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Keeping Up With the Times – Realtors Respond to Challenging Market

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RISMEDIA, May 25, 2009-Realtors are adjusting to shifts in the real estate market, reaching out to consumers through social networking and obtaining training to better meet the needs of clients, according to the “2009 National Association of Realtors® Member Profile.”

More than one-third of Realtors use social and professional networking sites. Blogs, RSS feeds and podcasts are used by 17% of respondents on a regular basis, up from 12% in 2008. There are no significant changes in use of these technologies based on the number of years in the business.

NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said a slowdown in home sales gives real estate professionals an opportunity to improve their skills. “Real estate agents and brokers who go beyond state licensing requirements by becoming Realtors subscribe to a strict Code of Ethics and commit to continuing education,” he said. “Within that context, many more go on to seek specialized training to better serve their clients and increase the value they add to the real estate transaction.”

The study’s results are representative of the nation’s 1.2 million Realtors- about 60% of the nearly 2 million active real estate licensees across the country.

Thirty-five percent of Realtors® hold at least one professional designation, up from 32% in 2008, with the most popular being GRI (Graduate, Realtor Institute), held by 20% of respondents; ABR (Accredited Buyer Representative), 13%; CRS (Certified Residential Specialist), 10%; and Seniors Real Estate Specialist (SRES), 5%. Smaller percentages hold one of 14 other designations. Another 16% hold a certification of specialized training.

One quarter of NAR’s membership belongs to one or more of NAR’s affiliated institutes, societies or councils. Eleven 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.

Paul Bishop, NAR managing director of real estate research, said members are diversified in their business activities. “Most Realtors understand real estate is a cyclical business and are diversified in their income streams,” he said. “Almost all of our members have secondary business specialties, and some are involved in related businesses.”

Although 82% of all Realtors specialize in residential real estate, most also have secondary focuses. Twenty-two percent have a secondary specialty in relocation, 21% in commercial brokerage, 17% in residential property management, 14% in counseling and 14% in land development. Smaller percentages were also in commercial property management, residential appraisal, international, auction and commercial appraisal; only 3% had no secondary specialty.

Residential brokerage was cited as a secondary business for 11% of respondents who had other primary specialties.

The survey shows the typical NAR member is 54 years old, works 40 hours per week and specializes in residential brokerage; 60% are women.

The median income was $36,700 in 2008, down from $42,600 in 2007. Members licensed as brokers earned a median of $49,300 last year, while sales agents earned $28,400.

Realtors in the business for two years or less earned a median of $8,600, while those with three to five years of experience earned $27,100. For six to 15 years, the median was $42,400, while members in the business for 16 years or more earned $53,900.

There were similar differences in income depending on the number of hours worked. Members who worked less than 20 hours per week earned a median of $8,200, while those who worked 60 hours or more earned $74,000. The typical NAR member has been in the business for 10 years, up from eight years in 2007.

“There’s a clear relationship between income and time in the business because agents build their business through repeat clients and referrals,” Bishop said. “Our separate consumer survey shows parallel findings – both buyers and sellers learn about the agent they work with through word-of-mouth recommendations. Reputation and market knowledge appear to be bigger factors than the company the agent works for, or the kind of business model they have, and most consumers would use their agent again or refer that agent to others.”

A median of 19% of all NAR members’ business is from referrals from previous clients, ranging from 1% for newcomers to 23% for respondents with at least 16 years of experience.

Thirty-one percent of Realtors report they had clients who are foreign nationals, and 14% are fluent in other languages.

Some members hold multiple licenses with 60% holding a sales license, 41% a broker or broker associate license, 3% appraiser and 1% hold some other kind of license.

Seventy percent of Realtors are compensated through a split commission arrangement, 17% receive all of the commission and another 3% receive a commission plus a share of profits; 82% of members work as independent contractors for their firms. Seventy-two percent receive no fringe benefits; however, 13% are covered by errors and omissions insurance and only 7% receive health insurance.

Fourteen percent of Realtors have one personal assistant, while 2% have two personal assistants. There is a strong relationship between experience and the use of personal assistants. Only 5% of members who have been in the business for two years or less have a personal assistant, while 24% of those with at least 16 years of experience have at least one personal assistant.

The primary activities of personal assistants are processing listings and placing them in the multiple listing service, handling mailings and other communications, managing the paperwork of the closing process and scheduling appointments. Half of personal assistants are licensed agents.

Only 6% of members report real estate is their first career; most bring expertise and experience from other fields. Previous careers include management, business or financial, 19%; sales or retail, 16%; office or administrative support, 10%; and education, 7%. Twelve other categories were each 4% or less.

Only 12% of Realtors work fewer than 20 hours per week, 31% work 20 to 39 hours per week, and 14% work at least 60 hours per week; 76% report real estate is their only occupation.

Respondents have typically been with their firm for five years. Women account for 53% of brokers and 66% of sales agents. Four percent of all Realtors are under 30 years old while another 4% are 30 to 34 years old; 17% are 65 or over.

There are two sides to every real estate transaction – one each for the seller and the buyer. Among sales members, the median number of transaction sides handled in 2008 was seven, equivalent to 3.5 full transactions, down from eight transaction sides in 2007. The median sales or leasing volume was $1.2 million, down from $1.6 million in 2007.

Residential specialists generally offer buyer agency, with 41% offering both buyer and seller agency with disclosed dual agency, and another 12% providing exclusive buyer agency; only 7% offer exclusive seller agency.

Technology is vital to Realtors’ success. At least nine out of 10 use e-mail and computers daily or nearly every day, 78% use cell phones and 42% use smart phones with wireless e-mail and Internet capabilities. Less frequently used but important technologies include digital cameras, instant messaging, GPS devices, and PDAs without phone capability.

The typical member received four inquiries over the past year from a personal website, which accounted for 3% of their business. More than seven out of 10 Realtors have a home office.

Fifty-one percent of members are affiliated with an independent, nonfranchised firm; 33% are with an independent franchised company, 10% with a franchised subsidiary of a national or regional corporation, and 5% with a nonfranchised subsidiary of a national or regional corporation. The median-sized firm has 23 licensees with one office. Twelve percent of Realtors report their firm was bought by or merged with another during the past year.

Many Realtors invest in real estate and own other homes in addition to their primary residence – 40% own at least one investment property and 16% own at least one vacation home. In addition, 13% own at least one commercial property.

Members typically remain optimistic about the future, with 73% saying they are confident they will remain active in the business during the next two years, with only 7% saying they weren’t certain.

For more information, visit www.realtor.org.

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