What’s going on here? You’d think that with home prices at record highs, agents’ incomes would also be stratospheric. Wrong.
Agents’ incomes plunged by double digits in 2017 while home prices skyrocketed. This agent income-sales price dichotomy is just one highlight from the National Association of REALTORS® (NAR) 2018 Members Profile.
Agents’ median gross income in 2017 was $39,800. Agents’ median gross income in 2016 was $42,500 in 2016. This represents a -6% drop in agent’s median gross income in just one year!
Like agents’ incomes, the median number of agent transactions also dropped in 2017. In 2017, the median of agent transactions was 11; in 2016, that number was 12
It makes sense with the above data that brokerage firms closed fewer sales transactions in 2017 than in 2016. Brokerage sales volume fell to $1.8M in 2017 from $1.9M in 2016.
NAR attributes income and transaction drops to the ongoing shortages of homes available for purchase and to the lack of affordability among those homes. Lawrence Yun, NAR’s chief economist, said, “…for the 5th year in a row, the difficulty of finding the right property has surpassed the difficulty of obtaining mortgage financing as the most cited reason limiting potential clients.”
Agents’ expenses fell with their incomes by 24% in 2017 compared to 2016, according to NAR. In 2016, the median expenses amount was $6,000; in 2017, the median agent expenses amount was $4,580. Car expenses were at the top of the list at $1,310 followed by professional development at $720; administration at $640; business promotion at $630; tech production services at $520; and marketing at $480.
Note that agents earning less than $10,000/year have expenses of approximately $1,540/year and agents earning $150,000/year or more have expenses of approximately $31,900/year, according to NAR.
NAR did not break down the costs of software tools such as MLS, CRM, electronic contracts/forms or social media tools in its 2018 Member Profile but you can easily factor in those expenses. Simply total your expenses, subtract them from your gross earnings and get to your net income. Hopefully, your income numbers compare favorably with the numbers put forth by NAR in its 2018 Member Profile.