The National Association of Realtors(r) recently reported that its membership base in December 2011 is 1,009,940 members. Of course, this is much lower than the peak of 1.37 million members in October 2006. It seems that many Realtors(r) are holding onto their membership (and therefore, real estate license) despite the state of the housing market. This is quite interesting when you look at the overall compensation that can be generated per agent using some broad market statistics on a national level.
NAR Research reported that existing-home sales finished 2011 at 4.97 million units at an estimated median price of $165,200. Assuming a full commission of 6% is paid on each sale then the total pool of commissions to be split by the group is $49,262,640,000 or the equivalent of $48,777.79 per Realtor(r). Of course, we know that their are tens of thousands of real estate agents that are licensed to sell real estate that are not members of NAR so this gross commission figure gets reduced quite substantially. Further, we all know getting sellers to pay a full 6% commission on a listing is a hurdle that can seem like climbing Mt. Everest on a regular basis. Banks have certainly figured out that they don't need to pay REO brokers their half of the 6%. Most banks are paying 2% or less to agents handling foreclosed homes which happens to make up a good percentage of the total existing-home sales annually.
Oh, and let's not forget that a portion of those commissions have to be split between the real estate agent and the brokerage house that he/she works for. Granted most agents will not work for much less than an 80/20 split in their favor but that's another 20% that comes right off the top. Then you factor in expenses of the trade such a marketing, dues, gas/vehicle expenses and that number shrinks once again. It's not surprising to me when I hear statistics that the average real estate agent earns less than $25,000 or so per year in this industry. I think that number is right about what the average retail worker makes per year. One could hardly say this industry has the pay grade of a true professional!
