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There are 1.5 million Realtors nationwide, but less than a third of them are actually doing deals.
That’s according to Joe Rath, senior director of brokerage operations and head of industry relations at Redfin, who spoke at Inman Connect New York on Friday.
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In a session called “Inside the Numbers: What New Data Tells Us About What’s Really Going on in Real Estate,” Rath noted that Redfin’s annual survey polls agents from across brokerages, but only those who are actually closing deals.
“Thirty percent of agents do all the business,” Rath said.
“Seventy-one percent of agents did not close a transaction last year.”
Not all Realtors are in the business of closing transactions, “so that number can be a little bit misleading,” he added, but he was highlighting it to stress that Redfin’s survey represents the views of agents actually doing deals.
That survey found that half of those active agents expect more home sales this year and more than half expect home prices to rise in their area.
Rath noted that Redfin had partnered with Inman Intel for his presentation and that Inman Intel had also found that agent outlook is improving in the sense that they believe their buyer pipelines have gotten better than they were 12 months ago.
Regarding what survey respondents said they liked about being a real estate agent, entrepreneurial independence — “being your own boss” — and helping people were at the top of the list.
Still, the share of respondents who would recommend being a real estate agent hit an all-time low in 2024, according to Rath.
“It could just correlate with the market conditions, and it’s been a tough year,” Rath said.
Fewer agents are entering the industry, which means experience levels are rising — 83 percent of agents have more than three years of experience — and agent productivity is up: 72 percent of respondents did five or more deals last year.
That means agent incomes have also gone up, with 30 percent of agents making $100,000 or more last year. Still, 42 percent of agents made less than $50,000.
“That’s a problem,” Rath said. “It shouldn’t be so difficult to be a real estate agent.”
Respondents’ top complaint about being an agent was unpredictable income, followed by the difficulty of finding customers. Relatedly, when asked the most important factors in choosing a brokerage, 78 percent said commission split and/or fees.
“That’s what Redfin Next is all about,” Rath said.
“That’s why we had to change our pay structure.”
But Redfin also asked respondents whether they would prefer the brokerage invest less in tech and training and marketing in order to improve splits, and 55 percent said they would, while 45 percent said the opposite — they wanted more tech and training, even if it made their split slightly worse.
Outside of the brokerage, home affordability and inventory topped the list of greatest challenges for agents in the next five years, while issues with home insurance have grown.
“Forty-seven percent of agents are actually reporting significantly more issues with home insurance than the year prior,” Rath said, especially in California and Florida.
“We’re hearing more and more from customers that are actually just changing the way they search for homes because they are having to think about storms, heat, droughts, flooding,” Rath said.
Significant shares of respondents also believe declining commissions (42 percent) and class-action or Department of Justice (DOJ) lawsuits (38 percent) will be a challenge in the next five years.
Still, 57 percent of respondents said their business hadn’t seen much change as a result of the National Association of Realtors’ antitrust settlement last year. Another 38 percent said their business had been negatively impacted while 5 percent said it had been positively impacted.
Asked whether they had seen any changes in commission negotiation efforts from their clients, 54 percent said that had seen “slightly more” or “far more” negotiation while 34 percent said “about the same.”
“We’re going to see more training on negotiation,” Rath said.
At the same time, nearly half of respondents (45 percent) said most sellers in their area are offering a buyer agent fee upfront, while 22 percent said most sellers are leaving it open-ended and the remaining 33 percent said they were seeing a mix of approaches in their area, depending on seller preference.
Rath noted that Inman Intel’s survey of actual customers had found that 60 percent of active sellers agreed to cover the buyer agent fee upfront while 29 percent said they were willing to offer it in the negotiation.
Perhaps because of this increase in negotiation, 52 percent of Redfin’s survey respondents expect commissions to decline either “modestly” or “significantly” in the next 12 months.
Redfin also polled active agents on their view of NAR and found that 51 percent held a negative view of the trade group in 2024, compared to 19 percent in 2023. Only 25 percent held a positive view of NAR in 2024, compared to 49 percent in 2023.
Active agents’ views of multiple listing services also ticked down in 2024, though not as much, and more than half of respondents still had a favorable view of MLSs: 57 percent, down from 66 percent. Fourteen percent had a negative view, up from 8 percent.
“I think the difference between MLSs and NAR is that agents are worried about the MLSs,” Rath said, noting that 30 percent of respondents thought “erosion of the MLS as a source of inventory” would be a challenge in the next five years.
“They want a central repository of all the listings available in the market. And they know that their customers do, too, because they overwhelmingly recommend marketing in the MLS: 88 percent either completely agree or somewhat agree that they should market listings in the MLS.”
What agents are mixed on is not whether the MLS is in the seller’s best interest but, rather, whether the MLS benefits agents, according to Rath.
Asked whether pocket listings and office exclusives are usually in the best interest of the agent, respondents 44 percent either “somewhat” or “completely” agree, 30 percent neither agree nor disagree, and 26 percent either “somewhat” or “completely” disagree.
“I think that’s the problem, because at the end of the day, don’t you want your agents’ interests aligned with that of your customers?” Rath said.
Email Andrea V. Brambila.
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