, equivalent to four full transactions. In 2006, the median number of transaction sides was 10.
In 2007, the typical residential sales member sold one of his or her own listings and five of someone else’s, while other agents sold three of that member’s listings. The median sales or leasing volume was $1.6 million, down from $1.9 million in 2006.
Buyer agency remains popular, with 43% of residential specialists offering both buyer and seller agency with disclosed dual agency, and another 9% providing exclusive buyer agency.
Six out of 10 members have a personal website, which they have maintained for a median of four years, while 89% report their firm has a website; 73% have a home office. The typical member received four inquires over the past year from a personal website, which accounted for 4% of their business. Technology is increasingly important to Realtors’ success. Ninety-two percent use e-mail daily or nearly every day, 88% use computers and 82% cell phones. Other technology used daily or almost every day include smartphones with wireless e-mail and Internet capabilities, 34%; digital cameras, 27%; GPS devices, 19%; instant messaging, 18%; and PDA without phone capability; 15%.
Half of all members are affiliated with an independent, non-franchied firm; 33% are with an independent franchised company, 9% with a franchised subsidiary of a national or regional corporation, and 5% with a non-franchised subsidiary of a national or regional corporation. The median size of the firm was 25 licensees, which had two offices. Ten percent report their firm was bought by or merged with another during the past year.
There is a strong relationship between experience and the use of personal assistants. Only 6% of members who have been in the business for two years or less have a personal assistant, while 27% of those with at least 16 years of experience have at least one personal assistant. Overall, 14% of Realtors have one personal assistant and 4% have two or more.
Eighty-seven percent are Caucasian, 5% 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. They are active in the political process – 95% are registered to vote; 91% voted in the last national election and 81% voted in the last local election.
Many Realtors own other residential properties in addition to their primary residence – 41% own at least one investment home and 17% own at least one vacation home. In addition, 13% own at least one commercial property.
Members remain optimistic about the future, with 77% saying they are confident they will remain active in the business during the next two years, while only 6% were not certain.
The 2008 National Association of REALTORS® Member Profile was based on a survey of 161,400 members which generated 9,997 usable responses, representing an adjusted response rate of 7.7%. Income and transaction data are for 2007, while other data are representative of member characteristics in early 2008.
For more information, call 800-874-6500, or visit www.Realtor.org/newresearch. The cost is $50 for NAR members and $125 for non-members.
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