Search Google all you want, I assure you – you will never find the answer to that question.
So many people ask me questions on this subject, all the time. And even agents themselves want to know!
I don’t know what conclusions you can draw from the data, but I do know that TREB doesn’t make this available.
So I will. What the hell…
Like I said – what conclusions can we draw?
Good or bad?
I’m scratching my head, trying to think of how the public might react to this data, both optimistically, and pessimistically.
The average person might want to know, “How many licensed Realtors complete zero transactions per year?” It’s a great question. Would TREB provide an answer, if asked? What is the upside? What is the downside? How can you create an argument either way?
If 10% of Realtors perform zero transactions, is that better than if it were 5%, or worse? What kind of argument are we making?
So I’m going to provide you with all the data today, and answers to just about all the questions you can ask.
First, the disclaimers:
1) This data is not coming from TREB. It’s coming from a third-party company that tracks the data.
2) The third-party only tracks agents that have performed a transaction (sales, not leases) in the past 12 months, and does not include commercial, farm, exclusives, etc.
3) There were 50,010 Realtors licensed through TREB at the end of December, 2017.
4) The sales data is for the entirety of 2017.
5) These statistics are not 100% accurate. I have looked at the transactions they have listed for me, personally, and I find it to be 100% accurate. But this data has to be taken with a rounding error.
There are so many questions to ask here, I’m like a kid on Christmas; I almost don’t know where to begin.
So we know that there are 50,000 licensed Realtors at TREB, I guess the first question that I would want to know is, “How many licensed agents performed zero transactions in 2017?”
Yes, that’s the first question on my mind.
Call me a sadist, but I just really want to know
Any guesses, folks?
Any ideas on the number, or percentages?
Wanna throw out a number before you scroll down?
Here, I’ll help you avoid the temptation to move along without guessing. Just try – out of 50,000, how many did zero transactions in 2017?
How about 17,313 agents. Out of 50,000.
Does that sound high or low?
That’s 34.6% of all Realtors licensed through TREB, who did zero transactions in 2017.
If I were on the outside looking in, I’d think that number is high.
That’s almost a third! And while we know that not everybody who has a real estate license is active, surely you’d assume that your friend Wally, who is a full-time bartender but has his real estate license just in case any of you want to buy a condo, represents a lot lower percentage of the gang!
Okay, so how many agents did one transaction in 2017?
Which means that the number of licensed Realtors who did one or fewer transactions in 2017 is………………..51.3%.
Is that shocking, or what?
HALF of all the licensed agents by the Toronto Real Estate Board are doing one or fewer transactions. It just boggles the mind.
Now I could go on to two, then three, then four, and so on, but I think you get the idea at the lower end.
How about the idea of, say, “enough money to make a living?”
I suppose we need to define “a living,” but since we know the $15/hour minimum wage will bring the minimum salary up to $30,000 per year ($15 x 40 hours, x 50 weeks, or more if you’re paid for vacation), then clearly we can’t look at $30,000, or anything close to it.
I’m looking for at least a “decent” living.
Let’s look at the number of licensed Realtors that perform four or more transactions per year. Why four? Well, I have a theory that four transactions is the magic number to make “a decent living” in real estate.
So first, let me test that theory.
I want to know the “dollar volume of sales” for your average agent doing 4 transactions in 2017.
What does that mean? If you did sales of $1,100,000, $425,000, $725,000, and $1,981,000, your dollar volume of sales would be $4,231,000.
There were 2,738 agents who did four sales in 2017, so I’ve taken a random sample of 500 of those agents, looking for the average dollar volume of sales.
From my random sample, the average is $2,985,716.
Let’s assume a 2.5% commission on these sales.
That would mean the average agent who does 4 transactions per year is making a gross commission of $74,642.90.
That’s not chump change, am I right? It’s far more than the average Torontonian makes in a year!
But consider that this is the gross commission, and the agent still needs to split with their brokerage.
Brokerage splits vary across the city, and across different business models.
When I started with Bosley Real Estate in 2004, I was on a 60/40 commission split, which very few, if any (including Bosley) brokerages still have today.
On the other hand, there are many “virtual brokerages” that offer a 100/0 split, with a per-transaction fee, desk fee, and/or other fees.
So while most agents at full-service brokerages, who gross $74,642.90 per year, would find themselves on a 70/30 split, let’s factor in the virtual models, and call this an 80/20 split.
With that average agent paying a 20% split to their brokerage, the $74,642.90 ends up putting $59,714.32 into their pocket.
Still a fantastic living, right?
But there are fees! Lots of fees! The Toronto Real Estate Board, Canadian Real Estate Association, Real Estate Council of Ontario, and so forth. Call it perhaps $4,000.
Now the agent is down to $55,714.32, but still a great living.
What about all the courses? There are several courses you need to take to get licensed, then some more “articling” courses in the two years after you obtain your license, then these cash-grab courses they call “continuing education.” While most of the money is paid up front, I’d say if you average out the first five years, you’re $1,500 per year.
Now we’re down to $54,214.32
What about expenses?
Maybe these agents doing four transactions per year aren’t buying billboards, but they sure are spending!
You pay for everything in real estate, no matter the brokerage. At $1.50 per feature sheet, that adds up over the course of a year!
Even agents doing four transactions per year have to be spending at least $10,000 per year. Many agents spend that per week, but let’s be conservative here.
So now the $74,642.90 is down to $44,214.32.
And I’m going ignore things like car leases and insurance, because while those are legitimate write-offs in the business, if this person wasn’t in real estate, they’d probably stil have a car and car insurance. Same goes for a host of other items that I could claim to bring that $44K number lower, but for now, let’s say we’re done.
That’s a lot more than a LOT of people make!
But it doesn’t make you rich, and it’s nowhere close to the $77,642.90 gross amount that agents doing 4 transactions per year say they do.
So now the big reveal: how many agents are doing MORE than four transactions per year?
One in four agents licensed by the Toronto Real Estate Board is netting more than $44,000 per year.
Or if you’re an aspiring Realtor, you can say, “I have a one-in-four chance of making more than $44,000 per year; do I like those odds?”
I had a lot of fun with these numbers, folks.
How many agents do you think do ten or more transactions in a year?
So perhaps now it’s time for me to provide the bigger reveal, and show you the breakdown:
I showed this to a few folks at my office, and two of them said, “You’re looking at greater than or equal to,” ie five or more transactions. I was told I should look at less than, since it might be more interesting to those who choose to see the cup half empty.
And you know? I thought this was a neat way of looking at things to.
So here’s the data in a different light:
“Less than 1” is a nice way of saying, “Zero.”
For those curious about the numbers closer to the top, I can’t reveal names.
But if you want to know which “agent” did the most deals apparently, one guy did 603 sales.
But at the same time, not really.
A lot of agents have a “team” working for them, and even though a team-member completes a transaction, the sale is still reported under that one agent’s name.
It is physically impossible for one agent to complete 100 deals or more without any help. So the 603 deals at the top is silly.
Next five down the list?
Again, those are teams masquerading as agents.
39 agents are credited with having completed 100+ transactions. The reason I didn’t have a line for “100+” on my chart above is because, as I mentioned, these numbers aren’t truly indicative of how many deals these agents are doing. But nevertheless, that’s impressive!
So just as we read “Choose Your Own Adventure” books as kids, you can feel free to draw your own conclusions on the data above…
I have been informed that there were exactly 50,010 agents licensed by TREB at the end of December, 2017. So I am editing the above blog post, from the 48,000 Realtors I had previously estimated, to reflect this.
For the cynics, this makes the data look worse, not better, so I assure you this change is in the interest of accuracy.
The changes are reflected in the two charts provided, as well as point #3 in the discalimer.