Realtors work harder for less money – averaging 260 hours per transaction

Trends in NAR membership – average transaction numbers

This year’s NAR Member Profile reveals considerable trends in the real estate industry and in 2010, the average agent (residential and commercial) had eight transactions. NAR states that this stat has edged up in the last year while commercial has jumped up two transactions since 2009.

Despite the number of transactions being less than one per month (a paltry number given the potential of the industry), the good news is that the number is on the rise. Income is down, however, so this reminds us that agents are living the reality of more work for less money.

A 40 hour work week?

As it has been in years past, most agents cite a work week of 40 hours, despite public perception of the agent who leaves the office at lunch, has a margarita and goes home.

We suspect that most Realtors reading AGBeat average closer to 60 hours per week as reading this site and social networking counts as work whereas the numerous agents who are less involved in the web are able to turn the phone off at 5:00pm.

Agents average eight transactions per year and work 40 hours per week which averages 260 hours per transaction. Many of those hours are lead generation, but for simple math, work hours that have a yield average 260 per side.

Commission splits and franchises

Realtors continue to be paid primarily on a split commission with only about 30% of agents not on a split. 41% of Realtors are affiliated with an independent non-franchised company, a number we suspect could rise in coming years which would lead to these independents becoming franchised (or some version of a franchise).

The big box brokerages have some competition coming, but probably not in the form of everyone jumping ship to go to the indie brokerages, rather whatever the next big box exciting growing brokerage is that is an indie in 2011, simply poised to grow as currently, the typical Realtor works at a firm that employs 29 agents and brokers.

Firm loyalty

The average Realtor has been a NAR member for 12 years and the median time at their current firm is five years, indicating the rare nature of an agent being with the original brokerage they start with upon becoming a licensed Realtor. This is an interesting prospect for recruiters as to whether they hire experienced agents that will stay or inexperienced agents who will burn and turn their network before any other brokerage can.

Over 75% of brokers have a portion of ownership in their firm and over half have sole ownership. The 41% of agents that are with independent brokerages look to be not only agents seeking a market alternative but also hundreds of brokers with ownership.

The takeaway

The member profile doesn’t appear to have experienced any major shifts in brokerage model or preference but agents are doing more business but income is shifting, so Realtors are working harder for less money, a reality that has become commonly accepted in the industry.