Editor’s note: As the real estate boom soars to new levels, pumping money through the industry like blood through a runner’s arteries, real estate agents, title companies, mortgage brokers, lenders and homeowners alike are prospering. In this three-part series, Inman News explores the real estate windfall, digging to find who’s making tons of money in this heated market. (See Part 2: Real estate boom fills mortgage lenders’ coffers and Part 3: Real estate boom pumps up title insurance.)
Wendy Lister, who ranks among the top-producing Realtors for Coldwell Banker, sends orchid plants each year to her special clients. She uses a professional photographer to snap pictures of properties she lists, and she is careful in crafting property descriptions used in advertisements.
Though she has amassed team of seven full-time associates to assist with her large volume of business, Lister still values a personal touch with her clients. “I don’t do any multiple e-mails – I e-mail one-on-one. I won’t let them forget me. I keep in touch,” she said.
A specialist in waterfront and luxury properties in the Seattle, Wash., area, Lister generates about $80 million to $130 million in sales volume each year.
She is one of many real estate over-achievers, and her example of extreme success is testament to the wealth of opportunity that still exists in the industry, which has been flooded with new agents during an unprecedented surge in home prices and home sales.
The housing boom has thrived for over a decade in some regions and is often credited for powering the economy through some lean times. Many real estate professionals have reaped high financial rewards during this run-up.
“Sometimes it astounds me, after 33 years (in the business), I’ll think I’ve reached a peak – and the next year is even higher. I know that won’t go on forever, but I’m enjoying it while it does,” Lister said. “It’s not just the financial reward – it’s the opportunity to know that I’m still in the midst of a great, strong career that is recognized by many as being remarkable.”
Of course, the Seattle region has seen an incredible explosion in population and home prices during the course of her career, but Lister said it takes more than location, location, location and timing to be a top-producing agent. “It’s not just being in the right place at the right time. It’s knowing it and taking advantage of it,” she said. Lister works at the Coldwell Banker Bain Associates office in Bellevue, Wash.
Median gross personal income increased 7.2 percent from 2002-04 among all Realtors, according to a July report in a National Association of Realtors publication.
But for the inexperienced agent, real estate riches can seem a world away even in a booming market. The trade group reported that the median income for all Realtors with five years or less of experience dropped 44.5 percent – from $35,400 to $24,500 – between 2002-04.
And median income decreased 8 percent – from $41,600 to $38,300, among real estate sales agents in that time. This decrease is blamed largely on the “influx of new licensees who typically take years to get up to speed in their earning potential,” according to the Realtor Magazine report.
The association’s membership grew from about 876,195 in 2003 to a current total of about 1.19 million – a 36 percent gain. And association membership has grown about 66 percent since 1997.
The latest report was based on preliminary results from the association’s 2005 Member Profile survey, which is scheduled for release this month. An earlier survey by the association found that the median income of sales agents increased 15 percent from 2000-02, while the median income for brokers dropped 11 percent in that time.
Real estate broker-owners who do not engage in real estate sales also saw income drop about 8 percent from 2002-04, according to the preliminary results from the latest survey. Non-selling broker-owners had a median gross personal income of $79,900 in 2004, down from $86,100 in 2002. But brokerage managers who don’t engage in real estate sales had a median income of $86,000 in 2004, up 26 percent from $68,300 in 2002.
Real estate professionals who have been in the business for five years of less tend to have a much lower income than those who have been in the business for six or more years, the article states. Between 2002-04, the median income of real estate professionals with six to 10 years of experience increased about 19 percent – from $49,500 to $58,700 – the article states.
Those real estate professionals who have been in the business 26 or more years saw their median income jump about 37 percent from 2002-04, from $67,500 to $92,600. For sales associates with 26 or more years of experience, median income was $83,400 in 2004, according to the preliminary survey results. The typical sales volume for a broker or broker associate was $2.2 million in 2004, which equaled the sales volume in 2002. Sales volume, meanwhile, rose from $1.4 million in 2002 to $1.6 million in 2004 for real estate agents.
The National Association of Realtors has also reported on some stellar totals for individuals and teams working in the real estate field. In 2002, for example, the William Donahoe team at Coldwell Banker Bain Assoc. in Bellevue, Wash., had a sales volume of $441 million, completing 1,139 transaction sides. In a real estate transaction there are two sides – a buyer side and a seller side.
That same year, the Allan Domb team of Allan Domb Real Estate in Philadelphia reported a $202.4 million sales volume, which represented 907 transaction sides. The Lillian Montalto team of Lillian Montalto Signature Properties in Andover, Mass., ranked third on the list, with a sales volume of $182.7 million for 260 transaction sides, the association reported.
Lister said specialization is important in the real estate market, and she encourages other agents to find a niche – no matter how small. “Be an expert at something. Let people know you’re an expert and let them know how to find you,” she said. “It could be just farming one neighborhood.”
Olivia Hsu Decker, a luxury property specialist in the San Francisco Bay Area market, rose up among the ranks at Merrill Lynch Realty in the 1980s, and became the company’s top-earning agent in 1987. In 1999, after branching out to form her own company, she sold over $120 million worth of properties. She now works for Decker Bullock, a real estate brokerage in Mill Valley, Calif.
Decker said there is no shortcut to success in the real estate industry. “You just have to be working constantly, which I happen to enjoy doing,” she said. “I love beautiful homes and enjoy meeting wonderful clients. I work an average 16 to 18 hours a day, seven days a week all year-round.”
The best agents seem to weather the real estate market cycles very well, Decker said. “Top agents do well in any markets, strong or weak. And, in fact, top agents do better in weak markets when it’s tougher to sell anything and when it requires more skill and experience to make sells.” In down markets, Decker said she focuses most of her energy on advertisements, mailings, networking and marketing.
She has also amassed a collection of high-profile luxury properties of her own, and has purchased high profile, multimillion-dollar estates in Europe. She said she regrets – given the run-up in California real estate prices since her entry into the real estate industry – that she did not personally invest more in real estate. “I moved to the Tiburon-Belvedere area in 1975 and the prices have nothing but skyrocketed. I wish I had kept every property I sold before. I would be very rich,” she said.
Jerry Mahan, a top-producing sales associate for John L. Scott Real Estate, has touched many aspects of the real estate industry since he started out as an agent 22 years ago. Mahan, who is based out of the company’s office in Puyallup, Wash., has a team that generated about $118.5 million in sales volume in 2004. He specializes in new construction, land sales and residential re-sales, and operates his own development company.
Mahan, who has a marketing background, said, “The goal is to never sit on your laurels. Always get better.” Mahan said agents need to be prepared to handle the real estate market’s changing conditions. “We were fortunate because we had the tools to expand when we needed to. You just can’t make it happen overnight,” he said.
Mahan personally invested millions of dollars in land purchases, which helped him build up a business in land sales and development.
“It’s like gambling – and hopefully you hit it right,” he said.
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