What’s It Like To Be A Boise Real Estate Agent?

Have you ever wondered how much money your real estate agent makes? Or how many deals he or she has really done? Or if he is really that experienced in closing deals? Or any of a hundred other questions that you are actually too polite to ask? I recently downloaded all the sales information for every home sold in Ada and Canyon county during 2010 and did some fairly extensive analysis on the data. This report summarizes some of my research findings. My only disclaimer is that this information is based on information pulled from the Intermountain MLS. To the degree that there are inaccuracies in that information, my findings will also be inaccurate.

First, there were 10,014 home transactions in Ada and Canyon counties (hereafter summarized as Boise) during the year. This includes homes, homes on acreage, town homes, condos, etc.—all homes. It does not include bare land sales. There are 2,328 real estate agents who were listed either as the selling or listing agent for these sales. With an agent on both sides of every transaction (even if it’s the same agent on both sides) that’s an average of 8.6 transactions per Boise real estate agent.

The average home sold for $157,000 in 2010. Assuming an average real estate commission of 3%, 8.6 sales would have grossed the average real estate agent just over $40,000 per year. Of course, if your agent is closing less than one transaction per month, you wouldn’t expect him or her to be making much more than that. Still, $40,000 per year is not a lot of money. Of course, there is no average real estate agent. A few agents are doing most of the work and an overwhelming number of agents are either starving to death or doing something else to make money. Here are some statistics that may be interesting to you if you care much about Boise real estate and its agents. First, over 400 agents had only one sale all year—that’s almost 20% of all Boise agents. In fact, over ½ of all Boise real estate agents were involved in four or fewer transactions. That’s fewer than one closing every three months. That group (the bottom half of Boise real estate agents) averages $11,000 per year in gross commissions. Pretty hard to make a full-time living doing that. Not surprisingly, thousands of agents have dropped out of the business in the past several years.

The Pareto Principle—better known as the 80/20 rule—states that for many events “roughly 80% of the effects come from 20% of the causes.” Does that hold true for real estate agents? Not quite, but close. In Boise, the top 20% of agents account for 60% of the total sales and total real estate sales dollars generated. The other 80% of agents account for about 40% of the transactions.

In contrast to their counterparts, the top 20% of realtors average an annual sales volume of $3.8 million. Again, at an average commission rate of 3%, that’s an annual income of $115,000. These agents average 25 transactions a year. At an average of two closing per month, it’s not hard to believe these agents are fulltime professionals who know their business. Is your real estate agent in the top 20%? Ask him or her. If so, they will have done at least 12 transactions in 2010.

In Boise, most agents represent both buyers and sellers. However, most tend to favor either one or the other. Here are some interesting facts about listing agents—the agents representing the sellers:

• Nearly 900 agents did not represent a single seller in 2010. (That’s almost 40%.) If you simply pick a real estate agent out of the phone book to list your home, you have almost a 50/50 chance of selecting an agent that did not sell a single home in all of 2010.
• The average agent represents four sellers per year.
• Only 167 agents (7%) represented more than 10 sellers in 2010.
• Six agents sold over 100 homes in Boise—every one of those agents represents either a bank or a builder. (Future analysis will break subcategories of listing agents into bank representatives and homeowner representatives.)

Agents in Boise represented an average of four closed “buy-side” transactions in 2010.

• Nearly 700 (30%) of the agents in Boise represented one or fewer buyers in transaction that closed in 2010.
• Only 26 (1%) of the agents represented more than 20 buyers in 2010.
In summary, there are a lot of real estate agents in Boise who—frankly—have very little experience selling real estate in Boise. It would behoove the wise buyer or seller to find out about your real estate agent before choosing him or her to buy or sell your home. Although many agents are fully licensed and legally qualified to help you buy or sell your home, only a small fraction actually have any real experience doing so.

By: Todd McCauley

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Todd McCauley is the owner / agent for Eagle Rock Properties, a full service real estate company based in Eagle, Idaho. He is one of only 14 real estate agents (of over 2300 in Boise) to represent more than 10 sellers and more than 20 buyers in 2010.