Top 7 Chilling Statistics on Being a Real Estate Agent

A strong U.S. housing market along with the explosion of the Internet continues to entice thousands of individuals into becoming real estate agents. However, this somewhat glamorous industry where you set your own hours, choose your own market, get to break bread with clients morning, noon and evening and make oodles of money has some very chilling statistics.

Tip #1 -

There are over 2.5 million real estate agents according to the National Association of Realtors (NAR). The competition is tough given that in October 2006, the sales of new one-family houses was at 1,004,000 a 25.4% decline below October of 2005.(Source U.S. Census Bureau & Department of Housing and Urban Development)

Tip #2 -

7% to 10% of all realtors generate 93% to 90% of all transactions. If October 2006 had 1,004,000 sold new homes, then there were only 104,000 homes for the other 2,250,000 real estate agents to sell given the statistic from Tip #1.

Tip #3 -

First year drop out rate ranges from an estimated 40% to 80%.

Tip #4 -

After year three of those who survived the first year, only 10% continue on to year 4. Real estate agents' retention is difficult especially after you read next 3 tips.

Tip #5 -

The average yearly fee to be a member of the local, state and national realtor associations is between $300 to $400. Being a realtor requires a lot of up front cash until that first house is sold.

Tip #6 -

The average profit for a real estate firm was 2.3% of gross revenue in 1996 the last year data was collected according to the NAR. This is still better than the grocery industry that averages a little over 1% profit from gross revenue.

Tip #7 -

Salaries are decreasing even with home prices increasing. Due to additional fees such as referral, affinity or to pay for other costs such as closing or home warranties, research suggests that commission rates have declined 16% between 1991 and 2004.

So if you want an easy job, with great pay, easy selling, then you may wish not to become a realtor. For the real estate industry is not for the faint of heart, but for proven professionals who understand what it takes to become successful in real estate.