I know where some of those Reno area mortgage lenders are …in therapy. Talked to a therapist last week who said he’s had an increase of former mortgage lenders, etc. who are dealing with depression and are talking about how they falsified home loan apps, etc.

Must be a tough row to hoe when someone knows they were part of the financial debacle that has impacted wallets worldwide.

The more interesting question is: how many of those 3,000 plus active licensed people are actually working full time selling, or trying to sell, real estate?

It simply cannot be the case that all 3,000 are really still in the business, because if they are, most of them must be starving to death. 3,000 plus licensees dividing up about 230 sales a month? There is no way 3,000 people can make a living dividing up 230 sales or so every month.

NVMojo,
An interesting bit of info. Thanks for sharing. In today’s post I list those businesses that are actually benefiting from this market/climate. Perhaps I should add therapists to the list.

Dave, Thanks for the comment.

Lindie,
Yes, that is indeed an interesting question. The NAR reports that the average REALTOR®’s commission income amounts to only $23,000 per year. How do Reno-Sparks REALTORS®’ incomes compare? Let’s do the numbers (I’ll use October’s data because that’s the month where I have the most complete data available):

According to recent Washoe County Assessor’s data, October’s sales consisted of 386 resales county-wide. That’s 772 transaction sides (one Buyer’s agent and one Listing agent). There were also 235 new home sales recorded for the same period. However, we can’t assume that all of these new home sales involved an agent. In fact, I’m guessing half would be a generous estimate. So, for this example, let’s add another 118 buy-side transactions. That’s gives us 890 transaction sides for the month of October. As we saw in my post, the NRED reported 3,176 Active agents for October. That’s .28 transaction sides per agent for October. For this example, let’s simply multiply that number by twelve to get an annual estimate. We now have 3.36 transaction sides per Washoe County agent for 2007. For the sake of discussion, let’s use a 3 percent commission for each of those transactions. Last week I posted the median sales price for October was $287,000. That would amount to $8,610 commission per sale per side, or an annual gross income to the broker of $28,953. I say “to the broker” because, as you know, the broker receives the commission, and then divides it with the agent according to a pre-arranged “split”. This split can vary greatly depending on the brokerage and a variety of factors (i.e. experience of the agent, the agent’s production volume, office expenses, etc.) Let’s just say I have heard splits ranging from 50-50 to 90-10, and everything in between. Again, for the purpose of this example, let’s choose a commission split in the middle of the range, say 70%. That gives us an annual income of $20,267 per Washoe County agent.

You hypothesize “most of them must be starving to death”. I can’t speak to that but the U.S. Census Bureau’s poverty threshold for 2006 was an income of $20,614 for a four-person household.

Note: I’ll include this analysis in today’s post. So, if a thread develops it may appear in today’s post rather than with this thread. Thanks for the question.

Josh, Thanks for your analysis. I had already completed mine prior to seeing your post. And, as you allude to, the 80-20 rule applies to RE, as well. 20% of the agents perform 80% of the transactions.

For an investment opportunity that is supposed to be better than investing in the stock market and other options, it’s sad that real estate investing is getting such a bad rep.