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Why Do Some Real Estate Salespeople Earn More Than Others?

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Abstract

This paper explores the reasons why some real estate salespeople earn more than others. Data from a survey of members of the Illinois Association of REALTORS conducted in the spring of 1985 are the basis of the analysis. The central part of the paper analyzes via multivariate regression analysis over twenty factors thought to determine real estate sales success as measured by income from real estate brokerage. The most important findings include: (1) number of hours worked is closely linked to income; (2) income increases substantially with years of experience in the early years of a career (over 20% per year for the first five years), but these increases flatten out for the veteran with more than ten years of experience; (3) no significant differential in earnings is detected between men and women of the same age and with the same education.

Suggested Citation

  • James R. Follain & Terry Lutes & David A. Meier, 1987. "Why Do Some Real Estate Salespeople Earn More Than Others?," Journal of Real Estate Research, American Real Estate Society, vol. 2(1), pages 73-81.
    • Handle: RePEc:jre:issued:v:2:n:1:1987:p:73-81
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    Cited by:

    1. G. Stacy Sirmans & Philip G. Swicegood, 1997. "Determinants of Real Estate Licensee Income," Journal of Real Estate Research, American Real Estate Society, vol. 14(2), pages 137-154.
    2. Daniel T. Winkler & W. Keener Hughen, 2012. "Fringe Benefits Compensation of Real Estate Agents and Brokers," International Real Estate Review, Global Social Science Institute, vol. 15(3), pages 253-281.
    3. Abdullah Yavas, 2001. "Impossibility of a Competitive Equilibrium in the Real Estate Brokerage Industry," Journal of Real Estate Research, American Real Estate Society, vol. 21(3), pages 187-200.
    4. Chun-Chang Lee, 2017. "The Impact of Individual Characteristics and Branch Characteristics on Housing Agent Performance: Heckit model and Hierarchical Linear Modeling," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 9(10), pages 189-199, October.
    5. Marcus T. Allen & Justin D. Benefield & Ronald C. Rutherford, 2023. "Co-Listing Strategies: Better Transaction Outcomes?," The Journal of Real Estate Finance and Economics, Springer, vol. 67(3), pages 517-544, October.
    6. John D. Benjamin & G. Donald Jud & G. Stacy Sirmans, 2000. "Real Estate Brokerage and the Hosting Market: An Annotated Bibliography," Journal of Real Estate Research, American Real Estate Society, vol. 20(1), pages 217-278.
    7. J. Benjamin & P. Chinloy & G. Jud & D. Winkler, 2007. "Do Some People Work Harder than Others? Evidence from Real Estate Brokerage," The Journal of Real Estate Finance and Economics, Springer, vol. 35(1), pages 95-110, July.
    8. G. Martin Izzo & Barry E. Langford, 2008. "Data analysis with ordinal and interval dependent variables: examples from a study of real estate salespeople," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, vol. 1, pages 103-116, December.
    9. John D. Benjamin & G. Donald Jud & G. Stacy Sirmans, 2000. "What Do We Know About Real Estate Brokerage?," Journal of Real Estate Research, American Real Estate Society, vol. 20(1), pages 5-30.
    10. Michael A. Abelson & K. Michele Kacmar & Ellen F. Jackofsky, 1990. "Factors Influencing Real Estate Brokerage Sales Staff Performance," Journal of Real Estate Research, American Real Estate Society, vol. 5(2), pages 265-276.
    11. G Stacy Sirmans & David A. Macpherson, 2001. "Affinity Programs and the Real Estate Brokerage Industry," Journal of Real Estate Research, American Real Estate Society, vol. 22(3), pages 337-352.
    12. James E. Larsen, 1991. "Leading Residential Real Estate Sales Agents and Market Performance," Journal of Real Estate Research, American Real Estate Society, vol. 6(2), pages 241-249.
    13. Glenn E. Crellin & James R. Frew & G. Donald Jud, 1988. "The Earnings of REALTORS: Some Empirical Evidence," Journal of Real Estate Research, American Real Estate Society, vol. 3(2), pages 69-78.
    14. Randy I. Anderson & Hany Guirguis & Geoffrey K. Turnbull, 2018. "Focus or Generalize: Real Estate Agent Effort Allocation and Compensation," International Journal of Business and Economics, School of Management Development, Feng Chia University, Taichung, Taiwan, vol. 17(1), pages 25-42, June.
    15. Randy I. Anderson & James R. Webb, 2000. "The Education of Real Estate Salespeople and the Value of the Firm," Journal of Real Estate Research, American Real Estate Society, vol. 20(1), pages 143-152.
    16. Donald R. Epley, 2001. "US Real Estate Agent Income and Commercial/Investment Activities," Journal of Real Estate Research, American Real Estate Society, vol. 21(3), pages 221-244.
    17. Barry A. Diskin & Dean H. Gatzlaff, 1994. "An Examination of the Earnings of Real Estate Appraisers," Journal of Real Estate Research, American Real Estate Society, vol. 9(4), pages 507-524.
    18. Donald Jud & Daniel T. Winkler, 1999. "A Model of Real Estate Sales as a Career Choice," Journal of Real Estate Research, American Real Estate Society, vol. 18(3), pages 481-490.
    19. G. Stacy Sirmans & Philip G. Swicegood, 2000. "Determining Real Estate Licensee Income," Journal of Real Estate Research, American Real Estate Society, vol. 20(1), pages 189-204.
    20. Richard Martin & Henry Munneke, 2010. "Real Estate Brokerage Earnings: The Role of Choice of Compensation Scheme," The Journal of Real Estate Finance and Economics, Springer, vol. 41(4), pages 369-389, November.
    21. Leonard V. Zumpano & Ken Johnson & Randy I. Anderson, 2007. "Listing Specialization and Residential Real Estate Licensee," Journal of Real Estate Research, American Real Estate Society, vol. 29(1), pages 75-90.

    More about this item

    JEL classification:

    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

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