Just saw this on Twitter from a statement made by NAR:

The average REALTOR is a 52 year old woman who makes $36,000 a year. #rebcchi

The Annual Income came out almost exactly to the result of my math calculation! Amazing!

Perceptions are often based on what’s “for sale” vs. what’s sold.

I balance my method and checks and balances against what I believe is the case. Do the results look roughly accurate to you?

I did not deduct what an agent pays their broker, as that is an expense of business and I am using gross income before business expenses. Broker, ads, car expenses, dues, license fees, etc… all cost of doing business including the broker’s cut is not taken into consideration.

How about this: NAR says median commission is 5.1% per closed transaction (in recent history they said that as to national figures)

There were 13,000 licensed agents on average in King County in 2008. Let’s say 60% of them work as real estate agents period vs. holding a license for future or referral only purposes.

OK, so we have 5.1% commission on 21,747 closings in 2008 in all categories. Note that some commercial sales will show in this number, but not all. But some of the transactions are duplicated, so maybe the inconsistencies even out. I can’t do stats for more than 10,000, so I have to break it into quarters.

1st quarter 2008 – 5,163 closings – median price $394,000 x 5.1% = I think that’s $103 million. None of my calculators will calculate the 5,163 times $394,000, so I used 394 times 5.1% and then added three zeros to the final answer to get $103 million. Someone double-check me on that.

$103,000,000 divided by 7,800 agents (assuming 60% active) = $13,205 per agent for the 1st quarter.

Let’s do the 4th quarter and rough up the in between quarters.

4th Quarter sales = 4,126 transactions – median $360,950 x 5.1% = $82 million divided by 7,800 agents = $11,000 per agent for the last quarter.

Let’s call that $48,000 per agent for 2008.

Now let’s go to Sally’s numbers and assume 10 of the agents made $150,000 on average (which includes the 3% that made $250,000)

780 made $150,000 = $117,000,000 of the $374,000,000. That leaves $257,000,000 for the remaining 7,020 agents or $36,600 a year for 2008.

Lots of assumptions there, but how does that look Cam? Looks about right to me. You still have some that made $60,000 and some that made nothing in that 60% of active agents, but the majority who made nothing would likely have been wiped out when I decreased the # of total agents by 40%.

If someone knows how many of the 13,000 were keeping up with their mls dues and Supra keybox charges, and finds that to be more or less than 60% (7,800) we can run the numbers again. But I think that takes us a step closer to reality.

I think those numbers were clearly the case in 2005 and 2006, but what about 2008?