National Association of REALTORS 2014 MEMBER PROFILE. The Voice for Real Estate

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1 National Association of REALTORS 2014 MEMBER PROFILE The Voice for Real Estate

2 2014 OFFICERS President Steve Brown, ABR, CIPS, CRS, GREEN President-Elect Chris Polychron, CRS, GRI First Vice President Tom Salomone Treasurer Michael McGrew, CRB, CRS Immediate Past President Gary Thomas Vice President Beth L. Peerce Vice President JoAnne Poole, GRI, CRS Chief Executive Officer Dale Stinton, CAE, CPA, CMA, RCE NAR RESEARCH STAFF Office of the Chief Economist Lawrence Yun, Ph.D. Chief Economist and Senior Vice President Caroline Van Hollen Senior Research and Strategic Planning Coordinator Survey and Market Research Paul C. Bishop, Ph.D. Vice President Stephanie Davis Administrative Coordinator Nadia Evangelou Research Economist Ken Fears Director, Regional Economics and Housing Finance Danielle Hale Director of Housing Statistics Jessica Lautz Director, Member and Consumer Survey Research Quantitative Research Jed Smith, Ph.D. Managing Director, Quantitative Research Scholastica Cororaton Research Economist Michael Hyman Research Assistant George Ratiu Director, Quantitative and Commercial Research Hua Zhong Data Analyst Business Operations and Communications Thomas Doyle Director of Research Marketing and Communications Meredith Dunn Research Communications Representative

3 National Association of REALTORS 2014 MEMBER PROFILE 2014 National Association of REALTORS

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5 National Association of REALTORS Contents Introduction... 5 Highlights... 6 Chapter 1: Business Characteristics of REALTORS... 8 Chapter 2: Business Activity of REALTORS...21 Chapter 3: Income and Expenses of REALTORS...39 Chapter 4: Office and Firm Affiliation of REALTORS...53 Chapter 5: Demographic Characteristics of REALTORS...59 Methodology...72 List of Exhibits

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7 National Association of REALTORS Introduction In 2013, the housing market saw an early, strong spring, followed by a slower summer and fall. Similar to 2012, low inventory plagued many areas of the country, slowing home sales and raising home sale prices. Survey data from the Investment and Vacation Home Buyers Survey show that investment buyers dipped some, but vacation home buyers rose. Data from the Profile of Home Buyers and Sellers survey showed that both primary residence home buyers and home sellers wanted to and did work with a professional real estate agent or broker at higher rates than seen in past years. Clients continue to want the expert professional advice that members of the National Association of REALTORS have provided in the past and continue to provide, as this year s report further illustrates. The typical member is an independent contractor affiliated with an independent company catering to local markets. REALTORS frequently have had careers in other fields prior to real estate, the most common being in management, business, and financial professions, followed by sales and retail. Only six percent indicated that real estate is their first career. The majority of members are women with a college education. Looking ahead, 82 percent of REALTORS are very certain they will remain in the market for two more years. This share is higher than the last two years, indicating the optimism that is seen in today s market. Newer members in the business are less certain they will remain in real estate, while more seasoned members are more certain. For the third year in a row, the median gross income of REALTORS rose from the previous year. The typical income among members was $47,700 in 2013, rising from $43,500 in 2012 and $34,900 in The rise in member income is reflective in the increase in business activity, as well. As most members work on a commission based salary structure the rise in income is reflective of higher home sales prices and higher gross brokerage sales volume. The brokerage sales volume also rose to $1.8 million in 2013 from $1.5 million in 2012, while the number of transaction sides completed remained unchanged at 12 from the prior year. For the first time, the difficulty finding the right property has surpassed the difficulty in obtaining mortgage financing as the most cited reason for potential clients being limited. In 2013, there was an increase of new members of the National Association of REALTORS. This is apparent in the data, with the typical years of experience in real estate decreasing to 12 years from 13 years; the typical tenure at a firm decreasing to six years from seven years; and the typical age of members decreasing to 56 years from 57 years. In the most recent survey the number of members with one year or less of experience rose to nine percent from five percent the year before. Jessica Lautz Danielle Hale May 2014 Nadia Evangelou Thomas Doyle 5

8 2014 MEMBER PROFILE Highlights Business Characteristics of REALTORS Fifty-seven percent of REALTORS were licensed as sales agents, and 78 percent of members specialize in residential brokerage. The typical REALTOR has 12 years of experience. Sixteen percent of members have at least one personal assistant. Sixty-nine percent of REALTORS reported having a website for at least five years, 12 percent reported having a real estate blog, and 61 percent of members are using social media. The most commonly found information on websites, among commercial and residential REALTORS, is the member s own listings. Eighty-two percent of REALTORS are certain they will remain in the business for two more years. Business Activity of REALTORS In 2013, the typical agent had 12 transactions the same as in 2012, but higher than the 10 transactions typically had in Twenty-two percent of residential brokerage specialists had at least one commercial transaction side in the last year. Forty-six percent of residential brokerage specialists had a transaction involving a foreclosure and 42 percent had a transaction involving a short sale. Both types of transactions decreased from The typical agent had a sales volume of $1.8 million in 2013, up from $1.5 million in For the first time, the difficulty finding the right property has surpassed the difficulty in obtaining mortgage financing as the most cited reason for potential clients being limited. The typical property management specialist managed 30 properties in Most REALTORS worked 40 hours per week in 2013, a trend that has continued for several years. The typical REALTOR earned 21 percent of their business from repeat clients and customers and 21 percent through referrals from past clients and customers. REALTORS spent a median of $200 to maintain a website in Members typically brought in four inquiries and three percent of their business from their website. 6

9 National Association of REALTORS Highlights Income and Expenses of REALTORS Percentage split-commission is the prevailing method for REALTOR compensation, with 68 percent of respondents indicating this method of compensation, similar to past years. The median gross income of REALTORS was $47,700 in 2013, up from $43,500 in REALTORS with 16 years or more experience had a median gross income of $70,200 compared to REALTORS with two years or less experience that had a median gross income of $8,500. The median business expenses rose to $6,560 in 2013 from $4,900 in The largest single expense category for most REALTORS was vehicle expenses, which increased to $1,860 in 2013 from $1,790 in Office and Firm Affiliation of REALTORS Fifty-seven percent of REALTORS are affiliated with an independent company. Eight in ten members are independent contractors with their firms. The median tenure for REALTORS with their current firm decreased to six years from seven years. Nine percent of REALTORS worked for a firm that was bought or merged in the past two years. Demographic Characteristics of REALTORS The typical REALTOR is a 56-year-old white female who attended college and is a homeowner. Fifty-seven percent of all REALTORS are female. Nineteen percent of members had a previous career in management, business or the financial sector and 15 percent had a previous career in sales or retail. Only six percent of members reported real estate was their first career. Seventy-eight percent of REALTORS said that real estate was their only occupation, and that number jumps to 86 percent among members with 16 or more years of experience. The median gross income of REALTOR households was $105,500 in 2013, which is an increase from $99,400 in This is a three year increase in household income among members. A substantial majority of REALTORS 86 percent own their primary residence. 7

10 CHAPTER 1: Business Characteristics of REALTORS The majority of REALTORS are sales agents who generally specialize in residential brokerage. The years of experience decreased slightly in the 2014 survey, from 13 years in 2013 to 12 in this year s report. While there is a smaller share of members with more than 11 years of experience, there are more members with one year to four years of experience indicating more new members are entering the field. REALTORS web presence and use of social media has been increasing in recent years as a valuable marketing tool to reach clients. The 2014 survey shows 61 percent of REALTORS reported using social networking websites and an additional 8 percent reported that they do not yet use such sites but plan to do so in the future. REALTORS are also progressively more comfortable with technology and are using the latest technologies on a daily basis. 8 National Association of REALTORS MEMBER Member Profile PROFILE

11 National Association of REALTORS REALTORS Function and Specialty Area Exhibits 1-1 through 1-5 Fifty-seven percent of members hold sales agent licenses, 26 percent hold broker licenses, and 17 percent hold broker associate licenses. Seventy-eight percent of members, which is approximately equal to eight in ten members, specialize in residential brokerage. Brokers and broker associates tend to be involved in more business specialties, such as commercial brokerage and property management. Sales agents are more likely to primarily specialize in residential brokerage. The most common secondary specialty areas for members are relocation, commercial brokerage, counseling, and land development. More than one-quarter of members do not practice a secondary specialty area. Experience and Income Exhibits 1-6 through 1-8 The typical member has 12 years of experience in real estate, down from 13 years in the 2013 survey. Broker-owners who do not sell and appraisers had the most experience at 25 years, while sales agents were typically the newest to the field with 10 years of experience. In 2013, 47 percent of REALTORS earned between 50 and 100 percent of their income from their primary real estate specialty, higher than what was earned in Those who worked more hours and those with more experience were also more likely to depend entirely on their real estate specialty. Among the members with fewer years of experience and who worked fewer hours, an increasingly larger share gained their income from other sources. Personal Assistants Exhibits 1-9 through 1-12 While only 16 percent of REALTORS have personal assistants, the use of personal assistants is more common among broker-owners and managers. More tenured members are more likely to use personal assistants as well. Personal assistants help with a variety of tasks. The most frequently reported tasks included processing new listings and entering them into the MLS, sending mailings to past clients or prospects, and managing closing paperwork. Personal assistants are likely to be licensed (54 percent) versus 46 percent who are unlicensed. Just 41 percent of assistants are paid personally by the REALTOR, while 39 percent are paid by the company, and 20 percent are paid by both. Three-fifths of personal assistants are exclusive to the agent, while two-fifths are shared with others. Fortynine percent of assistants are part-time. The most popular compensation structure for assistants is salaried pay. Communications and Technology Exhibits 1-13 through 1-15 Technology is increasingly important for REALTOR business. With nearly all members reporting daily use of and desktop or laptop computers, nearly nine in ten also reported daily use of smartphones with wireless and Internet capability. Seventy percent of REALTORS use multiple listings software daily. Other software used regularly includes contact management, document preparation, and electronic contact and forms. 9

12 2014 MEMBER PROFILE Chapter 1: Business Characteristics of REALTORS Websites, Blogs, and Social Networking Exhibits 1-17 through 1-22 Sixty-seven percent of members reported having their own website half of which are provided by the member firm. Appraisers were least likely to have a website. Broker-owners and associate brokers were most likely to have a website that they personally develop and maintain. Sixty-nine percent of REALTORS have had a website at least five years. Members who have been in the industry for 16 years or more typically have a website that is 10 years old. Among residential brokerage specialists with websites, 93 percent listed their own property listings while fewer commercial brokerage specialists did the same on their websites 81 percent. Other popular information presented on residential websites: home buying and selling information, mortgage or financial calculators, and links to their firm s website. Twelve percent of members reported having a real estate blog, which remained the same from last year s survey. Among all REALTORS, those younger than 39 years of age are more likely to have a blog, though 8 percent of those over 60 have a real estate blog. Sixty-one percent of members are using social media while an additional eight percent plan to in the future. The use of social networking sites is more widespread among younger REALTORS, with 80 percent of those 29 and younger using social media. Firm s Web Presence and Relocation Department Exhibits 1-16 and 1-23 REALTORS firms provide them with additional resources, including websites and relocation departments. Ninety-one percent of REALTORS reported that their firms have a web presence, and two percent indicated that there is not currently a presence, but a site is planned. Thirty-eight percent of REALTOR firms had a relocation department or business development department responsible for relocation activities. REALTORS who have been in the field for longer were more likely to be aware of the presence of a relocation department in their firm. Future Plans Exhibit 1-24 Eighty-two percent of members were certain they will remain in the business for two more years, a slightly higher figure than reported in the 2013 survey. Brokers and broker associates are slightly more certain than sales agents that they will remain in the field 84 percent compared to 80 percent. Members who are newest to the business are least certain they will remain active as a real estate professional during the next two years. 10

13 National Association of REALTORS EXHIBIT 1-1 REALTORS BY TYPE OF LICENSE (Percent of Respondents) 60% 57% 50% 40% 30% 26% 20% 17% 10% 0% Broker Broker Associate Sales Agent Appraiser Other 3% 1% EXHIBIT 1-2 SPECIALTY AND MAIN FUNCTION OF REALTORS ALL REALTORS LICENSED AS 2014 Survey 2013 Survey Broker Broker Associate Sales Agent Appraiser PRIMARY REAL ESTATE SPECIALTY Residential brokerage 78% 80% 71% 85% 83% 1% Commercial brokerage * Residential appraisal * * 78 Commercial appraisal * * * * * 20 Relocation * Property management * Counseling * Land/Development * Other specialties * MAIN FUNCTION Broker-owner (with 15% 15% 55% 3% 1% 1% Broker-owner (without * * * Associate broker * * Sales agent * Appraiser 3 3 * * * 96 Other

14 2014 MEMBER PROFILE Chapter 1: Business Characteristics of REALTORS EXHIBIT 1-3 PRIMARY BUSINESS SPECIALTY OF BROKER/BROKER ASSOCIATE LICENSEES, Residential brokerage 75% 76% 81% 76% 79% 79% 80% 79% 78% 75% 81% 77% Commercial brokerage Land/Development Relocation * Counseling Appraising Property management International NA * * 1 * 3 * * * * 1 * Other NA = Not Asked EXHIBIT 1-4 PRIMARY BUSINESS SPECIALTY OF SALES AGENT LICENSEES, Residential brokerage 88% 82% 84% 74% 75% 77% 86% 87% 83% 83% 83% 83% Commercial brokerage Land/Development Relocation * Counseling Appraising * 1 1 * * Property management International NA * * * * 1 * 1 1 Other NA = Not Asked 12

15 National Association of REALTORS EXHIBIT 1-5 SECONDARY BUSINESS SPECIALTY OF REALTORS (Percent of Respondents) Residential brokerage 35% Residential property management Relocation Commercial brokerage 16% 17% 17% Counseling Land development 10% 10% Commercial property management Residential appraisal International 3% 3% 4% Auction 2% Commercial appraisal 1% Other 10% None/Nothing 27% 0% 5% 10% 15% 20% 25% 30% 35% 40% 13

16 2014 MEMBER PROFILE Chapter 1: Business Characteristics of REALTORS EXHIBIT 1-6 REAL ESTATE EXPERIENCE OF REALTORS, BY MAIN FUNCTION ALL REALTORS MAIN FUNCTION IN FIRM 2014 Survey 2013 Survey (without (with Associate Broker (without (with sellling) Sales Agent Appraiser 1 year or less 9% 5% * 1% 5% 6% * 12% * 2 years 4 4 * years 3 4 * * 2 * 2 5 * 4 years 3 3 * 2 2 * 2 4 * 5 years * to 10 years to 15 years to 25 years to 39 years or more years Median (years) EXHIBIT 1-7 INCOME FROM PRIMARY REAL ESTATE SPECIALTY, BY YEARS OF EXPERIENCE REAL ESTATE EXPERIENCE Percent of income from real estate specialty ALL REALTORS 2 years or less 3 to 5 years 6 to 15 years 16 years or more Less than 50% 13% 23% 16% 11% 11% Less than 25% % to 49% % to less than 100% 47% 33% 42% 47% 52% 50% to 74% % to 99% % EXHIBIT 1-8 INCOME FROM PRIMARY REAL ESTATE SPECIALTY, BY NUMBER OF HOURS WORKED HOURS WORKED PER WEEK Percent of income from real estate specialty ALL REALTORS Less than 20 hours 20 to 39 hours 40 to 59 hours 60 hours or more Less than 50% 13% 41% 18% 6% 5% Less than 25% % to 49% % to less than 100% 47% 25% 45% 51% 53% 50% to 74% % to 99% %

17 National Association of REALTORS EXHIBIT 1-9 NUMBER OF PERSONAL ASSISTANTS ALL REALTORS LICENSED AS Broker/ Broker Associate Sales Agent (without (with MAIN FUNCTION IN FIRM Associate Broker (without (with sellling) None 84% 78% 88% 61% 71% 84% 89% 69% 88% One Two Three or more 1 2 * * Sales Agent EXHIBIT 1-10 NUMBER OF PERSONAL ASSISTANTS, BY YEARS OF REAL ESTATE EXPERIENCE REAL ESTATE EXPERIENCE ALL REALTORS 2 years or less 3 to 5 years 6 to 15 years 16 years or more None 84% 95% 90% 82% 79% One Two or more EXHIBIT 1-11 TASKS PERFORMED BY PERSONAL ASSISTANTS (Percent of Respondents) Process new listings and enter them in the MLS 67% Send mailings to past clients or prospects 61 Manage closing paperwork 56 Place/track advertising of listings 44 Schedule listing presentations, closings, and appointments 43 Photograph listings 41 Prepare escrow files 38 Order inspections 37 Prepare comps 36 Send progress reports to sellers 36 Write ads 36 Check MLS for expireds 30 Check newspapers for FSBOs 21 Prospect FSBOs 10 Other 38 15

18 2014 MEMBER PROFILE Chapter 1: Business Characteristics of REALTORS EXHIBIT 1-12 CHARACTERISTICS OF PERSONAL ASSISTANTS License Information Salary Expenses Employment Exclusivity Employment Arrangement Compensation Structure Licensed 54% Unlicensed 46 Paid by REALTOR 41 Paid by company 39 Both 20 Full-time 51 Part-time 49 Exclusive assistant 56 Shared with others 44 Independent contractor 49 Employee 51 Hourly 20 Salary 63 Arrangement varies 7 Percent of commission 6 Per task 4 EXHIBIT 1-13 FREQUENCY OF USE OF COMMUNICATIONS AND TECHNOLOGY PRODUCTS All REALTORS Daily or nearly every day A few times a week A few times a month A few times a year Rarely or Never 96% 3% 1% * * Laptop/Desktop computer * 2 Smartphone with wireless and Internet capabilities * 6 Cell phone (no and Internet) Global positioning system (GPS) Instant messaging (IM) Digital camera PDA/Handheld (no phone capabilities) Blogs RSS feeds Podcasts

19 National Association of REALTORS EXHIBIT 1-14 FREQUENCY OF USE OF BUSINESS SOFTWARE ALL REALTORS Daily or nearly every day A few times a week A few times a month A few times a year Rarely or Never Multiple listing 70% 14% 8% 4% 5% Contact management Document preparation Electronic contract and forms Customer relationship management Comparative market analysis Social media management tools Transaction management E-signature Graphics or presentation Property management Loan analysis Video EXHIBIT 1-15 PREFERRED METHOD OF COMMUNICATION WITH CLIENTS (Percent of Respondents) ALL REALTORS Current clients/customers Past clients/customers Potential clients/customers Do not use 94% 68% 65% 1% Telephone Text messaging Postal mail Instant messaging (IM) Blog Video chat Podcast

20 2014 MEMBER PROFILE Chapter 1: Business Characteristics of REALTORS EXHIBIT 1-16 REALTOR S FIRM WEB PRESENCE FIRM HAS WEBSITE 91% FIRM DOES NOT HAVE WEBSITE 7% FIRM DOES NOT HAVE WEBSITE BUT PLANS TO IN THE FUTURE 2% EXHIBIT 1-17 REALTORS WITH WEBSITES, BY LICENSE AND FUNCTION ALL REALTORS LICENSED AS Broker/ Broker Associate Sales Agent Broker- Owner (no Broker- Owner (with MAIN FUNCTION IN FIRM Associate Broker (without (with Appraiser Have a website 67% 72% 64% 71% 67% 76% 63% 73% 66% 50% A website developed and/or maintained by REALTOR A website provided by firm Do not have a website No website No website, but plan to have one in the future * 11 5 * Sales Agent EXHIBIT 1-18 REALTORS WITH WEBSITES, BY EXPERIENCE ALL REALTORS REAL ESTATE EXPERIENCE 2014 Survey 2013 Survey 2 years or less 3 to 5 years 6 to 15 years 16 years or more Have a website 67% 64% 61% 62% 70% 66% A website developed and/or maintained by REALTOR A website provided by firm Do not have a website No website No website, but plan to have one in the future

21 National Association of REALTORS EXHIBIT 1-19 LENGTH OF TIME REALTORS HAVE HAD A WEBSITE FOR BUSINESS USE (Percentage Distribution Among those with a Website) ALL REALTORS REAL ESTATE EXPERIENCE 2014 Survey 2013 Survey 2 years or less 3 to 5 years 6 to 15 years 16 years or more Less than one year 2% 1% 10% 1% 1% * 1 to 2 years to 4 years * or more years Median years EXHIBIT 1-20 INFORMATION ON REALTOR WEBSITES (Percent of Respondents with a Website) BROKERAGE SPECIALISTS ALL REALTORS Residential Commercial Own property listings 90% 93% 81% Information about home buying and selling Mortgage or financial calculators Link to my firm s website Community information/demographics Virtual tours School reports Links to state/local government websites Home valuation/comparative Market Analysis tools Current mortgage rates Links to real estate service providers (title companies, settlement services, etc) Links to mortgage lenders websites Appointment scheduler Chat live Link to commercial information exchange (CIE) Other 3 3 * EXHIBIT 1-21 REAL ESTATE BLOGS ALL REALTORS AGE 2014 Survey 2013 Survey 29 or younger 30 to to to or older Have a blog 12% 12% 20% 16% 14% 13% 8% Do not have a blog Do not have a blog, but plan to in the future

22 2014 MEMBER PROFILE Chapter 1: Business Characteristics of REALTORS EXHIBIT 1-22 ACTIVE USE OF SOCIAL OR PROFESSIONAL NETWORKING WEBSITES AGE Actively use social or professional networking websites: ALL REALTORS 29 or younger 30 to to to or older Yes 61% 80% 81% 73% 63% 48% No No, but plan to in the future EXHIBIT 1-23 RELOCATION ACTIVITY OF REALTORS LICENSED AS REAL ESTATE EXPERIENCE ALL REALTORS Broker/Broker Associate Sales Agent 2 years or less 3 to 5 years 6 to 15 years 16 years or more REALTORS s firm have a relocation department or business development department responsible for relocation activities Yes 38% 33% 44% 39% 37% 36% 40% No Don t know EXHIBIT 1-24 WILL REMAIN ACTIVE AS A REAL ESTATE PROFESSIONAL DURING THE NEXT TWO YEARS ALL REALTORS LICENSED AS REAL ESTATE EXPERIENCE 2014 Survey 2013 Survey Broker/Broker Associate Sales Agent 2 years or less 3 to 5 years 6 to 15 years 16 years or more Very certain 82% 80% 84% 80% 75% 81% 84% 82% Somewhat certain Not certain

23 CHAPTER 2: Business Activity of REALTORS REALTORS in 2013 reported somewhat improved market conditions. The typical member had a higher sales volume and the same number of transactions from the previous year both due to tightened inventory causing an increase in housing prices while restricting the homes available for potential buyers. Median weekly hours worked by the typical REALTOR was unchanged from the previous six years at 40 hours a week. Websites were not a major source of business, although REALTORS who invested more heavily in their website reported a greater number of inquiries and business. 21

24 2014 MEMBER PROFILE Chapter 2: Business Activity of REALTORS Appraisal Specialists Exhibits 2-1 through 2-3 Ninety-two percent of appraisal specialists appraise one to four unit residential properties, 28 percent appraise agricultural land and farms, and 27 percent appraised commercial (retail, office, shopping centers, etc.) The typical specialist appraised 200 properties in 2013 a figure which has remained consistent for several years. Twenty-four percent of appraisal specialists have a secondary specialty in residential brokerage. million. Residential brokers typically had transaction volumes of $2.5 million while residential sales agents had transaction volumes of $1.5 million. For the first time, the difficulty finding the right property has surpassed the difficulty in obtaining mortgage financing as the most cited reason for potential clients being limited. This finding speaks to the tightened inventory conditions seen in many areas of the country. Ability to obtain mortgage financing was the top reason limiting potential clients for three years. Prior to this, the reason members cited the most was the expectation that prices would fall further. Brokerage Specialists Exhibits 2-4 through 2-16 Forty-one percent of REALTORS practice buyer and seller agency with disclosed dual agency, which is virtually the same as in the 2013 survey. Thirty-two percent practice single agency, 10 percent practice buyer agency exclusively, and 10 percent practice transactional agency. In 2013, the typical agent had 12 transactions the same number that was reported in Twenty-two percent of members reported having at least one commercial transaction side. Members who are residential specialists typically had a total of 12 transaction sides compared to commercial specialists who typically had a total of eight transaction sides. Those who were commercial specialists reported that four of their transaction sides were in residential and four of their transaction sides were in commercial. REALTORS with two years of experience or less had a median of three transactions, compared to brokerage specialists with 16 years of experience or more who had a median of 15 transactions. Forty-seven percent of members had a transaction involving a foreclosure and 43 percent had a transaction involving a short sale. This is a decrease in both types of transactions from the 2013 report. Those with more real estate experience were more likely to have a foreclosure or short sale transaction. Property Management Exhibits 2-17 through 2-19 There was a drop in the number of properties that properties managers managed, from 49 properties in 2012 to 30 properties this year. Residential specialists managed a median of 36 properties, compared with commercial specialists who managed a median of five properties. The three most commonly reported tasks of property managers are collecting rent, selecting tenants, and taking tenant applications. Eightyfive percent of property management specialists managed single-family residential homes, 56 percent managed some multi-family properties, and 21 percent were active in office property management. Hours Worked Per Week Exhibit 2-20 The typical REALTOR worked 40 hours per week in 2013, a trend that has continued for several years. s and appraisers reported working the most hours, at 50 per week. All other members reported working 40 hours per week. All other members reported working 40 hours per week. The median sales volume for brokerage specialists increased to $1.8 million in 2013 from $1.5 million in Twenty-seven percent had brokerage sales volumes under $500,000 while 21 percent had transaction volumes above $5 22

25 National Association of REALTORS Repeat Business and Referrals Exhibits 2-21 through 2-24 The typical REALTOR earned 21 percent of their business from past clients and customers a share that is consistent with the previous two years. As expected, experienced REALTORS reported a greater share of repeat business from clients or referrals. Repeat business was more common among REALTORS with more experience (a median of 42 percent for those with 16 or more years of experience, compared to no repeat business for those with two years of experience or less). Referrals were also more common among REALTORS with more experience (a median of 27 percent for those with 16 or more years of experience, compared to no repeat business for those with two years of experience or less). Open Houses Exhibits 2-25 and 2-26 While open houses are a useful tool for home buyers to compare and contrast home features and neighborhoods, of residential brokerage specialists surveyed only 36 percent said they received some business from an open house. Sixtythree percent of agents reported no business as a result of open houses. Experience does not play a role in whether the member had business from an open house. Language and Nationality Exhibits 2-27 and 2-28 Thirty-three percent of REALTORS had clients who were foreign nationals, and 59 percent of REALTORS had clients whose primary language was not English. Among members who are fluent in a language other than English, 85 percent had clients whose primary language was not English. Website Business Activity Exhibits 2-29 through 2-33 The typical REALTOR spent $200 to maintain a website in The typical member brought in four inquiries and three percent of their business from their website. Brokers tend to spend more on their websites, while managers who do not sell and sales agents tend to spend the least amount on websites. Not surprisingly, those who spent the most on websites also got the highest number of inquiries and the largest percent of their overall business driven by website traffic. 23

26 2014 MEMBER PROFILE Chapter 2: Business Activity of REALTORS EXHIBIT 2-1 APPRAISAL: TYPES OF PROPERTIES APPRAISED (Percent of Respondents, Appraisal Specialists only) 2014 Survey 2013 Survey Residential (1 to 4 units) 92% 90% Agricultural land and farms Residential (5 or more units) Commercial (retail, office, shopping centers, etc.) Industrial (manufacturing, warehouses, etc.) Institutional (hospitals, schools, etc.) Other 5 16 EXHIBIT 2-2 APPRAISAL: NUMBER OF PROPERTIES APPRAISED, 2013 (Percentage Distribution, Appraisal Specialists only) ALL APPRAISAL SPECIALISTS RESIDENTIAL In 2013 In 2012 APPRAISAL SPECIALISTS 9 or fewer 3% * 4% 10 to to to to to to or more Median (properties)

27 National Association of REALTORS EXHIBIT 2-3 APPRAISAL: OTHER REAL ESTATE ACTIVITIES OF APPRAISAL SPECIALISTS (Percent of Respondents, Appraisal Specialists only) ALL APPRAISAL SPECIALISTS RESIDENTIAL APPRAISAL SPECIALISTS Residential appraisal 38% 37% Residential brokerage Commercial appraisal Commercial brokerage Counseling 12 8 Relocation 5 7 Residential property management 5 6 Commercial property management 4 3 Land/development 4 4 Auction * * International 1 1 Other 7 6 None EXHIBIT 2-4 BROKERAGE: AGENCY RELATIONSHIPS (Percentage Distribution, Brokerage Specialists only) ALL REALTORS RESIDENTIAL SPECIALISTS COMMERCIAL 2014 Survey 2013 Survey All Broker/Broker Associate Sales Agent SPECIALISTS Buyer agency and seller agency with disclosed dual agency 41% 42% 41% 44% 38% 43% Single agency Buyer agency exclusively Transactional agency Seller agency exclusively Other

28 2014 MEMBER PROFILE Chapter 2: Business Activity of REALTORS EXHIBIT 2-5 BROKERAGE: LISTINGS SOLD, 2013 (Percentage Distribution, Brokerage Specialists only) ALL REALTORS NUMBER OF OWN LISTINGS SOLD NUMBER OF OWN LISTINGS SOLD BY SOMEONE ELSE NUMBER OF OTHERS LISTINGS SOLD 0 listings 39% 20% 12% 1 listing listings listings listings listings to 10 listings listings or more Median listings (2013) Median listings (2012) RESIDENTIAL SPECIALISTS 0 listings 39% 19% 12% 1 listing listings listings listings listings to 10 listings listings or more Median listings (2013) Median listings (2012) COMMERCIAL SPECIALISTS 0 listings 39% 19% 12% 1 listing listings listings listings listings to 10 listings listings or more Median listings (2013) Median listings (2012)

29 National Association of REALTORS EXHIBIT 2-6 BROKERAGE: NUMBER OF TRANSACTION SIDES OR COMMERCIAL DEALS, 2013 (Percentage Distribution, Brokerage Specialists only) ALL REALTORS In 2013 In 2012 Residential sides Commercial sides Residential sides Commercial sides 0 transactions 5% 78% 3% 74% 1 to 5 transactions to 10 transactions to 15 transactions to 20 transactions 10 * 9 * 21 to 50 transactions * 51 transactions or more 4 * 5 * Median (transactions) RESIDENTIAL SPECIALISTS All Broker/Broker Associate Sales Agent Residential sides Commercial sides Residential sides Commercial sides Residential sides Commercial sides 0 transactions 4% 81% 2% 74% 6% 86% 1 to 5 transactions to 10 transactions to 15 transactions 17 * * 16 to 20 transactions 11 * 12 * 10 * 21 to 50 transactions 23 * 29 * 19 * 51 transactions or more 4 * 6 * 3 * Median (transactions) COMMERCIAL SPECIALISTS Residential sides Commercial sides 0 transactions 23% 20% 1 to 5 transactions to 10 transactions to 15 transactions to 20 transactions to 50 transactions transactions or more 2 3 Median (transactions)

30 2014 MEMBER PROFILE Chapter 2: Business Activity of REALTORS EXHIBIT 2-7 BROKERAGE: NUMBER OF TRANSACTION SIDES OR COMMERCIAL DEALS, BY EXPERIENCE, 2013 (Percentage Distribution, Brokerage Specialists only) REALTORS Residential sides Commercial sides 0 transactions 5% 78% 1 to 5 transactions to 10 transactions to 15 transactions to 20 transactions 10 * 21 to 50 transactions transactions or more 4 * Median (transactions) 12 0 Residential sides REAL ESTATE EXPERIENCE 2 years or less 3 to 5 years 6 to 15 years 16 years or more Commercial sides Residential sides Commercial sides Residential sides Commercial sides Residential sides Commercial sides 0 transactions 20% 93% 2% 85% 2% 80% 3% 69% 1 to 5 transactions to 10 transactions 17 * to 15 transactions 8 * * to 20 transactions 4 * 8 * * 21 to 50 transactions 4 * 17 * 25 * transactions or more * * 2 * 5 * 6 1 Median (transactions) EXHIBIT 2-8 BROKERAGE: NUMBER OF TRANSACTION SIDES INVOLVING PROPERTIES IN FORECLOSURE, 2013 (Percentage Distribution, Brokerage Specialists only) RESIDENTIAL SPECIALISTS COMMERCIAL ALL REALTORS All Broker/Broker Associate Sales Agent SPECIALISTS 0 transactions 53% 53% 46% 58% 62% 1 to 5 transactions to 10 transactions to 15 transactions to 20 transactions transactions or more Median (transactions)

31 National Association of REALTORS EXHIBIT 2-9 BROKERAGE: NUMBER OF TRANSACTION SIDES INVOLVING PROPERTIES IN FORECLOSURE, BY EXPERIENCE, 2013 (Percentage Distribution, Brokerage Specialists only) REAL ESTATE EXPERIENCE ALL REALTORS 2 years or less 3 to 5 years 6 to 15 years 16 years or more 0 transactions 53% 81% 57% 46% 52% 1 to 5 transactions to 10 transactions to 15 transactions 2 * to 20 transactions 1 * transactions or more 2 * * 2 3 Median (transactions) EXHIBIT 2-10 BROKERAGE: NUMBER OF TRANSACTION SIDES INVOLVING SHORT SALES, 2013 (Percentage Distribution, Brokerage Specialists only) RESIDENTIAL SPECIALISTS ALL REALTORS All Broker/Broker Associate Sales Agent COMMERCIAL SPECIALISTS 0 transactions 58% 57% 53% 60% 70% 1 to 5 transactions to 10 transactions transactions or more Median (transactions) EXHIBIT 2-11 BROKERAGE: NUMBER OF TRANSACTION SIDES INVOLVING SHORT SALES, BY EXPERIENCE, 2013 (Percentage Distribution, Brokerage Specialists only) REAL ESTATE EXPERIENCE ALL REALTORS 2 years or less 3 to 5 years 6 to 15 years 16 years or more 0 transactions 58% 85% 66% 52% 54% 1 to 5 transactions to 10 transactions 4 * transactions or more 2 * Median (transactions)

32 2014 MEMBER PROFILE Chapter 2: Business Activity of REALTORS EXHIBIT 2-12 BROKERAGE: SALES VOLUME, 2013 (Percentage Distribution, Brokerage Specialists only) ALL REALTORS RESIDENTIAL SPECIALISTS COMMERCIAL In 2013 In 2012 All Broker/Broker Associate Sales Agent SPECIALISTS Less than $500,000 27% 31% 27% 21% 31% 29% $500,000 to under $1 million $1 to under $1.5 million $1.5 to under $2 million $2 to under $3 million $3 to under $4 million $4 to under $5 million $5 to under $6 million $6 to under $7 million $7 to under $8 million $8 to under $10 million $10 million or more Median (millions) $1.8 $1.5 $1.8 $2.5 $1.5 $1.6 EXHIBIT 2-13 BROKERAGE: SALES VOLUME, BY EXPERIENCE, 2013 (Percentage Distribution, Brokerage Specialists only) REAL ESTATE EXPERIENCE ALL REALTORS 2 years or less 3 to 5 years 6 to 15 years 16 years or more Less than $500,000 27% 64% 28% 23% 20% $500,000 to under $1 million $1 to under $1.5 million $1.5 to under $2 million $2 to under $3 million $3 to under $4 million $4 to under $5 million $5 to under $6 million 5 * $6 to under $7 million 3 * $7 to under $8 million 3 * $8 to under $10 million 3 * $10 million or more 7 * Median (millions) $1.8 $0.3 $1.4 $2.1 $2.5 30

33 National Association of REALTORS EXHIBIT 2-14 THE MOST IMPORTANT FACTOR LIMITING POTENTIAL CLIENTS IN COMPLETING A TRANSACTION (Percentage Distribution, Brokerage Specialists only) RESIDENTIAL SPECIALISTS COMMERCIAL ALL REALTORS All Broker/Broker Associate Sales Agent SPECIALISTS Difficulty in finding the right property 33% 34% 31% 36% 21% Difficulty in obtaining mortgage finance No factors are limiting potential clients Ability to sell existing home Expectation that prices might fall further Low consumer confidence Concern about losing job Expectation that mortgage rates might come down * Other EXHIBIT 2-15 THE MOST IMPORTANT FACTOR LIMITING POTENTIAL CLIENTS IN COMPLETING A TRANSACTION, BY EXPERIENCE (Percentage Distribution, Brokerage Specialists only) REAL ESTATE EXPERIENCE ALL REALTORS 2 years or less 3 to 5 years 6 to 15 years 16 years or more Difficulty in finding the right property 33% 40% 35% 34% 31% Difficulty in obtaining mortgage finance No factors are limiting potential clients Ability to sell existing home Expectation that prices might fall further Low consumer confidence Concern about losing job Expectation that mortgage rates might come down * Other

34 2014 MEMBER PROFILE Chapter 2: Business Activity of REALTORS EXHIBIT 2-16 BROKERAGE: WEBSITES WHERE REALTORS PLACE THEIR LISTINGS (Percent of Respondents, Brokerage Specialists only) ALL REALTORS RESIDENTIAL SPECIALISTS COMMERCIAL 2014 Survey 2013 Survey All Broker/Broker Associate Sales Agent SPECIALISTS REALTOR.com 85% 85% 86% 89% 83% 52% Firm's website Third party aggregator 75 N/A Local MLS website Personal website Local REALTOR association website Social networking site Other websites (Google, Craigslist, Yahoo) Franchiser's website Local newspaper website Other Broker's website Local real estate magazine website Video hosting websites Commercial listing service** None ** Commercial listing service, e.g., CoStar, LoopNet, CCIMNet, or other commercial information exchange (CIE) N/A = Not Asked EXHIBIT 2-17 PROPERTY MANAGEMENT: TYPES OF PROPERTIES MANAGED (Percent of Respondents, Property Management Specialists only) 2014 Survey 2013 Survey Single-family residential 85% 88% Multi-family residential Office Retail Industrial 3 6 Land 5 * Other

35 National Association of REALTORS EXHIBIT 2-18 PROPERTY MANAGEMENT: NUMBER OF PROPERTIES MANAGED (Percentage Distribution, Property Management Specialists only) ALL REALTORS RESIDENTIAL SPECIALISTS COMMERCIAL SPECIALISTS 2014 Survey 2013 Survey 1 to 5 properties 19% 14% 16% 58% 6 to 10 properties to 20 properties to 40 properties to 60 properties * 61 to 80 properties * 81 to 100 properties * 101 to 500 properties * 501 properties or more Median (properties) EXHIBIT 2-19 PROPERTY MANAGEMENT: MANAGEMENT FUNCTIONS PERFORMED (Percent of Respondents, Property Management Specialists only) 2014 Survey 2013 Survey Collect rent 87% 87% Select tenants Take tenant applications Marketing Initiate evictions Perform small repairs Perform large repairs or upgrades Initiate legal actions (other than evictions) Make tax payments Make mortgage payments Other

36 2014 MEMBER PROFILE Chapter 2: Business Activity of REALTORS EXHIBIT 2-20 HOURS WORKED PER WEEK Less than 20 hours 20 to 39 hours 40 to 59 hours 60 hours or more Median (hours) ALL REALTORS LICENSED AS MAIN FUNCTION IN FIRM 2014 Survey 2013 Survey Broker/ Broker Associate Sales Agent (without (with Associate Broker (without (with sellling) Sales Agent Appraiser 10% 11% 8% 12% 12% 8% 9% 7% 4% 12% 3% EXHIBIT 2-21 REPEAT BUSINESS FROM PAST CONSUMERS AND CLIENTS, BY SPECIALTY, 2013 PRIMARY REAL ESTATE SPECIALTY ALL REALTORS APPRAISAL BROKERAGE PROPERTY MANAGEMENT In 2013 In 2012 Residential Commercial Residential Commercial Residential Commercial None 18% 18% 6% 7% 17% 13% 12% 11% Less than 10% Up to 25% Up to 50% More than 50% Median 21% 21% 66% 62% 20% 32% 41% 44% EXHIBIT 2-22 REPEAT BUSINESS FROM PAST CONSUMERS AND CLIENTS, BY EXPERIENCE, 2013 REAL ESTATE EXPERIENCE ALL REALTORS 2 years or less 3 to 5 years 6 to 15 years 16 years or more None 18% 66% 30% 12% 6% Less than 10% Up to 25% Up to 50% More than 50% Median 21% * 7% 20% 42% 34

37 National Association of REALTORS EXHIBIT 2-23 BUSINESS THROUGH REFERRALS FROM PAST CONSUMERS AND CLIENTS, BY SPECIALTY, 2013 PRIMARY REAL ESTATE SPECIALTY ALL REALTORS APPRAISAL BROKERAGE PROPERTY MANAGEMENT In 2013 In 2012 Residential Commercial Residential Commercial Residential Commercial None 14% 13% 9% 8% 12% 9% 9% 8% Less than 10% Up to 25% Up to 50% More than 50% Median 21% 21% 18% 20% 22% 22% 19% 17% EXHIBIT 2-24 BUSINESS THROUGH REFERRALS FROM PAST CONSUMERS AND CLIENTS, BY EXPERIENCE, 2013 REAL ESTATE EXPERIENCE ALL REALTORS 2 years or less 3 to 5 years 6 to 15 years 16 years or more None 14% 52% 18% 8% 6% Less than 10% Up to 25% Up to 50% More than 50% Median 21% * 14% 21% 27% EXHIBIT 2-25 BUSINESS ORIGINATED FROM AN OPEN HOUSE, BY SPECIALTY, 2013 RESIDENTIAL SPECIALISTS ALL REALTORS All Broker/Broker Associate Sales Agent None 63% 58% 62% 56% Less than 10% Up to 25% Up to 50% More than 50% Median * * * * 35

38 2014 MEMBER PROFILE Chapter 2: Business Activity of REALTORS EXHIBIT 2-26 BUSINESS ORIGINATED FROM AN OPEN HOUSE, BY EXPERIENCE, 2013 REAL ESTATE EXPERIENCE ALL REALTORS 2 years or less 3 to 5 years 6 to 15 years 16 years or more None 63% 68% 61% 62% 65% Less than 10% Up to 25% Up to 50% More than 50% Median * * * * * EXHIBIT 2-27 CUSTOMERS AND CLIENTS WHOSE PRIMARY LANGUAGE IS NOT ENGLISH, 2013 ALL REALTORS REALTOR IS In 2013 In 2012 Fluent in a language other than English Fluent in English only None 38% 40% 15% 42% Less than 10% Up to 25% Up to 50% More than 50% Median 4% 4% 19% 3% EXHIBIT 2-28 CUSTOMERS AND CLIENTS WHO WERE FOREIGN NATIONALS, 2013 ALL REALTORS In 2013 In 2012 None 63% 64% Less than 10% Up to 25% 5 5 Up to 50% 2 2 More than 50%

39 National Association of REALTORS EXHIBIT 2-29 EXPENDITURES TO MAINTAIN REALTOR WEBSITE, 2013 ALL REALTORS LICENSED AS MAIN FUNCTION IN FIRM In 2013 In 2012 Broker/ Broker Associate Sales Agent (without (with Associate Broker (without (with sellling) Sales Agent None 25% 22% 16% 32% 3% 6% 20% 83% 23% 31% Less than $ * $100 to $ $500 to $ * $1,000 or more * Median $200 $220 $330 $90 $520 $540 $260 $0 $280 $100 EXHIBIT 2-30 CUSTOMER INQUIRIES GENERATED FROM WEBSITE, 2013 ALL REALTORS LICENSED AS MAIN FUNCTION IN FIRM In 2013 In 2012 Broker/ Broker Associate Sales Agent (without (with Associate Broker (without (with sellling) Sales Agent None 28% 28% 23% 32% 19% 19% 24% 41% 18% 31% 1 to 5 inquiries to 10 inquiries to 20 inquiries * to 50 inquiries * to 100 inquiries * 4 2 More than 100 inquiries Median (inquiries)

40 2014 MEMBER PROFILE Chapter 2: Business Activity of REALTORS EXHIBIT 2-31 CUSTOMER INQUIRIES GENERATED FROM WEBSITE BY AMOUNT SPENT TO MAINTAIN, 2013 AMOUNT SPENT TO MAINTAIN THE WEBSITE ALL REALTORS None Less than $100 $100 to $499 $500 to $999 $1,000 or more None 28% 48% 34% 23% 19% 10% 1 to 5 inquiries to 10 inquiries to 20 inquiries to 50 inquiries to 100 inquiries More than 100 inquiries Median (inquiries) EXHIBIT 2-32 BUSINESS GENERATED FROM REALTOR WEBSITE, 2013 ALL REALTORS LICENSED AS MAIN FUNCTION IN FIRM In 2013 In 2012 Broker/ Broker Associate Sales Agent (without (with Associate Broker (without (with sellling) Sales Agent None 35% 32% 30% 40% 14% 23% 34% 69% 21% 39% 1% to 5% % to 10% * % to 25% % to 50% More than 50% * 10 4 Median (percent of business) 3% 4% 4% 2% 9% 6% 3% * 5% 2% EXHIBIT 2-33 BUSINESS GENERATED FROM REALTOR WEBSITE, BY AMOUNT SPENT TO MAINTAIN, 2013 AMOUNT SPENT TO MAINTAIN THE WEBSITE ALL REALTORS None Less than $100 $100 to $499 $500 to $999 $1,000 or more None 35% 60% 40% 28% 23% 15% 1% to 5% % to 10% % to 25% % to 50% More than 50% Median (percent of business) 3% * 2% 4% 5% 9% 38

41 CHAPTER 3: Income and Expenses of REALTORS The median gross income of REALTORS - income earned from real estate activities was $47,700 in 2013, up from $43,500 in This is a positive sign that suggests both sales volume and prices are rebounding. REALTOR net income did not rise as steeply, as expenses also rose in 2013 to $6,540 from $4,900 in Compared across functions, 2013 data shows that managers and brokers not involved in selling activities, and appraisers, typically earned the highest annual income. As real estate is often a referrals-based business, REALTORS who have been involved in the business the longest are typically the most successful: those practicing for 16 years or more earned the highest income in Sales agents (at 12 percent) are less likely to work under a 100 percent commission than brokers (at 24 percent). Percentage split-commission was even more popular with sales agents, with eight in ten receiving this type of compensation structure. A comparison of business characteristics also shows that those who earned more in 2013 shared some interesting similarities: 85 percent of those who earned $150,000 or more have a website, received 70 percent of their business from referrals or repeat business from past consumers and clients, and work 50 hours a week. As the real estate business is largely commissionbased, higher income levels are strongly associated with more real estate transactions. Finally, as REALTORS years of experience increase, they build a client network through referrals of past clients and repeat businesses. 39

42 2014 MEMBER PROFILE Chapter 3: Income and Expenses of REALTORS Compensation Structure Exhibits 3-1 through 3-3 In 2013, 68 percent of REALTORS were compensated under a percentage split-commission. Seventeen percent were compensated by 100 percent commission. Brokers are more likely to work under a 100 percent commission than sales agents (24 percent vs. 12 percent). Percentage splitcommission was even more popular with sales agents, with eight in ten receiving this type of compensation structure. Those with less experience more often had percentage splitcommission arrangements, as did those who had lower personal earnings. Business Expenses Exhibits 3-4 through 3-13 Median business expenses were $4,900 in 2012 and rose to $6,560 in Brokers typically had higher business expenses at $9,400 compared to $4,840 for sales agents. REALTOR Income Exhibits 3-14 through 3-17 The median gross income of REALTORS income earned from real estate activities was $47,700 in 2013, an increase from $43,500 in Those who function as sales agents typically reported a median income of $37,200, an increase from $35,700 reported in Broker owners, managers, and appraisers had higher gross and net incomes than other groups. Income is typically commensurate with experience. As REALTORS gain experience and a larger network of referrals and previous clients, their income generally rises. REALTORS with 16 years or more experience had a median gross income of $70,200 compared to REALTORS with two years or less experience that had a median gross income of $8,500. The number of hours worked per week is also strongly correlated with income. REALTORS who typically worked less than 20 hours a week had a median gross income of $9,400 a year, and those who worked 60 or more hours per week had a median gross income of $97,500. There is a strong correlation between REALTOR income and expenses. REALTORS with gross personal incomes of less than $10,000 a year reported a median business expense level of $2,130, compared to those REALTORS who made $150,000 or more with median business expenses of $27,860. The median administrative expenses and business promotion expenses were two areas where members had a decrease in annual expenses from 2012 to Expenses for affinity/referral relationships and office lease/building expenses remained flat with the median amount spent in 2012 and 2013 $0; however, for the small share of members who have expenses in these categories, the expenses remain high. Increases in expenses were seen in marketing of services, professional development, technology, and the business use of the vehicle. 40

43 National Association of REALTORS Income Characteristics of REALTORS Exhibit 3-18 Looking at the comparison of REALTORS experience in real estate, number of hours worked, function performed with the firm, and license type reveal some interesting characteristics among income groups. For instance, REALTORS in higher income groups report they are more likely to remain active as a real estate professional during the next two years: 94 percent of those in the $150,000 or more income bracket said they were very certain to remain active in the business compared to only 68 percent in the less than $10,000 income group. REALTORS level of education also factors in to reported income. While 50 percent in the lowest income group have a bachelor s degree or higher, this number is 61 percent in the highest income group. Of those in the highest income group, 95 percent said that real estate was their only occupation, compared with 54 percent in the lowest income group. Median tenure in firm is also higher in the higher income group, with nine years compared to two in the lowest income group another reflection of experience. The home ownership level in the highest income group was 96 percent compared to 78 percent in the lowest income group. Because the real estate business is largely based on commissions, higher income levels also correlate with a higher number of real estate transactions. As REALTORS years of experience increase, they build a client base through referrals of past clients and repeat businesses. REALTORS making $150,000 or more had a median of 38 percent of repeat business from past clients and 32 percent of business through referrals from past clients, compared to no repeat business from past clients and two percent of business through referrals for those making less than $10,

44 2014 MEMBER PROFILE Chapter 3: Income and Expenses of REALTORS EXHIBIT 3-1 COMPENSATION STRUCTURES FOR REALTORS ALL REALTORS LICENSED AS 2014 Survey 2013 Survey Broker/Broker Associate Sales Agent Percentage commission split 68% 68% 56% 80% 100% commission Commission plus share of profits Salary plus share of profits/production bonus Salary only Share of profits only * Other EXHIBIT 3-2 COMPENSATION STRUCTURES FOR REALTORS, BY EXPERIENCE REAL ESTATE EXPERIENCE ALL REALTORS 2 years or less 3 to 5 years 6 to 15 years 16 years or more Percentage commission split 68% 84% 80% 72% 57% 100% commission Commission plus share of profits Salary plus share of profits/production bonus Salary only 2 2 * 1 2 Share of profits only 1 * Other

45 National Association of REALTORS EXHIBIT 3-3 COMPENSATION STRUCTURES FOR REALTORS, BY GROSS PERSONAL INCOME ALL REALTORS Less than $10,000 $10,000 to $24,999 GROSS PERSONAL INCOME $25,000 to $49,999 $50,000 to $99,999 $100,000 to $149,999 $150,000 or more Percentage commission split 68% 79% 80% 72% 65% 57% 51% 100% commission Commission plus share of profits Salary plus share of profits/ production bonus 3 * Salary only Share of profits only 1 1 * Other EXHIBIT 3-4 TOTAL REAL ESTATE BUSINESS EXPENSES, 2013 ALL REALTORS LICENSED AS MAIN FUNCTION IN FIRM In 2013 In 2012 Broker/ Broker Associate Sales Agent (without (with Associate Broker (without (with sellling) Sales Agent None 5% 3% 6% 4% 14% 8% 4% * 3% 4% Less than $ $500 to $ $1,000 to $2, $2,500 to $4, $5,000 to $9, $10,000 to $19, $20,000 to $29, * 14 7 $30,000 to $49, * 6 6 $50,000 to $99, * * 1 $100,000 or more * 6 1 Median $6,560 $4,900 $9,400 $4,840 $9,310 $11,820 $8,690 $5,020 $8,290 $5,340 43

46 2014 MEMBER PROFILE Chapter 3: Income and Expenses of REALTORS EXHIBIT 3-5 TOTAL REAL ESTATE EXPENSES, BY GROSS PERSONAL INCOME, 2013 ALL REALTORS Less than $10,000 $10,000 to $24,999 $25,000 to $34,999 GROSS PERSONAL INCOME $35,000 to $49,999 $50,000 to $74,999 $75,000 to $99,999 $100,000 to $149,999 $150,000 or more None 5% 7% 1% 1% 1% 2% 3% 8% 13% Less than $ * * $500 to $ $1,000 to $2, $2,500 to $4, $5,000 to $9, $10,000 to $19, $20,000 to $29, $30,000 to $49,999 7 * $50,000 to $99,999 1 * * * * $100,000 or more 2 * * * * * Median $6,560 $2,130 $3,590 $4,930 $6,670 $9,640 $13,290 $17,570 $27,860 EXHIBIT 3-6 ADMINISTRATIVE EXPENSES, 2013 ALL REALTORS LICENSED AS MAIN FUNCTION IN FIRM In 2013 In 2012 Broker/ Broker Associate Sales Agent (without (with Associate Broker (without (with sellling) Sales Agent None 20% 15% 21% 20% 47% 22% 18% 28% 22% 18% Less than $ $500 to $ $1,000 to $1, $1,500 to $2, $2,500 to $4, $5,000 to $9, $10,000 to $14, * 3 2 * * 2 $15,000 or more * 3 2 Median $760 $830 $930 $660 $130 $1,140 $880 $420 $690 $710 44

47 National Association of REALTORS EXHIBIT 3-7 AFFINITY/REFERRAL RELATIONSHIP EXPENSES, 2013 ALL REALTORS LICENSED AS MAIN FUNCTION IN FIRM In 2013 In 2012 Broker/ Broker Associate Sales Agent (without (with Associate Broker (without (with sellling) Sales Agent None 55% 55% 52% 57% 76% 55% 49% 79% 43% 54% Less than $ $500 to $ $1,000 to $1, $1,500 to $2, * 4 5 $2,500 to $4, * 5 5 $5,000 to $9, * $10,000 to $14, * 2 3 * 3 1 $15,000 or more * 3 2 Median $0 $0 $0 $0 $0 $0 $40 $0 $190 $0 EXHIBIT 3-8 MARKETING OF SERVICES EXPENSES, 2013 ALL REALTORS LICENSED AS MAIN FUNCTION IN FIRM In 2013 In 2012 Broker/ Broker Associate Sales Agent (without (with Associate Broker (without (with sellling) Sales Agent None 19% 17% 17% 18% 51% 21% 10% 49% 12% 16% Less than $ $500 to $ $1,000 to $1, $1,500 to $2, $2,500 to $4, * 15 7 $5,000 to $9, * 7 8 * 3 4 $10,000 to $14, * 4 1 $15,000 or more * 3 2 Median $620 $590 $840 $530 $0 $860 $950 $20 $850 $620 Median percent spent on online marketing 5% 10% 5% 5% 5% 5% 5% 5% 5% 5% and promotion 45

48 2014 MEMBER PROFILE Chapter 3: Income and Expenses of REALTORS EXHIBIT 3-9 OFFICE LEASE/BUILDING EXPENSES, 2013 ALL REALTORS LICENSED AS MAIN FUNCTION IN FIRM In 2013 In 2012 Broker/ Broker Associate Sales Agent (without (with Associate Broker (without (with sellling) Sales Agent None 70% 70% 65% 73% 73% 54% 69% 80% 73% 73% Less than $ $500 to $ * $1,000 to $1, * $1,500 to $2, * 3 3 $2,500 to $4, $5,000 to $9, * 3 2 $10,000 to $14, * 1 1 $15,000 or more * 6 1 Median $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 EXHIBIT 3-10 PROFESSIONAL DEVELOPMENT EXPENSES, 2013 ALL REALTORS LICENSED AS MAIN FUNCTION IN FIRM In 2013 In 2012 Broker/ Broker Associate Sales Agent (without (with Associate Broker (without (with sellling) Sales Agent None 9% 8% 11% 8% 39% 16% 5% 24% 6% 7% Less than $ $500 to $ $1,000 to $1, $1,500 to $2, $2,500 to $4, $5,000 to $9, * 2 2 * 1 1 $10,000 to $14,999 * * * * 2 1 * * * * $15,000 or more * 1 1 * 2 1 * * 1 * Median $710 $640 $750 $680 $410 $740 $800 $420 $890 $690 46

49 National Association of REALTORS EXHIBIT 3-11 BUSINESS PROMOTION EXPENSES, 2013 ALL REALTORS LICENSED AS MAIN FUNCTION IN FIRM In 2013 In 2012 Broker/ Broker Associate Sales Agent (without (with Associate Broker (without (with sellling) Sales Agent None 20% 14% 19% 19% 59% 21% 13% 40% 17% 17% Less than $ $500 to $ $1,000 to $1, $1,500 to $2, $2,500 to $4, * 9 11 * 7 7 $5,000 to $9, * 10 5 $10,000 to $14, * 3 1 $15,000 or more Median $590 $640 $760 $510 $0 $820 $830 $160 $850 $590 Median percent spent on online marketing 5% 10% 5% 5% 5% 5% 5% 5% 5% 5% and promotion EXHIBIT 3-12 TECHNOLOGY PRODUCTS AND SERVICES EXPENSES, 2013 ALL REALTORS LICENSED AS MAIN FUNCTION IN FIRM In 2013 In 2012 Broker/ Broker Associate Sales Agent (without (with Associate Broker (without (with sellling) Sales Agent None 13% 13% 13% 14% 34% 15% 10% 22% 10% 12% Less than $ $500 to $ $1,000 to $1, $1,500 to $2, * $2,500 to $4, $5,000 to $9, * 4 2 $10,000 to $14,999 1 * * 1 * $15,000 or more * 1 1 * 6 1 * * * * Median $760 $690 $890 $640 $660 $1,020 $860 $460 $810 $700 47

50 2014 MEMBER PROFILE Chapter 3: Income and Expenses of REALTORS EXHIBIT 3-13 BUSINESS USE OF VEHICLE EXPENSES, 2013 ALL REALTORS LICENSED AS MAIN FUNCTION IN FIRM In 2013 In 2012 Broker/ Broker Associate Sales Agent (without (with Associate Broker (without (with sellling) Sales Agent None 9% 9% 10% 8% 42% 13% 5% 22% 7% 7% Less than $ $500 to $ $1,000 to $1, $1,500 to $2, $2,500 to $4, $5,000 to $9, $10,000 to $14, * 6 7 * 7 4 $15,000 or more * 5 3 Median $1,860 $1,790 $2,270 $1,480 $490 $2,510 $2,300 $970 $2,330 $1,630 EXHIBIT 3-14 ANNUAL INCOME OF REALTORS, 2013 ALL REALTORS LICENSED AS Gross Income: Before taxes and expenses In 2013 In 2012 Broker/Broker Associate Sales Agent Less than $10,000 18% 18% 10% 25% $10,000 to $24, $25,000 to $34, $35,000 to $49, $50,000 to $74, $75,000 to $99, $100,000 to $149, $150,000 to $199, $200,000 to $249, $250,000 or more Median $47,700 $43,500 $66,300 $35,000 Net Income: After taxes and expenses Less than $10,000 26% 27% 18% 34% $10,000 to $24, $25,000 to $34, $35,000 to $49, $50,000 to $74, $75,000 to $99, $100,000 to $149, $150,000 to $199, $200,000 to $249, $250,000 or more Median $29,900 $27,400 $40,500 $22,500 48

51 National Association of REALTORS EXHIBIT 3-15 ANNUAL INCOME OF REALTORS, BY MAIN FUNCTION, 2013 Gross Income: Before taxes and expenses ALL REALTORS (without (with MAIN FUNCTION IN FIRM Associate Broker (without (with sellling) Sales Agent Appraiser Less than $10,000 18% 10% 9% 13% 8% 4% 23% 3% $10,000 to $24, * $25,000 to $34, $35,000 to $49, $50,000 to $74, $75,000 to $99, $100,000 to $149, $150,000 to $199, $200,000 to $249, $250,000 or more Median $47,700 $113,000 $76,900 $55,600 $75,700 $78,800 $37,200 $76,800 Net Income: After taxes and expenses Less than $10,000 26% 12% 16% 19% 11% 10% 32% 8% $10,000 to $24, $25,000 to $34, $35,000 to $49, $50,000 to $74, $75,000 to $99, $100,000 to $149, $150,000 to $199, $200,000 to $249, * $250,000 or more * Median $29,900 $70,700 $44,900 $34,700 $54,100 $48,300 $23,500 $52,000 49

52 2014 MEMBER PROFILE Chapter 3: Income and Expenses of REALTORS EXHIBIT 3-16 ANNUAL INCOME OF REALTORS, BY EXPERIENCE, 2013 REAL ESTATE EXPERIENCE Gross Income: Before taxes and expenses ALL REALTORS 2 years or less 3 to 5 years 6 to 15 years 16 years or more Less than $10,000 18% 59% 22% 13% 9% $10,000 to $24, $25,000 to $34, $35,000 to $49, $50,000 to $74, $75,000 to $99, $100,000 to $149, $150,000 to $199,999 5 * $200,000 to $249,999 3 * $250,000 or more 5 * Median $47,700 $8,500 $30,100 $51,800 $70,200 Net Income: After taxes and expenses Less than $10,000 26% 67% 33% 22% 16% $10,000 to $24, $25,000 to $34, $35,000 to $49, $50,000 to $74, $75,000 to $99, $100,000 to $149, $150,000 to $199,999 2 * $200,000 to $249,999 2 * $250,000 or more 2 * Median $29,900 $7,500 $20,700 $32,400 $42,200 50

53 National Association of REALTORS EXHIBIT 3-17 ANNUAL INCOME OF REALTORS, BY HOURS WORKED, 2013 HOURS PER WEEK Gross Income: Before taxes and expenses ALL REALTORS Less than 20 hours 20 to 39 hours 40 to 59 hours 60 hours or more Less than $10,000 18% 53% 25% 9% 6% $10,000 to $24, $25,000 to $34, $35,000 to $49, $50,000 to $74, $75,000 to $99, $100,000 to $149, $150,000 to $199, $200,000 to $249,999 3 * $250,000 or more Median $47,700 $9,400 $27,300 $66,000 $97,500 Net Income: After taxes and expenses Less than $10,000 26% 64% 37% 14% 13% $10,000 to $24, $25,000 to $34, $35,000 to $49, $50,000 to $74, $75,000 to $99, $100,000 to $149, $150,000 to $199, $200,000 to $249,999 2 * $250,000 or more Median $29,900 $7,800 $17,600 $41,600 $59,100 51

54 2014 MEMBER PROFILE Chapter 3: Income and Expenses of REALTORS EXHIBIT 3-18 BUSINESS CHARACTERISTICS AND ACTIVITY OF REALTORS, BY GROSS PERSONAL INCOME ALL REALTORS Less than $10,000 $10,000 to $24,999 GROSS PERSONAL INCOME $25,000 to $49,999 $50,000 to $99,999 $100,000 to $149,999 $150,000 or more Percent of REALTORS in the category 100% 18% 14% 20% 24% 11% 13% REAL ESTATE EXPERIENCE 2 years or less 13% 42% 17% 9% 3% 3% * 3 to 5 years to 15 years years or more Have a Website 67% 51% 55% 63% 73% 78% 85% WILL REMAIN ACTIVE AS A REAL ESTATE PROFESSIONAL DURING THE NEXT TWO YEARS Very certain 82% 68% 74% 79% 88% 92% 94% Somewhat certain Not certain BUSINESS ACTIVITY Brokerage: Median number of transactions** Brokerage: Median sales volume (millions) $1.8 $0.2 $0.6 $1.4 $2.8 $4.8 $8.4 Median hours worked per week Percent of repeat business from past consumers and clients (median) 21% * 14% 20% 28% 35% 38% Percent of business through referrals from past consumers and clients (median) 21% 2% 18% 21% 24% 29% 32% AFFILIATION WITH FIRM Independent Contractor 82% 90% 89% 85% 79% 76% 71% Employee Other Tenure at firm (median years) DEMOGRAPHICS Age 39 or younger 11% 18% 10% 10% 10% 10% 9% 40 to or older Median age Education: bachelor's degree or higher 50% 50% 44% 44% 48% 57% 61% Real estate is only occupation 78% 54% 66% 79% 88% 91% 95% Gross household income (median) $105,500 $68,800 $73,400 $75,900 $107,800 $165,100 $270,100 Real estate is primary source of income for household 48% 16% 20% 42% 64% 74% 83% Homeownership rate 86% 78% 84% 83% 89% 90% 96% Voted in the last national election 93% 89% 93% 92% 95% 96% 94% ** Both residential and commercial 52

55 CHAPTER 4: Office and Firm Affiliation of REALTORS Despite the unsettled nature of the housing markets in the past few years, REALTOR office and firm affiliation remained largely unchanged. Most REALTORS are independent contractors typically affiliated with an independent company. One-office firms were predominant among respondents. The typical REALTOR had been with their current firm for six years. Mergers and consolidations continued to affect about one in ten REALTORS. Because most members are independent contractors, firm benefits are not common. Among those receiving benefits from their firm, liability insurance was the most commonly received. 53

56 2014 MEMBER PROFILE Chapter 4: Office and Firm Affiliation of REALTORS Firm Affiliation Exhibits 4-1 through 4-3 More REALTORS report that they work with an independent company than any other type of company (57 percent). Brokers and broker associates (64 percent) are more often affiliated with an independent company than sales agents (52 percent). By function in the firm, broker-owners who sell and appraisers most often reported an affiliation with an independent company. Among the primary specialties, those in appraisal (80 percent), residential property management (82 percent), and commercial property management (100 percent) were most likely to be affiliated with an independent company. Eight in ten members are independent contractors at their firms. Number of Offices and Tenure at Firm Exhibits 4-4 and 4-5 The number of offices in firms that REALTORS are affiliated with is little changed from last year. About half of REALTORS are affiliated with firms that have a single office. About onequarter of REALTORS (23 percent) work at a firm with two to four offices. Sales agents and associate brokers, and managers who sell typically work in firms with two or more offices, while the median number of offices for broker-owners and appraisers is one office. s who do not sell typically work for firms with seven offices. The median tenure for REALTORS with their current firm decreased slightly to six years. By function within the firm, sales agents have the least tenure at their current firm while broker-owners who do not sell and appraisers tend to have the longest tenure. Brokers Ownership Interest Exhibit 4-6 Sixty-two percent of brokers had some ownership interest in their firm, and 42 percent reported having sole ownership of their firm. The share was even higher for brokers affiliated with independent companies, where 52 percent had sole ownership. Benefits Exhibit 4-7 Among all REALTORS, errors and omissions insurance was the most common benefit received from the firm; one-third reported this benefit. However, 49 percent of members also report paying errors and omissions insurance out of pocket. Members also report receiving some benefits from a partner, spouse, or family member the most common benefit received this way was health insurance (29 percent), followed by dental insurance (26 percent), and vision care (23 percent). The most common occurrence of benefits, however, with the exception of errors and omissions insurance, is that the member does not have coverage. Mergers Exhibits 4-8 through 4-10 REALTOR experience with mergers was similar to what was reported in the last few years. Nine percent of REALTORS worked for a firm that was either bought or merged in the past two years. Most who changed firms after the merger did so voluntarily. While most REALTORS who worked for a firm that was bought or merged were not affected in their compensation, firm changers were more likely than non-changers to see a change in compensation. 54

57 National Association of REALTORS EXHIBIT 4-1 FIRM AFFILIATION, BY LICENSE TYPE AND FUNCTION LICENSED AS (without (with MAIN FUNCTION IN FIRM (without (with sellling) Firm Description ALL REALTORS Broker/Broker Associate Sales Agent Associate Broker Sales Agent Appraiser Other Independent company 57% 64% 52% 63% 85% 52% 47% 60% 51% 81% 64% Franchised company Other * 2 3 * EXHIBIT 4-2 FIRM AFFILIATION, BY SPECIALTY PRIMARY REAL ESTATE SPECIALTY BROKERAGE PROPERTY MANAGEMENT Firm Description ALL REALTORS APPRAISAL Residential Commercial Residential Commercial Independent company 57% 80% 54% 63% 82% 100% Franchised company * Other * EXHIBIT 4-3 REALTOR AFFILIATION WITH FIRMS INDEPENDENT CONTRACTOR 82% OTHER 13% EMPLOYEE 6% 55

58 2014 MEMBER PROFILE Chapter 4: Office and Firm Affiliation of REALTORS EXHIBIT 4-4 NUMBER OF OFFICES ALL REALTORS LICENSED AS MAIN FUNCTION IN FIRM 2014 Survey 2013 Survey Broker/ Broker Associate Sales Agent (no (with Associate Broker (without (with sellling) Appraiser 1 office 52% 50% 61% 42% 74% 88% 40% 24% 40% 41% 91% 2 to 4 offices to 9 offices * 10 to 99 offices or more offices * Median Sales Agent EXHIBIT 4-5 TENURE OF REALTORS AT THEIR PRESENT FIRM ALL REALTORS LICENSED AS MAIN FUNCTION IN FIRM 2014 Survey 2013 Survey Broker/ Broker Associate Sales Agent (no (with Associate Broker (without (with sellling) Sales Agent Appraiser 1 year or less 18% 7% 11% 24% * 8% 13% 30% 13% 23% 3% 2 years years * years years * to 11 years years or more Median (years)

59 National Association of REALTORS EXHIBIT 4-6 BROKER OWNERSHIP INTEREST, 2014 ALL BROKERS FIRM AFFILIATION 2014 Survey 2013 Survey Independent company Franchised company Other Sole ownership 42% 43% 52% 15% 27% Partner in a partnership Stockholder and/or corporate office No ownership interest Other * EXHIBIT 4-7 BENEFITS RECEIVED THROUGH FIRM, FAMILY, OR PAYS OUT OF POCKET (Percent of Respondents) Provided by Firm Provided by Partner/ Spouse/ Family Pays for out of pocket Do not receive Errors and omissions (liability insurance) 33% 1% 49% 18% Health insurance Paid vacation/sick days Pension/SEP/401(K) Life insurance Dental insurance Disability insurance (long-term care) Vision care Other

60 2014 MEMBER PROFILE Chapter 4: Office and Firm Affiliation of REALTORS EXHIBIT 4-8 WORKED FOR A FIRM THAT WAS BOUGHT OR MERGED NO 91% YES 9% EXHIBIT 4-9 REALTORS CHANGING FIRMS DUE TO CONSOLIDATION REALTOR changed firms as a result of a merger: 2014 Survey 2013 Survey Yes, voluntarily 28% 28% Yes, involuntarily 7 4 No EXHIBIT 4-10 CHANGE IN COMPENSATION RESULTING FROM MERGER Among all who worked for a firm that was bought or merged 2014 SURVEY 2013 SURVEY Among those who changed firms as a result of merger Among all who worked for a firm that was bought or merged Among those who changed firms as a result of merger It increased 11% 15% 9% 19% It stayed the same It decreased

61 CHAPTER 5: Demographic Characteristics of REALTORS The typical REALTOR is a 56-year-old white female who attended college and is a homeowner. While the median profile has not changed, REALTORS come from a variety of demographic groups and career backgrounds. Most often, their previous career was in management, business or finance (19 percent) or in the sales or retail sector (15 percent). REALTORS often reflect the many age, ethnic, language, education and income characteristics represented in their local communities. The median gross income of REALTOR households continues to increase. In 2013, the median household income rose to $105,500 from $99,400 in This is up from $94,100 in Household income of members directly correlates to the number of hours worked per week and whether real estate is their primary source of income. Eighty-seven percent of members own their primary residence, while some also owned vacation or commercial properties. 59

62 2014 MEMBER PROFILE Chapter 5: Demographic Characteristics of REALTORS Gender Exhibits 5-1 through 5-3 Fifty-seven percent of all REALTORS are female, unchanged from last year. However, among members who are over 60- years-old, this percentage falls to 52 percent. Among broker licensees, 53 percent are female, compared with 62 percent of sales agent licensees. Among part-time sales agents, 65 percent are female, while 59 percent of full-time sales agents are female. Age Exhibits 5-4 through 5-6 The median age of REALTORS has decreased for the first time since 2007 due to the influx of new, younger members. The typical age declined to 56 from 57. The median age remains elevated from 1999 to 2008 the typical member age was 52. The trend of increased age may be attributed to professionals staying in real estate longer and putting off retirement. Forty percent of REALTORS are more than 60 years old, while only three percent are under 30 years old. Those who function as brokers and managers without selling tend to be the oldest. Prior Full-time Careers of REALTORS Exhibits 5-8 and 5-9 REALTORS enter the profession with a variety of employment experiences. Most often, their previous career was in management, business or finance (19 percent) or in the sales or retail sector (15 percent). Only six percent reported that real estate was their first career. Among those who entered real estate in the last two years, a higher share entered from office/admin support than those with more real estate experience. Those with the most real estate experience, 16 years or more, are most likely to have real estate as their first career. Real Estate as Only Occupation Exhibit 5-10 Real estate is the only occupation for 78 percent of all REALTORS. REALTORS with more experience are most likely to indicate that real estate is their only current occupation. For REALTORS with 16 or more years of experience, 86 percent indicated real estate was their only occupation, compared with 63 percent of REALTORS with two years or less experience. Education Exhibit 5-7 Overall, the level of education among REALTORS exceeds that of the general public. Ninety-three percent of members have some post-secondary education, with 30 percent having completed a bachelor s degree as their highest level of educational attainment. Eight percent of REALTORS had some graduate school education, with 12 percent having completed a graduate degree. Marital Status and Size of Household Exhibits 5-11 and 5-12 The marital status of REALTORS has remained relatively unchanged from last year. Seventy-one percent of REALTORS are married, with 15 percent being divorced, and eight percent being single and never married. The typical REALTOR household has two people. Younger REALTORS more often have larger households; the median household size for REALTORS aged 49 or younger is three. 60

63 National Association of REALTORS Race and Ethnicity, Languages, and Country of Birth Exhibits 5-13 and 5-14, and Exhibits 5-21 and 5-22 Eighty-five percent of REALTORS are white. Hispanics/ Latinos account for six percent of REALTORS, followed by Black/African Americans (four percent) and Asian/Pacific Islanders (four percent). Eighty-five percent of REALTORS report they are fluent only in English, a share that has remained nearly flat since 2003 when the question was introduced. REALTORS under 40 years of age are most likely to be fluent in another language (22 percent). Spanish is the most common second language that members are fluent in. Among all REALTORS, 11 percent were born outside the U.S. Homeownership and Real Estate Investments Exhibits 5-17 and 5-18 A substantial majority of REALTORS (86 percent) own their primary residence. The percentage of REALTORS who own their home differs slightly by age. Members 39 years old and younger had a lower level of homeownership at 67 percent, compared with a homeownership rate of more than 91 percent for REALTORS aged 60 or older. In addition to their primary residences, REALTORS often own other properties. Twelve percent reported that they owned one or more vacation homes, while 39 percent noted that they owned other residential properties for investment. Ten percent own at least one commercial property. Household Income Exhibits 5-15 and 5-16 The median gross income of REALTOR households was $105,500 in 2013 an increase from $99,400 in As experience increases so does the typical REALTOR s gross household income. REALTORS with 16 years or more real estate experience had a median income of $119,000 in Household income of members directly correlates to the number of hours worked per week and whether real estate is their primary source of income. Of those who worked 40 hours or more per week, 66 percent said real estate was their primary source of household income, compared with 22 percent of those who typically worked less than 40 hours per week. Those with more experience in real estate also were more likely than less experienced REALTORS to indicate that real estate is their primary source of household income. Civic Engagement and Community Volunteering Exhibits 5-19 and 5-20 REALTORS understand the importance of voting. Ninetysix percent reported they are registered to vote and 93 percent voted in the last national election, while 80 percent voted in their local election. Seventy percent of members volunteer in their community. Volunteering is most common among members who are aged 40 to

64 2014 MEMBER PROFILE Chapter 5: Demographic Characteristics of REALTORS EXHIBIT 5-1 GENDER OF REALTORS, BY AGE AGE All REALTORS 39 or younger 40 to to or older Male 43% 43% 39% 38% 48% Female EXHIBIT 5-2 GENDER OF REALTORS, BY EXPERIENCE REAL ESTATE EXPERIENCE All REALTORS 2 years or less 3 to 5 years 6 to 15 years 16 years or more All REALTORS Male 43% 37% 45% 42% 44% Female Brokers/Broker Associates Male Female Sales Agents: Work 40+ hours Male Female Sales Agents: Work less than 40 hours Male Female EXHIBIT 5-3 GENDER OF REALTORS, BY FUNCTION All REALTORS LICENSED AS Broker/ Broker Associates Sales Agents (without (with MAIN FUNCTION IN FIRM Associate Broker (without (with sellling) Appraiser Male 43% 47% 38% 69% 56% 40% 21% 57% 38% 71% Female Sales Agent 62

65 National Association of REALTORS EXHIBIT 5-4 AGE OF REALTORS, Under 30 years 4% 4% 5% 5% 5% 5% 4% 4% 3% 2% 2% 3% 30 to 34 years to 39 years to 44 years to 49 years to 54 years to 59 years to 64 years years and over Median age EXHIBIT 5-5 AGE OF REALTORS, BY FUNCTION All REALTORS LICENSED AS Broker/ Broker Associates Sales Agents (without (with MAIN FUNCTION IN FIRM Associate Broker (without (with sellling) Appraiser Under 30 years 3% 1% 4% 3% 1% 3% * 4% 3% 1% 30 to 34 years * to 39 years to 44 years * to 49 years to 54 years to 59 years to 64 years years and over Median age Sales Agent 63

66 2014 MEMBER PROFILE Chapter 5: Demographic Characteristics of REALTORS EXHIBIT 5-6 AGE OF REALTORS, BY REAL ESTATE EXPERIENCE REAL ESTATE EXPERIENCE All REALTORS 2 years or less 3 to 5 years 6 to 15 years 16 years or more Under 30 years 3% 13% 7% 1% * 30 to 34 years * 35 to 39 years to 44 years to 49 years to 54 years to 59 years to 64 years years and over Median age EXHIBIT 5-7 FORMAL EDUCATION OF REALTORS SOME COLLEGE 31% BACHELOR'S DEGREE 30% GRADUATE DEGREE 12% ASSOCIATE'S DEGREE 11% SOME GRADUATE SCHOOL 8% HIGH SCHOOL GRADUATE 7% 64

67 National Association of REALTORS EXHIBIT 5-8 PRIOR FULL-TIME CAREERS OF REALTORS Management/Business/Financial 19% Sales/Retail 15% Office/Admin support 9% Education None, real estate is first career 6% 6% Healthcare 5% Homemaker 4% Construction Computer/Mathematical 3% 3% Manufacturing/Production Government/Protective services Architecture/Engineering Legal Transportation Military 2% 2% 2% 2% 2% 2% Personal care/other services Community/Social services Life/Physical/Social sciences 1% 1% 1% Other 16% 0% 5% 10% 15% 20% 65

68 2014 MEMBER PROFILE Chapter 5: Demographic Characteristics of REALTORS EXHIBIT 5-9 PRIOR FULL-TIME CAREER OF REALTORS, BY REAL ESTATE EXPERIENCE REAL ESTATE EXPERIENCE All REALTORS 2 years or less 3 to 5 years 6 to 15 years 16 years or more Management/Business/Financial 19% 17% 19% 22% 16% Sales/Retail Office/Admin support Education None, real estate is first career Homemaker Healthcare Construction Computer/Mathematical Manufacturing/Production Government/Protective services Architecture/Engineering Legal Transportation Military Personal care/other services 1 1 * 1 1 Community/Social services 1 1 * 1 1 Life/Physical/Social sciences 1 1 * 1 * Other

69 National Association of REALTORS EXHIBIT 5-10 REAL ESTATE IS ONLY OCCUPATION (Percent Yes ) 100% 86% 80% 60% 78% 63% 68% 78% 40% 20% 0% All REALTORS 2 years or less 3 to 5 years 6 to 15 years 16 years or more YEARS OF EXPERIENCE IN REAL ESTATE EXHIBIT 5-11 MARITAL STATUS OF REALTORS MARRIED 71% DIVORCED 15% SINGLE-NEVER MARRIED 8% WIDOWED 4% OTHER 2% 67

70 2014 MEMBER PROFILE Chapter 5: Demographic Characteristics of REALTORS EXHIBIT 5-12 SIZE OF REALTOR HOUSEHOLDS AGE All REALTORS 39 or younger 40 to to or older 1 person 16% 12% 11% 14% 21% 2 persons persons persons or more persons Median EXHIBIT 5-13 RACIAL AND ETHNIC DISTRIBUTION OF REALTORS, BY REAL ESTATE EXPERIENCE (Percentage of Respondents) REAL ESTATE EXPERIENCE All REALTORS 2 years or less 3 to 5 years 6 to 15 years 16 years or more White 85% 81% 83% 81% 92% Hispanic/Latino Black/African American Asian/Pacific Islander American Indian/Eskimo/Aleut Other Note: Respondent could choose more than one racial or ethnic category. EXHIBIT 5-14 RACIAL AND ETHNIC DISTRIBUTION OF REALTORS, BY AGE (Percentage of Respondents) AGE All REALTORS 39 or younger 40 to to or older White 85% 75% 78% 86% 91% Hispanic/Latino Black/African American Asian/Pacific Islander American Indian/Eskimo/Aleut Other Note: Respondent could choose more than one racial or ethnic category. 68

71 National Association of REALTORS EXHIBIT 5-15 GROSS HOUSEHOLD INCOME OF REALTORS, BY REAL ESTATE EXPERIENCE, 2013 LICENSED AS REAL ESTATE EXPERIENCE All REALTORS Broker/ Broker Associates Sales Agents 2 years or less 3 to 5 years 6 to 15 years 16 years or more Less than $10,000 2% 2% 2% 6% 2% 2% 2% $10,000 to $24, $25,000 to $34, $35,000 to $49, $50,000 to $74, $75,000 to $99, $100,000 to $149, $150,000 to $199, $200,000 to $249, $250,000 or more Median $105,500 $115,800 $97,700 $81,500 $95,900 $105,100 $119,000 EXHIBIT 5-16 REAL ESTATE IS PRIMARY SOURCE OF INCOME FOR HOUSEHOLD (Percent Yes ) LICENSED AS REAL ESTATE EXPERIENCE All REALTORS Broker/ Broker Associates Sales Agents 2 years or less 3 to 5 years 6 to 15 years 16 years or more All REALTORS 48% 57% 41% 26% 39% 50% 57% Work less than 40 hours per week Work 40 hours or more per week

72 2014 MEMBER PROFILE Chapter 5: Demographic Characteristics of REALTORS EXHIBIT 5-17 HOMEOWNERSHIP OF REALTORS, BY AGE (Percent Own Primary Residence ) 100% 80% 86% 82% 88% 91% 67% 60% 40% 20% 0% All REALTORS 39 or younger 40 to to or older AGE EXHIBIT 5-18 REAL ESTATE INVESTMENTS OF REALTORS All REALTORS Vacation Homes None 88% One 9 Two 2 Three or more 1 Residential Properties (except primary residence and vacation homes) None 61% One 14 Two 7 Three or more 18 Commercial Properties None 90% One 5 Two 2 Three or more 3 70

73 National Association of REALTORS EXHIBIT 5-19 VOTING PATTERN OF REALTORS (Percent Yes ) Registered to vote 96% Voted in last national election 93 Voted in last local election 80 EXHIBIT 5-20 VOLUNTEERS IN COMMUNITY 100% 80% 70% 66% 71% 72% 69% 60% 40% 20% 0% All REALTORS 39 or younger 40 to to or older AGE EXHIBIT 5-21 LANGUAGE FLUENCY OF REALTORS AGE All REALTORS 39 or younger 40 to to or older Fluent only in English 85% 78% 82% 86% 87% Fluent in other languages Spanish 41% 53% 46% 42% 32% Other language EXHIBIT 5-22 COUNTRY OF BIRTH OF REALTORS AGE All REALTORS 39 or younger 40 to to or older U.S. 89% 87% 85% 88% 92% Outside U.S

74 2014 MEMBER PROFILE Methodol gy In March 2014, NAR mailed and ed a 91 question survey to a random sample of 56,254 REALTORS. An identical questionnaire was also distributed via only to an additional 39,086 members. Using this method, a total of 6,462 responses were received, including 2,393 via hard copy mail survey and 4,069 via the Web-based survey. After accounting for undeliverable questionnaires, the survey had an adjusted response rate of 6.8 percent. Survey responses were weighted to be representative of state-level NAR membership. Information about compensation, earnings, sales volume and number of transactions is characteristic of calendar year 2013, while all other data are representative of member characteristics in early The NATIONAL ASSOCIATION OF REALTORS is committed to equal opportunity in the real estate industry. In accordance with this commitment, racial and ethnic information was collected and is included in this report. Where relevant, REALTOR information is divided into subgroups based on the license held by members of NAR: a broker, broker-associate or sales agent license. The term broker refers to REALTORS holding a broker or broker associate license unless otherwise noted. In some cases, information is presented by REALTORS main function within their firm or their real estate specialty regardless of the type of license held. The primary measure of central tendency used throughout this report is the median, the middle point in the distribution of responses to a particular question or, equivalently, the point at which half of the responses are above and below a particular value. Data may not be comparable to previous Member Profile publications due to changes in questionnaire design. 72