Tuesday, February 17, 2009

Did you know...

There are over 107,000 licensed real estate agents in Arizona? The estimated population in 2006 (the latest I could find) was 6,166,318. Which means that for every agent, there are about 57 possible clients/customers. I couldn't tell you how many of those people rent their homes, but just based on the economics of owning a home, I would say at least half. Probably more. So let's just cut that number by slightly more than half to a round number of 28. Now, add to that information the fact that 10% of the agents sell 90% of the houses. So, of those 28 possible clients, approximately 25 of them are going to be sold by each of the top producing agents. Leaving 3 clients for each of the bottom producers. Assuming the median price of a home in Phoenix is currently just under $200,000 (and falling), and that there is a negotiated commission of 6%, that gives us a starting commission of $12,000. Sounds good, no? Now cut that in half. Because they need to pay the other broker's agent. So down to $6,000. Still, not so bad. Except, now they need to hand the money over to their broker. Their broker might be one that takes 50% and doesn't charge them any fees for working there. Or they may charge them less of a percentage, but take a bunch of fees. But let's assume, for easy math, that they do a 50/50 split with no fees. That leaves our agent with $3,000, per house. For the three houses they're going to sell. Which means they just made $9,000. For the year. And by the way, this also assumes that all the potential clients actually want to sell or buy a house, which of course is highly unlikely. But guess what? I'm not getting licensed to make big bucks. I'm getting licensed because I love real estate and I wanted to be a part of a community that has the ability to make a difference in people's lives. I'm not the best salesperson out there, far from it. But I love real estate and I'm pretty good with people so I'm thinking if I put those two things together, I'll be successful in life. And maybe, just maybe, the money will follow.