Most Realtors Bank Meager Bucks | Print |  E-mail
Thursday, 08 November 2012 16:51

By Carl Medford, CRS

Special to the Times

In the world of classic stereotypes, Realtors drive fancy cars, have flashy jewelry and own mini-palaces with pools the size of Lake Tahoe.

While it’s true some Realtors do drive expensive autos, the majority, self-included, show up in Hondas and the like. In the real world, the facts are far from the perceived “Real Estate Reality” when it comes to what Realtors bring home in the way of a paycheck.

Here are some real numbers to digest:

• There are currently 8,247 active Realtors in Alameda County.

• Of these, 84.95 percent have sold 6 or less homes in the past 12 months.

• The average Central County sales price for September, 2012, was $336,000.

• Since listing agents split commissions with the buyer’s agent, we’ll use 3 percent as the commission for each side of the transaction. This means each agent’s brokerage gets 3 percent (in reality, some commissions are less).

• All agents work under a broker with whom they split commissions. Agents selling 6 or less homes a year are lucky to receive 70 percent of any commission check (many agent splits are actually less) — this means a typical commission check of $7,056.

• 6 transactions at $7,056 each = $42,336… a year.

• Of the 8,247 Realtors in Alameda County, however, only 291 have sold 6 homes in the past 12 months; 339 sold 5, averaging $32,280; 447 sold 4, averaging $28,224; and the remaining 5,929 agents sold 3 or less, for a maximum average of… $21,168! Or less. In most cases, FAR less.

• It’s expensive to be a Realtor; agents must pay their own auto expenses, E&O insurance, desk and technology fees, transaction coordination fees, licensing and MLS fees, and much, much more.

On the other end of the scale, out of 8,247 Realtors, only 421 (5.1 percent) sold 1-2/month. At 2-3/month? You’ve dwindled down to 97 (1.18 percent). Only 33 agents sold 3-4/month (0.40 percent), while an astonishingly meager 24 (0.29 percent) averaged 4 or more per month.

In reality, the idea that Realtors are bringing home “big bucks” is mostly confined to Hollywood’s perceptions. While some make a great living, the real number of successful agents is very small. Most are surviving on either their significant other’s income or another job of some kind.

Bottom line? The real numbers make it doubly insulting when sellers try knocking down listing commissions and buyers try to score a piece of the commission pie. In most cases, there’s simply not enough pie to go around.

Carl Medford is a licensed Realtor with Prudential California Realty in Castro Valley and a licensed general contractor. This article is sponsored by the Central County Marketing Association at www.ccmgtoday.com.

 

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