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common in-house service is business brokerage, listing services, comparative market analysis,
followed by relocation services, and home electronic contracts/forms, and e-signatures.
improvement. Among firms with four or more
offices, 48 percent offer relocation services, 43 The most common benefit that firms offer to
independent contractors, licensees, and agents
percent offer business brokerage, 22 percent
offer title or escrow services in house, and 20 is errors and omissions/liability insurance at 37
percent offer mortgage lending. The typical firm percent. However, many share the cost of the
insurance with their employees. Only three
makes less than one percent of their net
revenue from ancillary services. However, those percent of firms offer their independent
with four or more offices typically make five contractors, licensees, and agents health
insurance and in most cases the employee pays
percent of their net revenue from these
for the benefit. Among salaried licensees and
services.
agents, administrative staff, and senior
Firms typically had 30 percent of their customer management there are a larger share of firms
inquiries from past client referrals, 30 percent who pay for errors and omissions/liability
from repeat business from past clients, and 10 insurance, vacation/sick days, and health
percent from their website, 10 percent through insurance.
social media, and one percent through open
houses. Firms typically had 35 percent of their Forty-three percent of firms reported they are
actively recruiting sales agents in 2016, down
sales volume from past client referrals, 30
percent from repeat business from past clients, from 47 percent in 2016. This is more common
and 10 percent from their website, and five among residential firms (49 percent) than
commercial firms (29 percent) and more
percent through social media. Firms report their
current competition is most likely to come from common among firms with four offices or
traditional brick and mortar firms, followed by more (84 percent) than firms with one office
(36 percent). Eighty-six percent of firms
non-traditional market participants, and virtual
firms. reported the reason for recruitment is growth
in primary business followed by the desire for
The most common feature on firms websites younger agents at 34 percent. This is consistent
are property listings, agent/staff profiles, links for residential and commercial firms.
to social media accounts, customer Commercial firms are slightly more likely to
reviews/testimonials, mortgage/financial recruit to expand into new markets and into
calculators, information about the home buying new lines of business or specialty areas. Larger
and selling process, and community firms are much more likely to recruit for the
information/demographics. Firms provide or desire for younger agents and to replace agents
encourage use of specific software. The most who are leaving the firm.
common software that is provided or
Sixty percent of firms expect profitability (net
encouraged to use by agents/brokers is multiple
income) from all real estate activities to
2017 Profile of Real Estate Firms
increase in the next year, down from 64 percent concerned with the recruitment of Gen Y and
in 2016. Residential real estate firms are more Gen X into the industry at 58 percent and Baby
optimistic as 62 percent expect profitability to Boomers retiring at 49 percent.
improve, as well as large firms with three
Thirty-eight percent of all firms said they have
offices78 percent expect profitability to
improve. an exit plan for when they decide to retire or
exit the real estate industry. Twenty-three
Fifty percent of firms expect competition to percent said they do have an exit plan on
increase in the next year (mid-2017 to mid- retiring and 19 said they do not plan to leave
2018) from non-traditional market participants, the real estate business. Twenty-four percent of
up from 43 percent in 2016. Fifty percent of residential firms do not have an exit plan
firms expect competition during the same time compared to only 25 percent of commercial
period to increase from virtual firms (up from firms. Larger firms are more likely to have an
47 percent in 2016), while only 15 percent exit plan in place.
expect competition will increase from
traditional brick and mortar firms. Fifty-one percent of firms have no internal
family relationships compared to six percent
Keeping up with technology, maintaining where everyone is related in a family-owned
sufficient inventory, and competition from and operated firm. Forty-two percent of firms
nontraditional market participants are among have some family relationship. Residential firms
the biggest challenges sited for firms in the next are more likely to have some family
two years. Commercial firms are more likely relationships and commercial firms were
than residential firms to cite local or regional slightly more likely to have no family
economic conditions, while residential firms are relationships. Sixty-one percent of firms who
more likely to site recruiting younger agents, have a family relationship at the firm cited a
competition from non-traditional market spouse or partner family relationships and 55
participants, and agent retention. percent cited a parent-child relationship.
When firms are asked to predict the effect of Eighty percent of firms encourage their agents
generations on the industry for the next two to volunteer in the local community, 43 percent
years, the most common concern was Gen Ys at the local association of REALTORS, 25
ability to buy a home due to stagnant wage percent of firms encourage agents to volunteer
growth, a slow job market, and their debt to at their state association of REALTORS and 18
income ratios52 percent of firms cited this as percent encourage volunteering at the National
a concern, up from 48 percent in 2016. This was Association of REALTORS. Ninety-four percent
followed by the recruitment of Gen Y and Gen X of firms with four or more offices encourage
into the real estate profession and Gen Ys view their agents to volunteer in the local community
of homeownership, as the sharing generation. and 77 percent encourage involvement at the
Firms with four or more offices were most local association of REALTORS.
CHARACTERISTICS OF REAL ESTATE FIRMS
Exhibit 1-1
YEARS IN REAL ESTATE BUSINESS
(Percentage Distribution)
8 to 10 years
11%
11 to 14 years
11%
Exhibit 1-2
YEARS IN REAL ESTATE BUSINESS
(Percentage Distribution)
YEARS
All FirmsIN REAL ESTATE
Residential FirmsBUSINESS Median (years):
Commercial Firms
One year or less 7% (Percentage Distribution)
8% 4% Firms: 15
All
2 to 3 years 8% 9% 5%
4 to 5 years 7% 7%
Residential
8%
Firms: 14
6 to 7 years 6% 6% Commercial
3% Firms: 18
70%
8 to 10 years 11% 11% 10%
11 to 14 years 11% 11% 8% 63%
15 years or more
60% 50% 48% 63%
Median (years) 15 14 18
50%
50% 48%
40%
30%
20%
11% 11% 10% 11% 11%
8% 8% 9%
10% 7% 7% 7% 8% 6% 6% 8%
4% 5%
3%
%
One year or 2 to 3 years 4 to 5 years 6 to 7 years 8 to 10 years 11 to 14 years 15 years or
less more
All Firms Residential Firms Commercial Firms
Exhibit 1-3
NUMBER OF OFFICES
(Percentage Distribution)
All Firms
1 office
NUMBER
79%
OF OFFICES
2 offices (Percentage
8 Distribution)
3 offices 4 or more offices 3
4 or more offices 10% 10
3 offices
3%
2 offices
8%
1 office
79%
Exhibit 1-4
NUMBER OF OFFICES
(Percentage Distribution)
70%
60%
50%
40%
30%
20%
9% 10% 10% 10%
10% 8%
4% 5%
3% 3%
%
1 office 2 offices 3 offices 4 or more offices
All Firms Residential Firms Commercial Firms
Exhibit 1-5
OFFICE OPENINGS AND CLOSINGS
(Medians)
Exhibit 1-6
CHANGE IN MERGERS/ACQUISITIONS FOR FIRM FROM 2006-2011 TO 2012-2017
(Percentage Distribution)
Increased
CHANGE INAllMERGERS/ACQUISITIONS
Firms
9%
FOR FIRM FROM
Decreased 2006-2011
3 TO 2012-2017
Stayed the same 88 (Percentage Distribution)
Increased
9%
Decreased
3%
Exhibit 1-7
SHARE OF INDEPENDENT AND FRANCHISED FIRMS
(Percentage Distribution)
All Firms
SHARE OF company
Independent, non-franchised INDEPENDENT AND84% FRANCHISED FIRMS
Independent, franchised company 13
(Percentage Distribution)
Subsidiary of a national or regional
Subsidiary of a Subsidiary of a
corporation, franchised company 2
national or
Subsidiary of a national or regional national or
regional regional
corporation, non-franchised company 1
corporation, corporation, non-
franchised franchised
company company
2% 1%
Independent,
franchised
company
13%
Independent, non-
franchised
company
83%
Exhibit 1-8
FIRM TYPE BY RESIDENTIAL AND COMMERCIAL FIRMS
(Percentage Distribution)
* 60%
Less than 1 percent
50%
93%
40% 84% 82%
30%
20%
10%
0%
All Firms Residential Firms Commercial Firms
Subsidiary of a national or regional corporation, non-franchised company
Subsidiary of a national or regional corporation, franchised company
Independent, franchised company
Independent, non-franchised company
Exhibit 1-9
FIRM TYPE BY NUMBER OF OFFICES AT FIRM
(Percentage Distribution)
* 60%
Less than 1 percent
50%
90%
40% 84%
65%
30%
55% 53%
20%
10%
0%
All Firms One office Two offices Three offices Four or more offices
Subsidiary of a national or regional corporation, non-franchised company
Subsidiary of a national or regional corporation, franchised company
Independent, franchised company
Exhibit 1-10
LEGAL ORGANIZATION OF REAL ESTATE FIRMS
(Percentage Distribution)
All Firms
LEGAL ORGANIZATION OF REAL ESTATE FIRMS
LLC 36%
Sole proprietorship 26 (Percentage Distribution)
S-Corp 27
C-Corp Partnership
C-Corp 9
9% 2%
Partnership 2
S-Corp
27% LLC
36%
Sole proprietorship
26%
Exhibit 1-11
STAFF AT FIRMS BY NUMBER OF OFFICES AT FIRM
(Medians)
Exhibit 1-12
CHANGE IN STAFF AT FIRMS BY NUMBER OF OFFICES AT FIRM
(Medians)
Exhibit 1-13
FIRM'S PRIMARY SPECIALTY AREA
(Percentage Distribution)
Relocation 1%
Counseling
International
Auction
Exhibit 1-14
PERCENT OF FIRM'S REVENUE FROM PRIMARY REAL ESTATE BUSINESS ACTIVITY
(Percentage Distribution)
50%
40%
30%
20%
12%
10% 4%
1% 1%
%
None 1 to 4 percent 5 to 10 11 to 20 21 thru 50 51 thru 75 76 thru 100
percent percent percent percent percent
Exhibit 1-15
OTHER REAL ESTATE BUSINESS ACTIVITIES AMONG FIRM
(Percent of Respondents)
All Firms
OTHER REAL ESTATE BUSINESS
Commercial Appraisal 2% ACTIVITIES AMONG FIRM
International (Commercial) (Percent of Respondents)
2%
International (Residential) 3%
Auction 4%
Commercial Brokerage 40%
Residential Appraisal 6%
Counseling 10%
ResidentialProperty
Commercial PropertyManagement
Management 11% 36%
Land/Development 15%
Relocation Residential Brokerage 16% 30%
Residential Brokerage 30%
Residential Property Management 36%
Commercial Brokerage Relocation 40% 16%
Land/Development 15%
Counseling 10%
Residential Appraisal 6%
Auction 4%
International (Residential) 3%
International (Commercial) 2%
Commercial Appraisal 2%
Exhibit 1-16
GEOGRAPHIC MARKET AREA OF FIRM
(Percentage Distribution)
All Firms
Metropolitan area or region
GEOGRAPHIC MARKET 57%
AREA OF FIRM
Rural area/Small town (Percentage Distribution)
30
Resort/Recreation area Multi-state area 7
Multi-state area 5% 5 Nationwide
Resort/ Recreation 1%
Nationwide 1
area
7%
Rural area/Small
town Metropolitan area
30% or region
57%
Exhibit 2-1 FIRM'S REAL ESTATE BROKERAGE SALES VOLUME BY RESIDENTIAL AND COMMERCIAL FIRMS, 2016
Exhibit 2-2 FIRM'S REAL ESTATE BROKERAGE SALES VOLUME BY NUMBER OF OFFICES AT FIRM, 2016
Exhibit 2-3 FIRM'S TOTAL REAL ESTATE TRANSACTION SIDES BY RESIDENTIAL AND COMMERCIAL FIRMS, 2016
Exhibit 2-4 FIRM'S TOTAL REAL ESTATE TRANSACTION SIDES BY NUMBER OF OFFICES AT FIRM, 2016
Exhibit 2-5 ANCILLARY SERVICES OFFERED AT FIRMS BY NUMBER OF OFFICES AT FIRM
Exhibit 2-6 ANCILLARY SERVICES OFFERED AT FIRMS TO TYPES OF CLIENTS
Exhibit 2-7 PERCENT OF NET REVENUE OF FIRM MADE ON ANCILLARY SERVICES BY NUMBER OF OFFICES AT FIRM
Exhibit 2-8 PERCENT OF CUSTOMER INQUIRIES GENERATED FROM SOURCES
Exhibit 2-9 PERCENT OF FIRM'S SALES VOLUME WAS GENERATED BY SOURCE
Exhibit 2-10 WHERE DOES CURRENT COMPETITION COME FROM
Exhibit 2-11 FEATURES ON FIRM'S WEBSITE BY RESIDENTIAL AND COMMERICAL FIRMS
Exhibit 2-12 FIRM PROVIDES OR ENCOURAGES AGENT/BROKER USE OF SPECIFIC SOFTWARE, BY RESIDENTIAL AND COMMERCIAL FIRMS
Exhibit 2-13 FIRM PROVIDES OR ENCOURAGES AGENT/BROKER USE OF SPECIFIC SOFTWARE, BY NUMBER OF OFFICES AT FIRM
Exhibit 2-14 EXPERIENCE WITH WIRE FRAUD AT CLOSING, BY RESIDENTIAL AND COMMERCIAL FIRMS
Exhibit 2-15 EXPERIENCE WITH WIRE FRAUD, BY NUMBER OF OFFICES AT FIRM
Exhibit 2-16 WIRE FRAUD EDUCATION TO CLIENTS, BY RESIDENTIAL AND COMMERCIAL FIRMS
Exhibit 2-17 WIRE FRAUD EDUCATION TO CLIENTS, BY NUMBER OF OFFICES AT FIRM
Exhibit 2-18 FIRM HAS SOCIAL MEDIA GUIDELINES FOR AGENTS AND EMPLOYEES, BY RESIDENTIAL AND COMMERCIAL FIRMS
Exhibit 2-19 FIRM HAS SOCIAL MEDIA GUIDELINES FOR AGENTS AND EMPLOYEES, BY NUMBER OF OFFICES AT FIRM
Exhibit 2-20 FIRM USE OF CLOSED COMMUNICATION GROUP, BY RESIDENTIAL AND COMMERCIAL FIRMS
Exhibit 2-21 FIRM USE OF CLOSED COMMUNICATION GROUP, BY NUMBER OF OFFICES AT FIRM
Exhibit 2-22 FIRM VIRTUAL OFFICE, BY RESIDENTIAL AND COMMERCIAL FIRMS
Exhibit 2-23 FIRM VIRTUAL OFFICE, BY NUMBER OF OFFICES AT FIRM
Exhibit 2-1
FIRM'S REAL ESTATE BROKERAGE SALES VOLUME BY RESIDENTIAL AND COMMERCIAL FIRMS, 2016
(Percentage Distribution)
No transactions 4%
4%
Exhibit 2-2
FIRM'S REAL ESTATE BROKERAGE SALES VOLUME BY NUMBER OF OFFICES AT FIRM, 2016
(Percentage Distribution)
No transactions 2%
7%
% 10% 20% 30% 40% 50% 60%
Four or more offices Three offices Two offices One office
Exhibit 2-3
FIRM'S TOTAL REAL ESTATE TRANSACTION SIDES BY RESIDENTIAL AND COMMERCIAL FIRMS, 2016
(Percentage Distribution)
2%
41 to 50
5%
10%
31 to 40
6%
9%
21 to 30
11%
17%
11 to 20
15%
46%
1 to 10
22%
7%
No transactions
6%
Exhibit 2-4
FIRM'S TOTAL REAL ESTATE TRANSACTION SIDES BY NUMBER OF OFFICES AT FIRM, 2016
(Percentage Distribution)
Exhibit 2-5
ANCILLARY SERVICES OFFERED AT FIRMS BY NUMBER OF OFFICES AT FIRM
(Percentage Distribution)
Exhibit 2-6
ANCILLARY SERVICES OFFERED AT FIRMS TO TYPES OF CLIENTS
(Percent of Respondents)
Exhibit 2-7
PERCENT OF NET REVENUE OF FIRM MADE ON ANCILLARY SERVICES BY NUMBER OF OFFICES AT FIRM
(Percentage Distribution)
Three
* Less thanoffices
1 percent 50% 10% 23% 4% 6% % 8%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Exhibit 2-8
PERCENT OF CUSTOMER INQUIRIES GENERATED FROM SOURCES
(Medians)
20%
15%15%
15%
1%
%
Past client referrals Repeat business Website Social Media Open house Other
from past clients
All Firms One office Two offices Three offices Four or more offices
Exhibit 2-9
PERCENT OF FIRM'S SALES VOLUME WAS GENERATED BY SOURCE
(Medians)
5% 5% 5% 5% 5% 5% 5% 5%
1%
Past client referrals Repeat business Website Social Media Open house Other
from past clients
All Firms One office Two offices Three offices Four or more offices
Exhibit 2-10
WHERE DOES CURRENT COMPETITION COME FROM
(Medians)
10%
10% 10% 10% 10% 10% 10% 10%
5% 5%
All Firms One office Two offices Three offices Four or more offices
Traditional brick and mortal firms Non traditional market participants Virtual firms
Exhibit 2-11
FEATURES ON FIRM'S WEBSITE BY RESIDENTIAL AND COMMERICAL FIRMS
(Percent of Respondents)
Exhibit 2-12
FIRM PROVIDES OR ENCOURAGES AGENT/BROKER USE OF SPECIFIC SOFTWARE, BY RESIDENTIAL AND COMMERCIAL FIRMS
(Percent of Respondents)
Exhibit 2-13
FIRM PROVIDES OR ENCOURAGES AGENT/BROKER USE OF SPECIFIC SOFTWARE, BY NUMBER OF OFFICES AT FIRM
(Percent of Respondents)
Exhibit 2-14
EXPERIENCE WITH WIRE FRAUD AT CLOSING, BY RESIDENTIAL AND COMMERCIAL FIRMS
(Percentage Distribution)
Exhibit 2-15
EXPERIENCE WITH WIRE FRAUD, BY NUMBER OF OFFICES AT FIRM
(Percentage Distribution)
Exhibit 2-16
WIRE FRAUD EDUCATION TO CLIENTS, BY RESIDENTIAL AND COMMERCIAL FIRMS
(Percentage Distribution)
Exhibit 2-17
WIRE FRAUD EDUCATION TO CLIENTS, BY NUMBER OF OFFICES AT FIRM
(Percentage Distribution)
Exhibit 2-18
FIRM HAS SOCIAL MEDIA GUIDELINES FOR AGENTS AND EMPLOYEES, BY RESIDENTIAL AND COMMERCIAL FIRMS
(Percentage Distribution)
Exhibit 2-19
FIRM HAS SOCIAL MEDIA GUIDELINES FOR AGENTS AND EMPLOYEES, BY NUMBER OF OFFICES AT FIRM
(Percentage Distribution)
Exhibit 2-20
FIRM USE OF CLOSED COMMUNICATION GROUP, BY RESIDENTIAL AND COMMERCIAL FIRMS
(Percentage Distribution)
Exhibit 2-21
FIRM USE OF CLOSED COMMUNICATION GROUP, BY NUMBER OF OFFICES AT FIRM
(Percentage Distribution)
Exhibit 2-22
FIRM VIRTUAL OFFICE, BY RESIDENTIAL AND COMMERCIAL FIRMS
(Percentage Distribution)
*A firm that does not have a fixed location, and employees may work from home or in different cities and countries.
Exhibit 2-23
FIRM VIRTUAL OFFICE, BY NUMBER OF OFFICES AT FIRM
(Percentage Distribution)
*A firm that does not have a fixed location, and employees may work from home or in different cities and countries.
Exhibit 3-1
BENEFITS RECEIVED BY INDEPENDENT CONTRACTORS/LICENSEES/AGENTS
(Percentage Distribution)
Exhibit 3-2
BENEFITS RECEIVED BY SALARIED LICENSEES/AGENTS
(Percentage Distribution)
Exhibit 3-3
BENEFITS RECEIVED BY ADMINISTRATIVE STAFF
(Percentage Distribution)
Exhibit 3-4
BENEFITS RECEIVED BY SENIOR MANAGEMENT
(Percentage Distribution)
Exhibit 4-1 FIRM ACTIVELY RECRUITING SALES AGENTS IN 2017, BY RESIDENTIAL AND COMMERCIAL FIRMS
Exhibit 4-2 FIRM ACTIVELY RECRUITING SALES AGENTS IN 2017, BY NUMBER OF OFFICES AT FIRM
Exhibit 4-3 REASON FOR FIRM TO ACTIVELY RECRUIT SALES AGENTS, BY RESIDENTIAL AND COMMERCIAL FIRMS
Exhibit 4-4 REASON FOR FIRM TO ACTIVELY RECRUIT SALES AGENTS, BY NUMBER OF OFFICES AT FIRM
EXPECTATION ON PROFITABILITY (NET INCOME) FROM ALL REAL ESTATE ACTIVITIES FROM MID-2017 TO MID-
Exhibit 4-5 2018, BY RESIDENTIAL AND COMMERCIAL FIRMS
EXPECTATION ON PROFITABILITY (NET INCOME) FROM ALL REAL ESTATE ACTIVITIES FROM MID-2017 TO MID-
Exhibit 4-6 2018, BY NUMBER OF OFFICES AT FIRM
Exhibit 4-7 EXPECTATION OF LEVEL OF COMPETITION IN THE NEXT YEAR (MID-2017 TO MID-2018)
Exhibit 4-8 BIGGEST CHALLENGES FACING FIRM IN NEXT TWO YEARS, BY RESIDENTIAL AND COMMERCIAL FIRMS
Exhibit 4-9 BIGGEST CHALLENGES FACING FIRM IN NEXT TWO YEARS, BY NUMBER OF OFFICES AT FIRM
Exhibit 4-10 PREDICTION OF GENERATIONS EFFECT ON THE INDUSTRY IN THE NEXT 2 YEARS, BY RESIDENTIAL AND COMMERCIAL FIRMS
Exhibit 4-11 PREDICTION OF GENERATIONS EFFECT ON THE INDUSTRY IN THE NEXT 2 YEARS, BY NUMBER OF OFFICES AT FIRM
Exhibit 4-12 FIRM EXIT PLAN, BY RESIDENTIAL AND COMMERCIAL FIRMS
Exhibit 4-13 FIRM EXIT PLAN, BY NUMBER OF OFFICES AT FIRM
Exhibit 4-14 FAMILY RELATIONSHIPS IN FIRM, BY RESIDENTIAL AND COMMERCIAL FIRMS
Exhibit 4-15 FAMILY RELATIONSHIPS IN FIRM, BY NUMBER OF OFFICES AT FIRM
Exhibit 4-16 TYPE OF FAMILY RELATIONSHIPS IN FIRM, BY RESIDENTIAL AND COMMERCIAL FIRMS
Exhibit 4-17 TYPE OF FAMILY RELATIONSHIPS IN FIRM, BY NUMBER OF OFFICES AT FIRM
Exhibit 4-18 FIRM ENCOURAGEMENT TO VOLUNTEER, BY RESIDENTIAL AND COMMERCIAL FIRMS
Exhibit 4-19 FIRM ENCOURAGEMENT TO VOLUNTEER, BY NUMBER OF OFFICES AT FIRM
Exhibit 4-1
FIRM ACTIVELY RECRUITING SALES AGENTS IN 2017, BY RESIDENTIAL AND COMMERCIAL FIRMS
(Percentage Distribution)
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Firm is recruiting Firm is not recruiting Not applicable, no sales agents affiliated with firm
Exhibit 4-2
FIRM ACTIVELY RECRUITING SALES AGENTS IN 2017, BY NUMBER OF OFFICES AT FIRM
(Percentage Distribution)
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Firm is recruiting Firm is not recruiting Not applicable, no sales agents affiliated with firm
Exhibit 4-3
REASON FOR FIRM TO ACTIVELY RECRUIT SALES AGENTS, BY RESIDENTIAL AND COMMERCIAL FIRMS
(Percentage Distribution)
34%
Desire for younger agents 36%
34%
36%
Expand into new markets 32%
32%
16%
Replace agents leaving firm 31%
30%
39%
Expand into new lines of business/specialty areas 12%
13%
Exhibit 4-4
REASON FOR FIRM TO ACTIVELY RECRUIT SALES AGENTS, BY NUMBER OF OFFICES AT FIRM
(Percentage Distribution)
%
All Firms One office Two offices Three offices Four or more offices
Growth in primary business Desire for younger agents
Replace agents leaving firm Expand into new markets
Expand into new lines of business/specialty areas
Exhibit 4-5
EXPECTATION ON PROFITABILITY (NET INCOME) FROM ALL REAL ESTATE ACTIVITIES FROM MID-
2017 TO MID-2018, BY RESIDENTIAL AND COMMERCIAL FIRMS
(Percentage Distribution)
EXPECTATION ON PROFITABILITY
All Firms Residential Firms
(NET INCOME) FROM ALL
Commercial Firms
Increase REAL ESTATE60% ACTIVITIES FROM 62% MID-2017 TO56% MID-2018 BY
Stay the same 30% 28% 32%
Decrease
RESIDENTIAL
7%
AND COMMERCIAL
8%
FIRMS8%
(Percentage Distribution)
100%
7% 8% 8%
90%
80% 30% 28% 32%
70%
60%
50%
40%
30% 60% 62% 56%
20%
10%
0%
All Firms Residential Firms Commercial Firms
Exhibit 4-6
EXPECTATION ON PROFITABILITY (NET INCOME) FROM ALL REAL ESTATE ACTIVITIES FROM MID-2017 TO
MID-2018, BY NUMBER OF OFFICES AT FIRM
(Percentage Distribution)
60%
40% 78%
68% 71%
60% 58%
20%
0%
All Firms One office Two offices Three offices Four or more offices
Increase Stay the same Decrease
Exhibit 4-7
EXPECTATION OF LEVEL OF COMPETITION IN THE NEXT YEAR (MID-2017 TO MID-2018)
(Percentage Distribution)
Exhibit 4-8
BIGGEST CHALLENGES FACING FIRM IN NEXT TWO YEARS, BY RESIDENTIAL AND COMMERCIAL FIRMS
(Percent of Respondents)
Exhibit 4-9
BIGGEST CHALLENGES FACING FIRM IN NEXT TWO YEARS, BY NUMBER OF OFFICES AT FIRM
(Percent of Respondents)
Exhibit 4-10
PREDICTION OF GENERATIONS EFFECT ON THE INDUSTRY IN THE NEXT 2 YEARS, BY RESIDENTIAL AND COMMERCIAL
FIRMS
(Percent of Respondents)
Exhibit 4-11
PREDICTION OF GENERATIONS EFFECT ON THE INDUSTRY IN THE NEXT 2 YEARS, BY NUMBER OF OFFICES AT FIRM
(Percent of Respondents)
Exhibit 4-12
FIRM EXIT PLAN, BY RESIDENTIAL AND COMMERCIAL FIRMS
(Percentage Distribution)
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
No, do not plan on leaving real estate business No, do not have an exit plan
Exhibit 4-13
FIRM EXIT PLAN, BY NUMBER OF OFFICES AT FIRM
(Percentage Distribution)
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Yes, have exit plan No, do not plan on leaving real estate business
No, do not have an exit plan No, do not plan on retiring
Exhibit 4-14
FAMILY RELATIONSHIPS IN FIRM, BY RESIDENTIAL AND COMMERCIAL FIRMS
(Percentage Distribution)
FAMILY RELATIONSHIPS
All Firms IN FIRM,Firms
Residential BY RESIDENTIAL AND
Commercial Firms
Yes, everyone is related 6%
COMMERCIAL FIRMS 5% 8%
Yes, relationships exist 42% 43% 34%
(Percentage Distribution)
No, there are no family
Commercial
relationships 8% 34% 51% 51% 58% 58%
Firms
Exhibit 4-15
FAMILY RELATIONSHIPS IN FIRM, BY NUMBER OF OFFICES AT FIRM
(Percentage Distribution)
Four or more 1%
66% 32%
offices
56%
Three offices % 44%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Yes, everyone is related Yes, relationships exist No, there are no family relationships
Exhibit 4-16
TYPE OF FAMILY RELATIONSHIPS IN FIRM, BY RESIDENTIAL AND COMMERCIAL FIRMS
(Percent of Respondents)
50%
44%
40%
30%
Exhibit 4-17
TYPE OF FAMILY RELATIONSHIPS IN FIRM, BY NUMBER OF OFFICES AT FIRM
(Percent of Respondents)
40% 35%
30%
19% 19%
20% 17%
14%
10% 8%
4% 4% 4%
2%
%
All Firms One office Two offices Three offices Four or more offices
Exhibit 4-18
FIRM ENCOURAGEMENT TO VOLUNTEER, BY RESIDENTIAL AND COMMERCIAL FIRMS
(Percent of Respondents)
FIRM ENCOURAGEMENT TO VOLUNTEER, BY RESIDENTIAL
AllAND
Firms COMMERCIAL FIRMS Commercial Firms
Residential Firms
Yes, in the local community (Percent of Respondents)
80% 82% 79%
100%
Yes, at the local association of
REALTORS80% 82% 79%
80% 43% 47% 29%
Yes, at the state association of
REALTORS
60%
25% 47% 26% 17%
Yes, at the 43%
National
40% Association of
REALTORS 25% 26% 29%
18% 17% 18% 19%
19% 14%
17% 14% 18%
20% 15%
No, do not encourage to
volunteer 17% 15% 18%
%
All Firms Residential Firms Commercial Firms
Yes, in the local community
Yes, at the local association of REALTORS
Yes, at the state association of REALTORS
Yes, at the National Association of REALTORS
No, do not encourage to volunteer
Exhibit 4-19
FIRM ENCOURAGEMENT TO VOLUNTEER, BY NUMBER OF OFFICES AT FIRM
(Percent of Respondents)
Methodology
In July 2017, NAR invited a random sample of 165,598 REALTORS who are executives at real estate
firms to fill out an online survey. A total of 6,073 useable responses were received for an overall
response rate of 3.7 percent. The confidence interval at a 95 percent level of confidence is +/-1.23
percent based on the share of real estate executives at real estate firms. All information in this report is
representative of member characteristics in 2017 while sales and lease transaction values and other
statistics where noted are of calendar year 2016.
The primary measure of central tendency used throughout this report is the median the middle point
in the distribution of responses to a particular question or, equivalently, the point at which half of the
responses are above and below a particular value.
2017 Profile of Real Estate Firms
The National Association of REALTORS, The Voice for Real Estate, is Americas largest trade
association, representing 1.2 million members, including NARs institutes, societies and councils,
involved in all aspects of the real estate industry. NAR membership includes brokers, salespeople,
property managers, appraisers, counselors and others engaged in both residential and commercial real
estate.
The term REALTOR is a registered collective membership mark that identifies a real estate professional
who is a member of the National Association of REALTORS and subscribes to its strict Code of Ethics.
Working for Americas property owners, the National Association provides a facility for professional
development, research and exchange of information among its members and to the public and
government for the purpose of preserving the free enterprise system and the right to own real property.
To find out about other products from NARs Research Division, visit https://www.nar.realtor/research-
and-statistics.