The business activity and income of REALTORS® are up for the second year in a row following nine years of decline, according to the 2013 National Association of REALTORS® Member Profile.
The study’s results are representative of the nation’s REALTORS®; REALTORS® are members of NAR and account for about half of the approximately 2 million active real estate licensees in the U.S. Many non-member licensees are inactive or part time. REALTORS® go beyond state licensing requirements by subscribing to NAR’s Code of Ethics and Standards of Practice and committing to continuing education. NAR members also have access to professional resources to better serve their clients’ needs.
Paul Bishop, NAR vice president of Research, says growth in the housing market has improved the earnings of real estate professionals. “The median gross income of a REALTOR® rose to $43,500 in 2012 from $34,900 in 2011, which is only the second gain in the past 10 years,” he says. “To put that in perspective, the median REALTOR® income had fallen by 35 percent during the housing downturn, but with the help of sustained increases in both home sales and prices, it’s recovered to the highest level since 2006.”
Members licensed as brokers typically earned $54,900 in 2012, while the median for sales agents was $34,000.
Median gross income tends to increase with experience; NAR members in the business for 16 years or more earned $57,300. REALTORS® working 60 hours a week or more earned $85,700, and 21 percent of all members earned a six-figure income.
There are two sides to every real estate transaction – one each for the seller and the buyer. Among REALTOR® members the median number of transaction sides or commercial deals handled in 2012 was 12, up from 10 transaction sides in 2011.
NAR President Gary Thomas says real estate business is cyclical. “REALTORS® have some way to go to surpass the peak income recorded back in 2002. Interestingly, the peak wasn’t during the bubble years because there were way too many people in the business,” he says. “To help smooth out the peaks and valleys associated with residential sales, many REALTORS® are diversified into related services. As a result, changes in REALTOR® income don’t exactly parallel changes in home sales and prices.”
Eight out of 10 NAR members focus on residential sales and 73 percent have secondary real estate specialties. Eighteen percent of residential specialists also offer commercial property management, 17 percent relocation services, 15 percent commercial brokerage, 8 percent counseling and 7 percent land development. Smaller percentages were also in residential appraisal, residential property management, auctions, international or commercial appraisal.
For REALTORS® who have other primary specialties, 37 percent listed residential brokerage as a secondary business.
Repeat business and referrals are important to the success of REALTORS®. Repeat business accounted for a median 21 percent of activity in 2012 and is higher for those with more experience – for members in the business 16 years or more, repeat business was 40 percent of their activity. Referrals accounted for an additional 21 percent of all business.
Several factors limit potential clients in completing transactions. Members said the biggest impediment was difficulty in obtaining a mortgage, cited by 29 percent of respondents, followed by difficulty in finding the right property, 25 percent.
The typical NAR member has 13 years of experience and works 40 hours per week; 57 percent are women, who account for 52 percent of brokers and 63 percent of sales agents. Ninety-four percent of REALTORS® are certain they will remain in the business for at least two more years.
Thirty-nine percent of REALTORS® hold at least one out of six certifications in specialized training. The most popular area of training, driven by an elevated level of distressed homes in recent years, is the Short Sales and Foreclosures Resource Certification (SFR), held by 23 percent.
The second most popular REALTOR® certification is e-Pro, held by 17 percent of members to help them better serve the online needs of clients, followed by REPA (Real Estate Professional Assistant), 7 percent.
In addition, 36 percent of REALTORS® have obtained at least one professional designation. The most popular is GRI (Graduate REALTOR® Institute), held by 21 percent of respondents; ABR® (Accredited Buyer Representative®), 15 percent; and CRS® (Certified Residential Specialist®), 11 percent. Smaller shares hold one of 14 other designations.
Twenty-two percent of REALTORS® belong to one or more of NAR’s affiliated institutes, societies or councils; the most common is CRS (Council of Residential Specialists), identified by 12 percent.
The survey shows the typical NAR member is 57 years old; only 2 percent of all REALTORS® are under 30 years of age and another 4 percent are 30 to 34 years old; 25 percent are 65 or over.
Most members – 56 percent – are licensed as sales agents; 27 percent are brokers, 18 percent broker associates and 4 percent appraisers (some hold more than one license). Fourteen percent of members have one personal assistant, while 4 percent have two or more personal assistants.
Sixty-four percent of NAR members have a personal website, operational for a median of eight years, and 94 percent report their firm has a Web presence. Fifty-six percent of the respondents use social or professional networking sites and 12 percent have a blog. REALTORS® use a variety of communications methods, with 92 percent preferring e-mail for current clients or customers, followed by telephone at 90 percent and text messaging, 74 percent.
Sixty-eight percent of respondents are compensated through a split commission arrangement, 18 percent receive all of the commission and another 4 percent receive a commission plus a share of profits; 10 percent received some other form of compensation. Eighty-three percent of members work as independent contractors for their firms. The vast majority of REALTORS® receive no fringe benefits, although 22 percent are covered by errors and omissions insurance; only 4 percent receive health insurance through their firm.
Most members begin their careers in other fields and bring a wide range of expertise and experience to the profession; only 6 percent report real estate is their first career. Previous full-time careers include management, business or financial, 19 percent; sales or retail, 15 percent; office or administrative support, 9 percent; and education, 7 percent. Thirteen other categories were each 4 percent or less; 16 percent were “other.”
Respondents worked for a firm with a median of 23 brokers and agents, typically with one office, and had been with that firm for seven years. Fifty-six percent of members are affiliated with an independent firm, and 40 percent are with a franchised company; 3 percent are other. Ten percent of REALTORS® report their firm was bought by or merged with another during the past two years, down from 11 percent in the 2012 study.
Nearly nine out of 10 REALTORS® are homeowners. They often invest in real estate and own other homes in addition to their primary residence – 36 percent own at least one residential investment property and 10 percent own at least one commercial property. In addition, 13 percent own at least one vacation home.
NAR members are active in the political process – 94 percent of respondents participated in the last national election and 86 percent voted in the last local election. They are well-educated, with 50 percent holding at least a bachelor’s degree; 15 percent are fluent in other languages. Four percent of all their business comes from clients whose primary language is not English.
The 2013 National Association of Realtors® Member Profile is based on a survey of 58,068 members, which generated 4,883 usable responses, representing an adjusted response rate of 8.4 percent. Survey responses were weighted to be representative of state-level NAR membership. Income and transaction data are for 2012, while other data represent member characteristics in early 2013. The study can be ordered by calling 800-874-6500, or online at www.realtor.org/prodser.nsf/Research. The profile costs $14.95 for NAR members and $149.95 for nonmembers.