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OFFICIAL MAGAZINE OF THE NATIONAL ASSOCIATION OF REALTORS®



This article was published on: 07/01/2005

2005 NAR Member Profile
Earnings On the Upswing

Practitioners see incomes rise with sales boom, although new licensees lag.

BY ROBERT FREEDMAN

Your income went up in 2004 along with the boom in home sales, data from the soon-to-be-released 2005 NAR Member Profile shows. Median gross personal income last year for all REALTORSŪ was up an average 7.2 percent from the last year that the data was tracked, in 2002. Existing-home sales rose 20.5 percent during the same period.

Within the average income increase are big disparities, however.

Brokerage managers saw the biggest gains—those who manage and don’t sell saw their incomes reach a median $86,000, a 26 percent increase over $68,300 in 2002, and those who manage and sell saw their incomes rise to $82,200, a 19 percent increase over $68,900 in 2002. Broker-owners who sell also saw a solid 13 percent increase to $89,100 from $78,700 in 2002. Broker-associates saw a 1 percent gain to $67,900 from $67,000 in 2002.

But the median income of sales associates actually declined about 8 percent to $38,300 from $41,600 in 2002, largely because of the influx of new licensees who typically take years to get up to speed in their earning potential, say NAR research analysts. Between 2003 and 2005, NAR membership grew about 26 percent, from 876,195 to 1,102,250 members.

For sales associates who’ve been in the business a while—between six and 10 years—income in 2004 was a median $57,100 and for associates with more than 26 years in the business, the median was $83,400.

The lion’s share of real estate professionals continue to split commissions with their brokerage—a median 69 percent of all practitioners, down slightly from 73 percent in 2002. The median for practitioners who have a year-end commission split agreement was 71 percent, which is 8 percentage points higher than the 63 percent in 2002.

The percentage of practitioners working under a 100 percent commission plan dropped a bit, too, to about 17 percent from 20 percent in 2002, while alternative types of arrangements saw a small increase. For example, practitioners earning a salary plus share of the profits doubled from 2 percent to 4 percent.

The number of practitioners using personal assistants hasn’t changed much with 19 percent of sales associates saying they use one or more—slightly lower than the 21 percent who said they use one or more assistants in 2002. Most of these assistants are compensated by a set salary or hourly.

Practitioners continue to see a significant share of their consumer contacts generated through their Web presence, although the number of leads they’re getting from the Internet hasn’t improved much over the last two years. Some 36 percent of sales associates say they’re getting up to 10 inquiries a year from their personal Web site, and 15 percent say they’re getting up to 20 inquiries a year. Both of those numbers are up a few percentage points from 2002. But the number of practitioners seeing a big volume of inquiries is dropping. Associates who say they get 51 inquiries or more a year is 6 percent, down from 16 percent in 2002.

The 2005 NAR Member Profile is scheduled for release by the end of July. You will be able to read highlights and purchase the report on REALTOR.org's Research page.


Untitled Document
Gross personal income
 
2002
2004
Broker-associate
$67,000
$67,900
Broker owner
(no selling)
$86,100
$79,900
Broker owner
(selling)
$78,700
$89,100
Manager
(no selling)
$68,300
$86,000
Manager
(selling)
$68,900
$82,200
Sales associate
$41,600
$38,300

Gross personal income
by years in real estate
 

2002

2004
1-5 years
$35,400
$24,500
6-10
$49,500
$58,700
11-15
$58,700
$72,400
16-25
$64,900
$82,400
26+
$67,500
$92,600

Sales volume
 
2002
2004
Broker/broker associate
$2.2
million
$2.2
million
Sales associate
$1.4
million
$1.6
million

Compensation structure
 
2002
2004
Commission split
73%
69%
100 percent
commission
20
17
Salary
1
2
Profit share
1
1
Commission
+ profit share
2
3
Salary +
profit share
2
4
Year-end
commission split
63
71

Personal assistants
 
2002
2004
One or more
21%
19%
None
79
81

Personal Web site
 
2002
2004
Inquiries (number per year)
Broker/broker
associate
15
10
Sales associates
11
8
Business generated
(% of business per year)
Broker/broker
associates
5%
5%
Sales associates
4
4

Web sites where REALTORSŪ place their listings
 
2002
2004
Broker/broker-associate

Firm’s site

82%
70%
REALTOR.com
84
68
Local REALTOR®
association site
70
35
Personal site
52
36
Newspaper site
37
21
Franchisor’s site
49
21
Real Estate
magazine site
37
19
Other broker’s
IDX site
35
16
Other broker’s
VOW
11
3
Sales associate
Firm’s site
85%
81%
REALTOR.com
83
70
Local REALTOR®
association site
68
41
Personal site
48
43
Newspaper site
36
22
Franchisor’s site
53
20
Real Estate
magazine site
36
22
Other broker’s
IDX site
28
15
Other broker’s
VOW
6
2

 

Percentage distribution in medians for all REALTORSŪ, unless otherwise noted.



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