Are We Rewarding Slackers?
While looking for some data for a new graph (by the way, does anyone know where I can find the median or average household income per county for each year between, say, 1969 and 2005?), I stumbled upon this US DOJ report -- it ties right in with the previous post regarding that American myth of "idleness and incompetence are sternly punished—but merit gets rewarded":
1.1 million real estate agents in America(1) average only six home sales per year.(2) Each works about forty hours per sale,(3) which amounts to 12% of the work year,(4) or five hours per week. Most of the balance of hours is devoted to getting new business.(5) Brokers receive a median $52,800 income yearly.(6)
The average couple selling the average home will need to work five weeks each — ten weeks total — to pay the commission of the agent who will work only one week on that transaction.(7)
The real estate brokerage profession should be ashamed of its dismal performance.= = =
1 Appendix, page 65, bottom of third column.
2 The Statistical Abstract of the United States, published by the U.S. Census Department, states the number of homes sold and realty agents working each year. These figures are stated in the Appendix at page 4 for the years 1972 to present. Dividing number of homes sold by the number of agents gives the number of homes sold per agent.
3 California Association of Realtors member survey, 2002. The reported figure is per "transaction," but since most transactions involve two sides, the correct figure for hours worked per transaction for all agents would be 40 hours.
4 If a work year is 50 weeks (two weeks off for vacation), then 50 hours times 40 hours per week is 2,000 hours.
5 U.S. Government Accountability Office, Report to the Committee on Financial Services, House of Representatives, Real Estate Brokerage — Factors That May Affect Price Competition, August 2005 (referenced as GAO report).
6 2004 NAR member survey. The median income of a salesperson was $37,600.
7 The 2005 Statistical Abstract reports that the median family income in 1999 was $41,994. A two-member head of household would need to work a total of 4,000 hours to earn that sum, at $11 per hour. The commission a home sold currently is about 5.1%. GAO report, page 10. The median price on a home sold in 2003 was $170,000: 2005 Statistical Abstract, Table 937. Thus, the commission on the home would be $8,670, at 5.1%. At $11 per hour, it would take 788 hours to pay the commission. At 40 hours per week, that's about 20 weeks, or ten weeks for a husband and wife.