2016 Profile of Real Estate Firms

2016 Profile of Real Estate Firms
2016 LEADERSHIP TEAM

President
Tom Salomone
President-Elect
Bill Brown
First Vice President
Elizabeth Mendenhall, ABR, ABRM, CIPS,
CRB,GRI, PMN, EPRO
Treasurer
Michael McGrew, CRB, CRS
Immediate Past President
Chris Polychron, ABR, CIPS, CRS, GRI
Vice President
Michael Labout, GRI, EPRO
Vice President
Sherri Meadows, CIPS, CRB, GRI, PMN
Chief Executive Officer
Dale Stinton, CAE, CPA, CMA, RCE
NAR RESEARCH STAFF

Lawrence Yun, Ph.D.
Chief Economist and Senior Vice President
Ken Fears
Director, Regional Economics and Housing
Finance
George Ratiu
Director, Quantitative and Commercial
Research
Danielle Hale
Managing Director of Housing Statistics
Scholastica Cororaton
Research Economist
Michael Hyman
Research Data Specialist
Hua Zhong
Data Analyst
Nadia Evangelou
Research Economist
Jessica Lautz
Managing Director, Survey Research
and Communications
Meredith Dunn
Research Communications Manager
Brandi Snowden
Research Survey Analyst
Caroline Van Hollen

Manager, Budget Administration and Strategic
Planning
Amanda Riggs
Paul C. Bishop, Ph.D.

Vice President
Brian Horowitz
Stephanie Davis
Administrative Coordinator
Highlights
Characteristics of Real Estate Firms
Seventy-eight percent of real estate

firms have a single office, typically with
three full-time real estate licensees, up
from two in 2015.
Eighty-three percent of firms are
independent non-franchised firms, and
15 percent are independent franchised
firms.
Eighty-five percent of firms specialize in
residential brokerage.
Thirty-six percent of firms are LLCs, 24
percent are sole proprietorship, 27
percent are S-Corps, and 10 percent are
C-Corps.
The typical residential firm has been
operating for 13 years, while the typical
commercial firm has been operating for
20 years.
Fifty-seven percent of firms have a
market area of a metropolitan area or
region and 30 percent have a market
area of a rural area or small town.
Benefits
Business Activity of Firms
Firms with only one office had a median

brokerage sales volume of $4.5 million
in 2015, while firms with four or more
offices had a median brokerage sales
volume of $203.8 million in 2015.
Firms with one office had a total of 21
real estate transaction sides in 2015,
while firms with four or more offices
typically had 900 transaction sides.
Firms typically had 30 percent of their

customer inquiries from past client
referrals, 30 percent from repeat
business from past clients, and 10
percent from their website, seven
percent through social media, and two
percent through open houses.
Firms typically had 30 percent of their
sales volume from past client referrals,
30 percent from repeat business from
past clients, and 10 percent from their
website, five percent through social
media, and two percent through open
houses.
Many firms have the capability to offer
in-house ancillary services to real estate
clients. The most common in-house
service is business brokerage.
Only six percent of firms are aware of
wire fraud happening at their firm at
closing and 49 percent provide
education to clients on wire fraud.
The most common benefit that firms

offer to independent contractors,
licensees, and agents is errors and
omissions/liability insurance at 37
percent.
While this is also the most common
benefit for salaried licensees and
agents, only 26 percent have this
benefit.
Among administrative staff, 35 percent

receive vacation/sick days, 36 percent
have errors and omissions/liability
insurance (up from 33 percent in 2015),
and 11 percent have health insurance.
Forty-five percent of senior
management has errors and
omissions/liability insurance (up from
42 percent in 2015), 22 percent have
vacation/sick days, and 15 percent have
health insurance.
Future Outlook of Firms
Forty-seven percent of firms reported

they are actively recruiting sales agents
in 2016, up from 44 percent in 2015.
Sixty-four percent of firms expect
profitability (net income) from all real
estate activities to increase in the next
year, down from 68 percent in 2015.
Forty-three percent of firms expect
competition to increase in the next year
from non-traditional market
participants, down from 45 percent in
2015.
Forty-six percent of firms expect
competition during the same time
period to increase from virtual firms (up
from 41 percent in 2015), while only 17
percent expect competition will
increase from traditional brick and
mortar firms.
Profitability, keeping up with
technology, maintaining sufficient
inventory, and recruiting younger
agents are among the biggest
challenges cited for firms in the next
two years.
Forty-eight percent of firms are

concerned with Gen Ys ability to buy a
home, 46 percent of firms are
concerned about the recruitment of
Gen Y and Gen X real estate
professionals, and 44 percent of firms
are concerned with Baby Boomers
retiring from real estate as a profession.
Thirty-eight percent of all firms said
they have an exit plan for when they
decide to retire or exit the real estate
industry.
Fifty percent of firms have no internal
family relationships compared to seven
percent where everyone is related in a
family-owned and operated firm.
The most common relationships at
firms are among spouses/partners
followed by parent/child relationships.
Eighty-two percent of firms encourage
their agents to volunteer in the local
community and 48 percent at their local
association of REALTORS.
Summary
Seventy-eight percent of real estate firms have
a single office, typically with three full-time real
estate licensees (up from 2 in 2015) and 85
percent specialize in residential brokerage, up
from 82 percent in 2015. Thirty-six percent of
firms are LLCs, 24 percent are sole
proprietorship, 27 percent are S-Corps, and 10
percent are C-Corps. Fifty-seven percent of
firms cover a geographic market area of a
metropolitan area or region, 30 percent cover a
rural area or small town, seven percent cover a
resort area or small town, and four percent
cover a multi-state area. Only one percent are
nationwide firms.
Eighty-three percent of firms are independent,
non-franchised companies and 15 percent are
independent franchised companies. The typical
residential firm has been operating for 13 years,
while the typical commercial firm has been
operating for 20 years. Franchised firms are
typically larger companies, thus 55 percent of
firms with four or more offices are franchised
companies. Franchised firms are also more
common among residential real estate firms as
19 percent of residential firms are franchised
compared to only eight percent of commercial
real estate firms.
Eighty-eight percent of firms reported that the
number of mergers and acquisitions for the firm
has remained the same from 2005 to 2010 and
2011 to 2016. However, nine percent of firms
indicated that mergers and acquisitions have
increased in that time period.
While the typical firm has three full-time real
estate licensees, larger firms reported having a
median of 120 full-time real estate licensees

(down from 125 in 2015), five part-time licenses
who work less than 30 hours a week (up from
three in 2015), 10 non-licensee full-time staff,
and one non-licensee part-time staff. The
typical firm did not have a new licensee or a
licensee who left the firm, but those who had
four or more offices typically had 15 new
licensees join their firm in 2015 and five
licensees who left their firm in the same year.
Firms with four or more offices also saw a gain
in staff who are not licenseestypically one
staff member.
A median of 97 percent of firms revenue was
derived from real estate business activity. Fortytwo percent of other real estate business
activity was derived from commercial
brokerage.
The typical residential real estate firms
brokerage sales volume was $6.3 million in
2015, while the typical commercial real estate
firms brokerage sales volume was $4.5 million
in 2015. There was a wide range for the median
brokerage sales volume by the number of
offices at a firm. Those with only one office had
a median brokerage sales volume of $4.5
million in 2015, while those with four or more
offices had a median brokerage sales volume of
$203.8 million in 2015. Similarly, those with one
office had a total of 21 real estate transaction
sides in 2015, while those with four or more
offices typically had 900 real estate transaction
sides in 2015.
Many firms have the capability to offer in-house
ancillary services to real estate clients. The most
common in-house service is business brokerage,
followed by relocation services, and home

improvement. Among firms with four or more
offices, 55 percent offer relocation services, 48
percent offer business brokerage, 25 percent
offer title or escrow services in house, and 20
percent offer mortgage lending. The typical firm
makes less than one percent of their net
revenue from ancillary services. However, those
with four or more offices typically make five
percent of their net revenue from these
services.
Firms typically had 30 percent of their customer
inquiries from past client referrals, 30 percent
from repeat business from past clients, and 10
percent from their website, seven percent
through social media, and two percent through
open houses. Firms typically had 30 percent of
their sales volume from past client referrals, 30
percent from repeat business from past clients,
and 10 percent from their website, and seven
percent through social media. Firms report their
current competition is most likely to come from
traditional brick and mortar firms, followed by
non-traditional market participants, and virtual
firms.
The most common feature on firms websites
are property listings, agent/staff profiles, links
to social media accounts, mortgage/financial
calculators, information about the home buying
and selling process, and community
information/demographics. Firms provide or
encourage use of specific software. The most
common software that is provided or
encouraged to use by agents/brokers is multiple
listing services, comparative market analysis,
electronic contracts/forms, and e-signature.
The most common benefit that firms offer to
independent contractors, licensees, and agents
is errors and omissions/liability insurance at 81

percent. However, many share the cost of the
insurance with their employees. Only 20
percent of firms offer their independent
contractors, licensees, and agents health
insurance and in most cases the employee pays
for the benefit. Among salaried licensees and
agents, administrative staff, and senior
management there are a larger share of firms
who pay for errors and omissions/liability
insurance, vacation/sick days, and health
insurance.
Forty-seven percent of firms reported they are
actively recruiting sales agents in 2016, up from
44 percent in 2015. This is more common
among residential firms (51 percent) than
commercial firms (32 percent) and more
common among firms with four offices or more
(88 percent) than firms with one office (39
percent). Eighty-six percent of firms reported
the reason for recruitment is growth in primary
business followed by the desire for younger
agents at 40 percent. This is consistent for
residential firms. Commercial firms, however,
are more likely to recruit to expand into new
markets and into new lines of business or
specialty areas. Larger firms are much more
likely to recruit for the desire for younger
agents and to replace agents who are leaving
the firm.
Sixty-four percent of firms expect profitability
(net income) from all real estate activities to
increase in the next year, down from 68 percent
in 2015. Commercial real estate firms are more
optimistic as 67 percent expect profitability to
improve (down from 75 percent in 2015), as
well as large firms with four or more offices70
percent expect profitability to improve (down

from 79 percent in the previous year).
up from 59 percent each in the previous year.
Forty-three percent of firms expect competition

to increase in the next year (mid-2016 to mid2017) from non-traditional market participants,
down from 45 percent in 2015. Forty-six
percent of firms expect competition during the
same time period to increase from virtual firms
(up from 41 percent in 2015), while only 17
percent expect competition will increase from
traditional brick and mortar firms.
Thirty-eight percent of all firms said they have

an exit plan for when they decide to retire or
exit the real estate industry. Twenty-two
percent said they do not plan on retiring and 17
said they do not plan on leave the real estate
business, compared to 26 percent that do not
have an exit plan in place. Thirty-one percent of
commercial firms said they do not plan on
retiring compared to 22 percent of residential
firms. Twenty-seven percent of residential firms
to not have an exit plan in place compared to
only 18 percent of commercial firms. Larger
firms are more likely to have an exit plan in
place compared to firms with only one office
and that were more likely to not plan on retiring
yet.
Profitability, keeping up with technology,

maintaining sufficient inventory, and recruiting
younger agents are among the biggest
challenges sited for firms in the next two years.
Commercial firms are more likely than
residential firms to site state and local or
regional economic conditions, while residential
firms are more likely to site recruiting younger
agents, competition from non-traditional
market participants, and agent retention.
When firms are asked to predict the effect of
generations on the industry for the next two
years, the most common concern was Gen Ys
ability to buy a home due to stagnant wage
growth, a slow job market, and their debt to
income ratios48 percent of firms cited this as
a concern, down from 54 percent in 2015. This
was followed by the recruitment of Gen Y and
Gen X into the real estate profession and
conversely Baby Boomers retiring from the real
estate industry. Commercial firm were more
concerned than residential firms about too
many younger real estate professionals joining
the industry. Firms with four or more offices
were most concerned with the recruitment of
Gen Y and Gen X into the industry at 74 percent
and Baby Boomers retiring at 62 percent, both
Fifty percent of firms have no internal family

relationships compared to seven percent where
everyone is related in a family-owned and
operated firm. Forty-three percent of firms
have some family relationships within in the
firms. Residential firms are more likely to have
some family relationships and commercial firms
were slightly more likely to have no family
relationships. Smaller, one-office firms are more
likely to have everyone related at nine percent
compared to larger firms with four or more
offices that cited no family relationships at 32
percent. Sixty-two percent of firms who have a
family relationship at the firm cited a spouse or
partner family relationships and 55 percent
cited a parent-child relationship. Residential
firms are more likely to have a spouse or
partner relationship and commercial firms are
more likely to have a sibling relationship. Larger
firms with four or more offices are more likely
to have a parent-child or sibling relationship

and small firms are more likely to have a spouse
or partner relationship.
Eighty-two percent of firms encourage their
agents to volunteer in the local community, 48
percent at the local association of REALTORS,
28 percent of firms encourage agents to
volunteer at their state association of
REALTORS and 19 percent encourage
volunteering at the National Association of of
REALTORS. Residential firms are more likely
than commercial firms to encourage agents to
volunteer. Ninety-five percent of firms with four
or more office encourage their agents to
volunteer in the local community and 77
percent encourage involvement at the local
association of REALTORS. In comparison, 80
percent of firms with one office encourage their
agents to volunteer in the local community and
43 percent encourage involvement at the local
association of REALTORS.
CHARACTERISTICS OF REAL ESTATE FIRMS
Exhibit 1-1
Exhibit 1-2
Exhibit 1-3
Exhibit 1-4
Exhibit 1-5
Exhibit 1-6
Exhibit 1-7
Exhibit 1-8
Exhibit 1-9
Exhibit 1-10
Exhibit 1-11
Exhibit 1-12
Exhibit 1-13
Exhibit 1-14
Exhibit 1-15
Exhibit 1-16
YEARS IN REAL ESTATE BUSINESS

NUMBER OF OFFICES
NUMBER OF OFFICES
OFFICE OPENINGS AND CLOSINGS
CHANGE IN MERGERS/ACQUISITIONS FOR FIRM FROM 2005-2010 TO 2011-2016
SHARE OF INDEPENDENT AND FRANCHISED FIRMS
FIRM TYPE BY RESIDENTIAL AND COMMERCIAL FIRMS
FIRM TYPE BY NUMBER OF OFFICES AT FIRM
LEGAL ORGANIZATION OF REAL ESTATE FIRMS
STAFF AT FIRMS BY NUMBER OF OFFICES AT FIRM
CHANGE IN STAFF AT FIRMS BY NUMBER OF OFFICES AT FIRM
FIRM'S PRIMARY SPECIALTY AREA
PERCENT OF FIRM'S REVENUE FROM PRIMARY REAL ESTATE BUSINESS ACTIVITY
OTHER REAL ESTATE BUSINESS ACTIVITIES AMONG FIRM
GEOGRAPHIC MARKET AREA OF FIRM
2016 National Association of Realtors Profile of Real Estate Firms

Exhibit 1-1
(Percentage Distribution)
One year or less

2 to 3 years
or more
4 15
to 5years
years
48%
6 to 7 years
8 to 10 years
11 to 14 years
15 years or more
All Firms
7%
8
7
7
12
11
48
One year or less

7%
2 to 3 years
8%
4 to 5 years
7%
6 to 7 years
7%
8 to 10 years
12%
11 to 14 years
11%

Exhibit 1-2
All Firms
Residential Firms
Commercial Firms
Median (years):
YEARS
IN REAL
ESTATE8%BUSINESS
7%
5%
One year or less

2 to 3 years
4 to 5 years
6 to 7 years
8 to 10 years
80%
11 to 14 years
15 years or more
70%
Median (years)
60%
8%(Percentage Distribution)
8%
7%
8%
7%
7%
12%
12%
11%
11%
48%
46%
14
13
All2%Firms: 14
Residential
Firms: 13
5%
5%
Commercial Firms: 20
12%
5%
67%
20
67%
48%
50%
46%
40%
30%
20%
10%
7%
8%
5%
8% 8%
7% 8%
2%
12% 12% 12% 11% 11%
5%
7% 7%
5%
5%
%
One year or
less
2 to 3 years
4 to 5 years
All Firms
6 to 7 years
Residential Firms
8 to 10 years 11 to 14 years 15 years or

more
Commercial Firms

Exhibit 1-3
NUMBER OF OFFICES
1 office
2 offices
3 offices
4 or more offices 3 offices
3%
2 offices
9%
All Firms
NUMBER
OF OFFICES
78%
9
(Percentage
Distribution)
4 or more offices3
10
10%
1 office
78%

Exhibit 1-4
NUMBER OF OFFICES
All Firms
78%
9%
3%
10%
1
85%
1 office
2 offices
3 offices
4 or more offices
90%
Median (offices)
80%
78%
Residential
Firms
Commercial Firms
NUMBER
OF OFFICES
76%
85%
10%
6%
3%
4%
11%
5%
1
1
Median (offices):
All Firms: 1
Residential Firms: 1
Commercial Firms: 1
76%
70%
60%
50%
40%
30%
20%
9%
10%
10%
10%
6%
3%
3%
11%
5%
4%
%
1 office
2 offices
All Firms
Residential Firms
3 offices
4 or more offices
Commercial Firms

Exhibit 1-5
OFFICE OPENINGS AND CLOSINGS
(Medians)
All Firms
Residential Firms
Commercial Firms
Number of offices affiliated with your firm at

year-end in 2015
Number of new offices opened in 2015
1
0
1
0
1
0
Number of offices acquired through purchase or

merger with another firm in 2015
Number of offices acquired through purchase or

merger with another firm from 2014-2007
Number of offices closed in 2015
0
0
0
0
0
0

Exhibit 1-6
CHANGE IN MERGERS/ACQUISITIONS FOR FIRM FROM 2005-2010 TO 2011-2016
CHANGE IN MERGERS/ACQUISITIONS FOR FIRM FROM

All Firms
2005-2010
TO 2011-2016
9%
Increased
Decreased
Stayed the same
3 (Percentage Distribution)
88
Increased
9%
Stayed the same

88%
Decreased
3%

Exhibit 1-7
SHARE OF INDEPENDENT AND FRANCHISED FIRMS
Independent, non-franchised company

Independent, franchised company
Subsidiary of a national or regional
corporation, franchised company
corporation, non-franchised company
All Firms
SHARE OF83%
INDEPENDENT
15
AND FRANCHISED FIRMS
2 Subsidiary of a national or
regional corporation,
franchised company
1
2%
Subsidiary of a national or
regional corporation, nonfranchised company
1%
Independent, franchised
company
15%
Independent, non-franchised
company
83%

Exhibit 1-8
FIRM TYPE BY RESIDENTIAL AND COMMERCIAL FIRMS
FIRM TYPE BY RESIDENTIAL

AND Firms
COMMERCIAL
All Firms
Residential
CommercialFIRMS
Firms
Independent,
franchised company
100%
1%
2%
corporation,
franchised company
90%
15%
corporation,
non-franchised company
80%
83%
80%
15%
17%
1%
2%
2%
17%
1%
92%
8%
1%
8%
2%
1%
1%
* Less
than 1 percent
70%
60%
50%
92%
40%
83%
80%
All Firms
Residential Firms
30%
20%
10%
0%
Commercial Firms
Subsidiary of a national or regional corporation, non-franchised company

Subsidiary of a national or regional corporation, franchised company

Exhibit 1-9
FIRM TYPE BY NUMBER OF OFFICES AT FIRM
Number
of Offices at AT
FirmFIRM
FIRM TYPE BY NUMBER
OF OFFICES
100%
2% 1%
90%
15%
corporation, franchised company
80%
corporation,
non-franchised company
All Firms One office

Two offices
Three offices Four or more offices
(Percentage
Distribution)
83%
89%
71%
59%
41%
1% %
3%
1%
15
10%
24%
35%
44%
5%
4%
10%
2
1%
5%
4%
24%
1%
3%
11%
35%
4%
11%
4%
* 70%
Less than 1 percent
44%
60%
50%
40%
83%
89%
71%
30%
59%
41%
20%
10%
0%
All Firms
One office
Two offices
Three offices
Subsidiary of a national or regional corporation, non-franchised company

Subsidiary of a national or regional corporation, franchised company
Four or more offices

Exhibit 1-10
LEGAL ORGANIZATION OF REAL ESTATE FIRMS
LEGAL ORGANIZATION
OF REAL ESTATE FIRMS
All Firms
LLC
Sole proprietorship
S-Corp
C-Corp
Partnership
C-Corp
10%
36% (Percentage Distribution)

24
Partnership
27
3%
10
3
LLC
36%
S-Corp
27%
Sole proprietorship
24%

Exhibit 1-11
STAFF AT FIRMS BY NUMBER OF OFFICES AT FIRM
(Medians)
Number of Offices at Firm

All Firms
One office Two offices
Three offices
Number of full-time real estate licensees

Number of full-time licensees who are
independent contractors
Number of part-time real estate
licensees (work fewer than 30 hours a
week) who are salaried
Number of part-time licensees (work
fewer than 30 hours a week) who are
independent contractors
10
30
120
30
118
Number of full-time staff (non-licensees)

Number of part-time staff (nonlicensees)
Number of part-time staff (nonlicensees) who work fewer than 30
hours a week
10

Exhibit 1-12
CHANGE IN STAFF AT FIRMS BY NUMBER OF OFFICES AT FIRM
(Medians)
Number of licensees who joined firm

in 2015
Number of licensees who left firm in
2015
Number of staff (non-licensees) who
joined firm in 2015
Number of staff (non-licensees) who
left firm in 2015

Two offices
Three offices
All Firms
One office
15

Exhibit 1-13

All Firms
Auction
International
Residential Brokerage
Counseling
Relocation
Residential Property Management
Commercial Appraisal
Commercial Property
Management
Commercial
Brokerage
Land/Development
Residential Appraisal
Commercial Brokerage
Land/Development
Residential Property
Management
Commercial Property Management
*
*
*
*
1%
1%
1%
2%
4%
6%
85%
6%
4%
2%
1%
1%
* Less than 1 percent

85%
1%
Relocation
Counseling
International
Auction
%
10%
20%
30%
40%
50%
60%
70%
80%
90%

Exhibit 1-14
PERCENT OF FIRM'S REVENUE FROM PRIMARY REAL ESTATE BUSINESS ACTIVITY
PERCENT OF FIRM'S REVENUE FROM

PRIMARY REAL ESTATE
All Firms
*
BUSINESS ACTIVITY
None
1 to 4 percent
5 to 10 percent
11 to 20 percent
90%
21 thru 50 percent
51 thru 75 percent
80%
76 thru 100 percent
Median (percent)
70%
*
1%
*
4%
12%
82%
97%
Median All Firms: 97%

82%
60%
50%
40%
30%
20%
12%
10%
1%
5 to 10
percent
11 to 20
percent
4%
%
None
1 to 4 percent
21 thru 50
percent
51 thru 75
percent
76 thru 100
percent

Exhibit 1-15
OTHER REAL ESTATE BUSINESS ACTIVITIES AMONG FIRM
(Percent of Respondents)
All Firms
OTHER REAL ESTATE BUSINESS
ACTIVITIES AMONG FIRM
2%
International (Commercial)
International (Residential)
Auction
Commercial Brokerage
Counseling
ResidentialProperty
PropertyManagement
Management
Commercial
Land/Development
Relocation
Residential Property Management
Commercial Brokerage Relocation
2%
3%
4%
6%
9%
12%
16%
18%
29%
39%
42%
42%
39%
29%
18%
Land/Development
16%
Commercial Property Management
12%
Counseling
9%
6%
Auction
4%
International (Residential)
3%
International (Commercial)
2%
2%
%
5%
10%
15%
20%
25%
30%
35%
40%
45%

Exhibit 1-16
GEOGRAPHIC MARKET AREA OF FIRM
Firms
GEOGRAPHICAllMARKET
AREA OF FIRM
Metropolitan area or region

Rural area/Small town
Resort/Recreation area
Multi-state area
Resort/ Recreation
area
Nationwide
7%
57%Distribution)
(Percentage
30
Multi-state area
8
4%
4
1
Nationwide
1%
Rural area/Small town

30%
Metropolitan area or
region
57%
BUSINESS ACTIVITY OF FIRMS

Exhibit 2-1
Exhibit 2-2
Exhibit 2-3
Exhibit 2-4
Exhibit 2-5
Exhibit 2-6
Exhibit 2-7
Exhibit 2-8
Exhibit 2-9
Exhibit 2-10
Exhibit 2-11
Exhibit 2-12
Exhibit 2-13
Exhibit 2-14
Exhibit 2-15
Exhibit 2-16
Exhibit 2-17
Exhibit 2-18
Exhibit 2-19
Exhibit 2-20
Exhibit 2-21
Exhibit 2-22
Exhibit 2-23
FIRM'S REAL ESTATE BROKERAGE SALES VOLUME BY RESIDENTIAL AND COMMERCIAL FIRMS, 2015
FIRM'S REAL ESTATE BROKERAGE SALES VOLUME BY NUMBER OF OFFICES AT FIRM, 2015
FIRM'S TOTAL REAL ESTATE TRANSACTION SIDES BY RESIDENTIAL AND COMMERCIAL FIRMS, 2015
FIRM'S TOTAL REAL ESTATE TRANSACTION SIDES BY NUMBER OF OFFICES AT FIRM, 2015
ANCILLARY SERVICES OFFERED AT FIRMS BY NUMBER OF OFFICES AT FIRM
ANCILLARY SERVICES OFFERED AT FIRMS TO TYPES OF CLIENTS
PERCENT OF NET REVENUE OF FIRM MADE ON ANCILLARY SERVICES BY NUMBER OF OFFICES AT FIRM
PERCENT OF CUSTOMER INQUIRIES GENERATED FROM SOURCES
PERCENT OF FIRM'S SALES VOLUME WAS GENERATED BY SOURCE
WHERE DOES CURRENT COMPETITION COME FROM
FEATURES ON FIRM'S WEBSITE BY RESIDENTIAL AND COMMERICAL FIRMS
FIRM PROVIDES OR ENCOURAGES AGENT/BROKER USE OF SPECIFIC SOFTWARE, BY RESIDENTIAL AND COMMERCIAL FIRMS
FIRM PROVIDES OR ENCOURAGES AGENT/BROKER USE OF SPECIFIC SOFTWARE, BY NUMBER OF OFFICES AT FIRM
EXPERIENCE WITH WIRE FRAUD AT CLOSING, BY RESIDENTIAL AND COMMERCIAL FIRMS
EXPERIENCE WITH WIRE FRAUD, BY NUMBER OF OFFICES AT FIRM
WIRE FRAUD EDUCATION TO CLIENTS, BY RESIDENTIAL AND COMMERCIAL FIRMS
WIRE FRAUD EDUCATION TO CLIENTS, BY NUMBER OF OFFICES AT FIRM
FIRM HAS SOCIAL MEDIA GUIDELINES FOR AGENTS AND EMPLOYEES, BY RESIDENTIAL AND COMMERCIAL FIRMS
FIRM HAS SOCIAL MEDIA GUIDELINES FOR AGENTS AND EMPLOYEES, BY NUMBER OF OFFICES AT FIRM
FIRM USE OF CLOSED COMMUNICATION GROUP, BY RESIDENTIAL AND COMMERCIAL FIRMS
FIRM USE OF CLOSED COMMUNICATION GROUP, BY NUMBER OF OFFICES AT FIRM
FIRM VIRTUAL OFFICE, BY RESIDENTIAL AND COMMERCIAL FIRMS
FIRM VIRTUAL OFFICE, BY NUMBER OF OFFICES AT FIRM

Exhibit 2-1
FIRM'S REAL ESTATE BROKERAGE SALES VOLUME BY RESIDENTIAL AND COMMERCIAL FIRMS, 2015
Residential Firms
Commercial Firms
FIRM'S REAL ESTATE BROKERAGE
SALES
VOLUME
BY2%RESIDENTIAL AND
3%
COMMERCIAL
43% FIRMS, 2015 53%
Median (millions):
No transactions
Less than $5 million
$5 million to under $10 million
$1 billion
more
$100 million to under
$250ormillion
$500
million
to under
billion
$500
million
to under
$1 $1
billion
$1 billion or more
Median
(millions)
$250
million
to under $500 million
15%Distribution)
(Percentage
22%
10%
4%
5%
3%
*
*
2%
$4.5
14%
7%
6%
4%
2%
2%
2%
$6.3
2%
2%
2%
2%
Residential Firms: $6.3

Commercial Firms: $4.5
3%
4%
* Lessmillion
than 1 percent
$100
to under $250 million
5%
6%
4%
7%
10%

14%
22%
15%
53%
43%
2%
3%
No transactions
10%
Commercial Firms
20%
30%
Residential Firms
40%
50%
60%

Exhibit 2-2
FIRM'S REAL ESTATE BROKERAGE SALES VOLUME BY NUMBER OF OFFICES AT FIRM, 2015
Offices at FirmBY NUMBER OF OFFICES AT

FIRM'S REAL ESTATE BROKERAGENumber
SALESof VOLUME
One office
TwoFIRM,
offices 2015
Three offices
No transactions
$1 billion or more
$50 million
to under
$500 million
to $100
undermillion
$1 billion
$250
million
under
million
$500
million
to to
under
$1$500
billion
$1 billion or more
Median (millions)
5%
50%
17%
14%
6%
5% 4%
3%
2%
1%
9%
*
4%
1%
*
$4.5
8%
2%
9%
4%
6%
10%
11%
14%
6%
14%
10%

No transactions
1%
%
One10%
Office: $4.5
Two 6%
Offices: $17.1
Three
10%Offices: $43.2
Four 6%
or More Offices: $203.8
9%
13%
9%
14%
21%
$203.8
11%
12%
6%
*
Median
(millions):
13%
11%

1% Distribution) *
(Percentage
26%
13%
14% 21%
18%
19%
11%
12%
11%
14%
11%
13%
8%
17%
4%
12%
12%
3%
5%
*
*
13% $17.1
$43.2
17%
19%
18%
17%
13%
26%
50%
5%
10%
20%
Three offices
30%
Two offices
40%
One office
50%
60%

Exhibit 2-3
FIRM'S TOTAL REAL ESTATE TRANSACTION SIDES BY RESIDENTIAL AND COMMERCIAL FIRMS, 2015
Residential Firms
No transactions
1 to 10
11 to 20
21 to 30
31 to 40
1001 or more
41 to 50
51 to 100
501 to 1000
101 to 250
251 to 500
501 to 1000
251 to 500
1001 or more
Median
101 to 250
Commercial Firms
FIRM'S TOTAL REAL ESTATE TRANSACTION

SIDES3%
BY RESIDENTIAL AND
4%
22%
33%
COMMERCIAL
FIRMS, 2015
15%
(Percentage
Distribution)
10%
6%
5%
12%
11%
6%
3%
6%
30
%
6%
1%
3%
%
6%
7%
21%
14%
3%
8%
10%
7%
*
1%
*
18
Median:
Residential Firms: 30
Commercial Firms: 18
11%
10%
51 to 100
12%
8%
41 to 50
5%
3%
31 to 40
6%
14%
21 to 30
10%
21%
11 to 20
15%
33%
1 to 10
22%
3%
No transactions
4%
%
5%
10%
15%
Commercial Firms
20%
Residential Firms
25%
30%
35%

Exhibit 2-4
FIRM'S TOTAL REAL ESTATE TRANSACTION SIDES BY NUMBER OF OFFICES AT FIRM, 2015
No transactions
1 to 10
11 to 20
211001
to 30or more
31 to 40
41 to 50
51 to501
100to 1000
101 to 250
251 to251
500to 500
501 to 1000
1001 or more
101 to 250
Median
Number of
Offices at Firm
FIRM'S TOTAL REAL ESTATE
TRANSACTION
SIDES BY NUMBER OF OFFICES AT
Three offices
FIRM,
2015
Median:
6%
1%
*
1%
(Percentage
27%
9%
7% Distribution)
16%
8%
2%
16%
11%
7%
8%
6%
1%
6%
7%
4%
5%10%
4%
5%
15%
9%
12%
17%
6%
1%
10%
19%
19%
12%
4%
13%18%
18%
13%
1%
9%
15%
4%
1%
6%
16%
8%
19%
21
100 19%
250
10%
5%
6%
51 to 100
17%
12%
1%
5%
41 to 50
4%
5%
2%
4%
31 to 40
7%
6%
3%
21 to 30
7%8%
11%
3%
2%
11 to 20
8%
16%
6%
7%
1 to 10
9%
27%
1%
%
No transactions
1%
6%
%
10%
20%
30%
Three offices
6%
3%
3%
2%
1%
5%
8%
12%
10%
48%
900
40%
Two offices
48%
One Office: 21
Two Offices: 100
Three Offices: 250
Four or More Offices: 900
50%
One office
60%

Exhibit 2-5
ANCILLARY SERVICES OFFERED AT FIRMS BY NUMBER OF OFFICES AT FIRM
Business brokerage
Relocation services
Home improvement
Mortgage lending
Home warranty
Title or escrow services
Homeowners insurance
Settlement services
Other insurance
Home inspection
Moving services
Securities services
One office
Business brokerage
Relocation services
Home improvement
Mortgage lending
Home warranty
Settlement services
Other insurance
Home inspection
Moving services
Securities services
Two offices
Business brokerage
Relocation services
Home improvement
Mortgage lending
Home warranty
Settlement services
Other insurance
Home inspection
Moving services
Securities services
Three offices
Business brokerage
Relocation services
Home improvement
Mortgage lending
Home warranty
Settlement services
Other insurance
Home inspection
Moving services
Securities services
Business brokerage
Relocation services
Home improvement
Mortgage lending
Home warranty
Offer this service

in-house
31%
17
6
5
5
4
3
4
2
2
1
*
Offer this service

outsourced or with a
business relationship
7%
15
24
40
44
36
29
26
20
37
21
8
29%
13
5
3
5
2
1
2
1
2
1
*
7%
15
24
37
41
35
28
25
19
36
19
7
58%
65
66
55
50
58
65
67
74
58
74
86
6%
8
6
5
5
5
5
5
6
4
6
7
35%
20
7
5
6
5
4
7
4
3
1
1
9%
15
23
42
47
38
30
27
20
38
24
7
50%
59
67
49
43
52
61
61
72
56
71
86
6%
6
4
3
4
5
5
5
5
4
5
6
35%
29
5
12
5
9
4
4
3
*
*
1
4%
18
21
44
51
35
28
28
17
35
23
7
53%
46
65
40
38
48
60
61
71
58
69
84
9%
6
9
5
7
7
8
7
10
7
9
8
48%
55
6
20
10
25
11%
17
24
53
63
41
38%
26
65
25
25
32
3%
2
6
1
2
2
Do not currently
Do not currently offer this service, but
offer this service plan to in the future
55%
6%
61
7
65
6
51
5
46
5
54
5
63
6
64
6
72
6
57
4
72
6
85
7
Settlement services
Other insurance
Home inspection
Moving services
Securities services
11
20
8
2
1
1
35
29
29
35
31
10
50
46
58
60
61
83
5
6
6
3
6
8

Exhibit 2-6

(Percent
Offer this service
in- of Respondents)
Offer this service inhouse to current clients house to past clients
Securities
services
Business
brokerage
Other insurance
Do not currently
offer this service
1%
15%
5%
2%
5%
6%
7%
8%
Settlement services
8%
8%
Home inspection
Home warranty
8%
8%
9%
10%
10%
9%
12%
11%
13%
10%
80%
15%
23%
11% 81%
15%
79%
71%
23%
Moving services
Relocation services
15%
11%
13%
10%
Home improvement
Mortgage lending
Mortgage lending
12%
Home warranty
Title or escrow
Relocation
servicesservices
11%
10%
9%
Business brokerage
71%
6%
85%
85%
80%
84%
83%
81%
9%
Home inspection
8%
8%
84%
Settlement services
8%
8%
85%
7%
81%
81%
83%
8%
85%
Moving services
5% 6%
88%
Other insurance
5% 6%
88%
Securities services 1% 2%
0%
88%
88%
79%
Home improvement
10%
93%
93%
10%
20%
30%
Offer this service in-house to current clients

Do not currently offer this service
40%
50%
60%
70%
80%
90%
Offer this service in-house to past clients
100%

Exhibit 2-7
PERCENT OF NET REVENUE OF FIRM MADE ON ANCILLARY SERVICES BY NUMBER OF OFFICES AT FIRM
PERCENT OF NET REVENUE OF FIRM MADE

ON of
ANCILLARY
SERVICES BY NUMBER OF
Number
Offices at Firm
OFFICES
AT
FIRM
All Firms
Three offices
None
1 to 4 percent
5 toFour
10 percent
or more
11 to 20offices
percent
21 to 50 percent
51 to 75 percent
76 to 100 percent
Median (percent)
18%
Three offices
Distribution)
61%(Percentage43%
9%
14%
15%
25%
28%
4%
7%
5%
5%
1%
1%
5%
4%
*
1%
55%
10%
17%
6% 13%
6%
1%
6%
*
30%
Two offices
30%
23%
20%
4%
14%
2%
7%
4%
23%
43%
One office
14%
10%
20%
30%
10%
40%
50%
60%
1 to 4 percent
5 to 10 percent
21 to 50 percent
51 to 75 percent
76 to 100 percent
16%
7%
15%
17%
70%
1% 4%
2%
14%
25%
None
4%
9%
55%
0%
19%
20%
61%
All Firms
18%
13%
28%
19%
16%
1%
4%
10%
4%
6%
80%
11 to 20 percent
5%
7%
4%
5% 1% 5%
6% 1% 6%
90%
100%

Exhibit 2-8
PERCENT OF CUSTOMER INQUIRIES GENERATED FROM SOURCES
(Medians)
Number
of Offices at Firm
PERCENT OF CUSTOMER INQUIRIES
GENERATED
FROM SOURCES
All Firms
Past client referrals
30%
35% business from past clients
Repeat
30%
Website
10%
Social Media
7%
30% 30% 30% 30%
30% 30%
30%
Open
2%
30% house
Other
9%
25%
25%
One office
30%
30%
10%
5%
*
10%
Two offices
(Medians)
30%
25%
15%
10%
5%
5%
Three offices
30%
30%
10%
10%
5%
5%

25%
25%
15%
10%
5%
5%
25%
25%
20%
15%
15%
15%
10% 10%
10%
10% 10% 10%
9%
10%
10%
7%
5%
5% 5% 5%
5% 5% 5%
5%
2%
%
Repeat business from

past clients
All Firms
One office
Website
Two offices
Social Media
Three offices
Open house
Other

Exhibit 2-9
PERCENT OF FIRM'S SALES VOLUME WAS GENERATED BY SOURCE
(Medians)

PERCENT OF
FIRM'S SALES
VOLUME
WAS GENERATED
BY SOURCE
All Firms
One office
Two offices
Three offices
30%
Repeat business from past clients
30%
Website
10%
35%
Social Media
5%
Open house
2%
Other
30% 30% 30% 30% 30% 30% 30% 30% 10%
30%
30%
30%
10%
5%
*
10%
(Medians)
30%
30%
10%
5%
3%
5%
30%
35%
10%
5%
5%
2%
30%
30%
10%
10%
5%
10%
10% 10% 10% 10% 10%
10%
10% 10%
5% 5% 5% 5%
5% 5%
2%
Repeat business from

past clients
All Firms
One office
Website
Two offices
Social Media
Three offices
10%
5%
3%
Open house
2%
Other

Exhibit 2-10
WHERE DOES CURRENT COMPETITION COME FROM
(Medians)
WHEREAllDOES
Firms CURRENT
One office TwoCOMPETITION
offices Three officesCOME
Four or FROM
more offices
Traditional brick and mortal firms
Non traditional market participants
Virtual firms
90%
85%
10%
10%
90%
10%
10%
10%
85% (Medians)
90%
10%
5%
10%
10%
90%
90%
7%
10%
90%
10%
10%
90%
7%
5%
7%
10%
5%
All Firms
One office
Traditional brick and mortal firms
Two offices
Three offices
Non traditional market participants
90%
7%
5%
Virtual firms

Exhibit 2-11
FEATURES ON FIRM'S WEBSITE BY RESIDENTIAL AND COMMERICAL FIRMS
Firms
Commercial Firms
Residential Firms FIRMS
FEATURES ON FIRM'S WEBSITEAllBY
RESIDENTIAL
AND COMMERICAL
Link to commercial information exchange (CIE)

Live agent chat
Appointment scheduler
Property listings
Current mortgage rates
Links to real estate service providers
profiles
Home valuation/comparative marketAgent/staff
analysis tools
Links to mortgage lenders' websites
Links to
social media accounts
Links to state/local government
websites
School reports
Mortgage/financial calculators
Virtual tours
Customer reviews/testimonials
Informationinformation/demographics
about the home buying and selling process
Community
Information about the home buying and selling process

Community information/demographics
Mortgage/financial calculators
Links to social media accounts
Customer reviews/testimonials
Agent/staff profiles
Property listings
Virtual tours
School reports
Links to state/local government websites
Links to mortgage lenders' websites
Home valuation/comparative market analysis tools
Links to real estate service providers
Current mortgage rates
Appointment scheduler
Live agent chat
1%
25%
5%
(Percent6%
of Respondents)
6%
1%
6%
15%
9%
16%
17%
10%
18%
18%
10%
19%
27%
5%
30%
28%
12% 45%
30%
47%
33%
23%
34%
35%
44%
13%
58%48%
62%
44%
15%
47%
29%
53%
36%
55%
55%
60%
56% 19%
35%
59%
55%
19%
56% 60%
59%
58%
29%
62%
35%
45%
35%
47%
53%
55%
36%
78%
77%
80%
95%
88% 44%47%
97%
15%
44%
48%
13%
33%
34%
23%
28%
30%
12%
27%
30%
5%
18%
19%
10%
17%
18%
10%
15%
16%
9%
6%
6%
6%
5%
Link to commercial information exchange (CIE)

%
All Firms
10%
88%
95%
97%
78%
80%
77%
25%
20%
30%
Residential Firms
40%
50%
60%
Commercial Firms
70%
80%
90%
100%

Exhibit 2-12
FIRM PROVIDES OR ENCOURAGES AGENT/BROKER USE OF SPECIFIC SOFTWARE, BY RESIDENTIAL AND COMMERCIAL FIRMS
Multiple listing
Comparative market analysis
Electronic contracts/form
E-signature
Document preparation/Management
Contact management
Market statistics
Transaction management
Social media management tools
Graphics/Presentation
Customer relationship management
Home visualization (e.g. virtual tours or virtual staging)
Video
Property management
QR Code
Marketing automation
Loan analysis
Agent rating
All Firms
86%
83
82
78
60
58
49
40
38
37
36
32
31
28
20
19
16
13
Residential Firms
88%
86
85
82
63
61
50
43
41
38
39
35
34
25
21
20
17
14
Commercial Firms
77%
72
68
57
52
54
49
26
26
37
23
11
14
25
10
9
10
2

Exhibit 2-13
FIRM PROVIDES OR ENCOURAGES AGENT/BROKER USE OF SPECIFIC SOFTWARE, BY NUMBER OF OFFICES AT FIRM
Multiple listing
Comparative market analysis
Electronic contracts/form
E-signature
Document preparation/Management
Contact management
Market statistics
Transaction management
All Firms
86%
83
82
78
60
58
49
40
One office
85%
82
80
75
56
53
45
35
38
37
36
32
31
28
20
19
16
13
33
32
31
26
25
28
16
14
14
10
Social media management tools

Graphics/Presentation
Customer relationship management
Home visualization (e.g. virtual tours or virtual staging)
Video
Property management
QR Code
Marketing automation
Loan analysis
Agent rating

Two offices
Three offices
87%
85%
90
87
92
86
89
92
73
72
75
71
60
67
56
62
51
48
53
47
46
32
28
32
19
18
55
49
42
46
59
36
26
31
30
24

92%
88
92
91
82
83
70
64
68
67
64
61
67
35
39
42
28
30

Exhibit 2-14
EXPERIENCE WITH WIRE FRAUD AT CLOSING, BY RESIDENTIAL AND COMMERCIAL FIRMS
Yes
No, not aware of this happening at firm
Don't Know
All Firms
6%
92
2
Residential Firms
7%
92
2
Commercial Firms
3%
95
3

Exhibit 2-15
EXPERIENCE WITH WIRE FRAUD, BY NUMBER OF OFFICES AT FIRM
Yes
No, not aware of this of this happening at firm
Don't Know
All Firms
6%
92
2
One office
4%
95
1

Two offices
Three offices
9%
15%
89
85
3
*

29%
66
5

Exhibit 2-16
WIRE FRAUD EDUCATION TO CLIENTS, BY RESIDENTIAL AND COMMERCIAL FIRMS
Yes, provide education

No education provided
Don't Know
All Firms
49%
48
3
Residential Firms
53%
44
3
Commercial Firms
33%
64
4

Exhibit 2-17
WIRE FRAUD EDUCATION TO CLIENTS, BY NUMBER OF OFFICES AT FIRM
Yes, provide education

No education provided
Don't Know
All Firms
49%
48
3
One office
46%
51
3

Two offices
Three offices
56%
55%
41
40
3
6

68%
30
2

Exhibit 2-18
FIRM HAS SOCIAL MEDIA GUIDELINES FOR AGENTS AND EMPLOYEES, BY RESIDENTIAL AND COMMERCIAL FIRMS
Yes, for personal social media accounts only

Yes, for professional social medsia accounts only
Yes, for both personal and professional social media
account
No, firm does not have guidelines
Don't Know
All Firms
4%
18
Residential Firms
4%
19
Commercial Firms
3%
18
29
47
3
31
44
3
14
61
4

Exhibit 2-19
FIRM HAS SOCIAL MEDIA GUIDELINES FOR AGENTS AND EMPLOYEES, BY NUMBER OF OFFICES AT FIRM
Yes, for personal social media accounts only

Yes, for professional social medsia accounts only
Yes, for both personal and professional social media
account
No, firm does not have guidelines
Don't Know
All Firms
4%
18
One office
4%
17
29
47
3
26
51
3

Two offices
Three offices
3%
3%
26
23
35
35
1
34
38
3

4%
22
47
24
2

Exhibit 2-20
FIRM USE OF CLOSED COMMUNICATION GROUP, BY RESIDENTIAL AND COMMERCIAL FIRMS
Yes, uses group*

No
Don't Know
* Such as: Closed Facebook group, Basecamp, Google Group
All Firms
21%
76
3
Residential Firms
23%
74
3
Commercial Firms
16%
83
1

Exhibit 2-21
FIRM USE OF CLOSED COMMUNICATION GROUP, BY NUMBER OF OFFICES AT FIRM
Yes, uses group*

No
Don't Know
All Firms
21%
76
3
* Such as: Closed Facebook group, Basecamp, Google

Group
One office
16%
81
3

Two offices
Three offices
28%
43%
69
53
3
4

56%
41
4

Exhibit 2-22
FIRM VIRTUAL OFFICE, BY RESIDENTIAL AND COMMERCIAL FIRMS
Yes*
No
Don't Know
All Firms
22%
77
1
Residential Firms
23%
76
1
Commercial Firms
23%
76
1
*A firm that does not have a fixed location, and employees may work from home or in different cities and countries.

Exhibit 2-23
FIRM VIRTUAL OFFICE, BY NUMBER OF OFFICES AT FIRM
Yes*
No
Don't Know
All Firms
22%
77
1
One office
22%
77
1

Two offices
Three offices
21%
16%
78
82
1
3
*A firm that does not have a fixed location, and employees may work from home or in different cities and countries.

22%
77
1
BENEFITS
Exhibit 3-1
Exhibit 3-2
Exhibit 3-3
Exhibit 3-4
BENEFITS RECEIVED BY INDEPENDENT CONTRACTORS/LICENSEES/AGENTS

BENEFITS RECEIVED BY SALARIED LICENSEES/AGENTS
BENEFITS RECEIVED BY ADMINISTRATIVE STAFF
BENEFITS RECEIVED BY SENIOR MANAGEMENT
BENEFITS
Exhibit 3-1
BENEFITS RECEIVED BY INDEPENDENT CONTRACTORS/LICENSEES/AGENTS
Employee Pays
Errors and Omissions (E&O)
Insurance/Liability Insurance
Health insurance
Dental care
Vision care
Disability insurance
Life insurance
Long-term care insurance
Vacation/sick days
Pension plan/401(k)/SEP
26%
17
10
10
9
9
9
9
8
*Less than 1 percent
Firms Pays
37%
2
*
*
2
*
*
2
*
Both Pay
18%
1
1
*
*
1
*
*
1
Not Offered
18%
79
89
90
89
91
90
89
91
BENEFITS
Exhibit 3-2
BENEFITS RECEIVED BY SALARIED LICENSEES/AGENTS
Employee Pays
Health insurance
Dental care
Vision care
Life insurance
Vacation/sick days
Firms Pays
10%
7
6
6
6
6
5
4
4
26%
4
2
3
1
1
2
1
12
Both Pay
7%
4
2
1
1
2
1
4
1
Not Offered
58%
85
90
90
92
92
92
91
84
BENEFITS
Exhibit 3-3
BENEFITS RECEIVED BY ADMINISTRATIVE STAFF
Employee Pays
Dental care
Health insurance
Vision care
Life insurance
Vacation/sick days
Firms Pays
Both Pay
Not Offered
7%
7
6
6
6
5
5%
11
7
3
3
4
5%
10
3
3
5
2
84%
73
85
89
86
89
4
4
3
36
4
35
3
7
2
58
84
60
BENEFITS
Exhibit 3-4
BENEFITS RECEIVED BY SENIOR MANAGEMENT
Dental care
Health insurance
Life insurance
Vision care
Vacation/sick days
Employee Pays
8%
8
8
7
7
7
6
6
4
Firms Pays
6%
Both Pay
5%
Not Offered
82%
45
15
8
4
5
7
5
22
6
8
2
2
4
3
7
1
41
69
83
86
84
84
82
73
FUTURE OUTLOOK OF FIRMS
Exhibit 4-1
Exhibit 4-2
Exhibit 4-3
Exhibit 4-4
Exhibit 4-5
Exhibit 4-6
Exhibit 4-7
Exhibit 4-8
Exhibit 4-9
Exhibit 4-10
Exhibit 4-11
Exhibit 4-12
Exhibit 4-13
Exhibit 4-14
Exhibit 4-15
Exhibit 4-16
Exhibit 4-17
Exhibit 4-18
Exhibit 4-19
FIRM ACTIVELY RECRUITING SALES AGENTS IN 2016, BY RESIDENTIAL AND COMMERCIAL FIRMS
FIRM ACTIVELY RECRUITING SALES AGENTS IN 2016, BY NUMBER OF OFFICES AT FIRM
REASON FOR FIRM TO ACTIVELY RECRUIT SALES AGENTS, BY RESIDENTIAL AND COMMERCIAL FIRMS
REASON FOR FIRM TO ACTIVELY RECRUIT SALES AGENTS, BY NUMBER OF OFFICES AT FIRM
EXPECTATION ON PROFITABILITY (NET INCOME) FROM ALL REAL ESTATE ACTIVITIES FROM MID-2016 TO MID2017, BY RESIDENTIAL AND COMMERCIAL FIRMS
EXPECTATION ON PROFITABILITY (NET INCOME) FROM ALL REAL ESTATE ACTIVITIES FROM MID-2016 TO MID2017, BY NUMBER OF OFFICES AT FIRM
EXPECTATION OF LEVEL OF COMPETITION IN THE NEXT YEAR (MID-2016 TO MID-2017)
BIGGEST CHALLENGES FACING FIRM IN NEXT TWO YEARS, BY RESIDENTIAL AND COMMERCIAL FIRMS
BIGGEST CHALLENGES FACING FIRM IN NEXT TWO YEARS, BY NUMBER OF OFFICES AT FIRM
PREDICTION OF GENERATIONS EFFECT ON THE INDUSTRY IN THE NEXT 2 YEARS, BY RESIDENTIAL AND COMMERCIAL FIRMS
PREDICTION OF GENERATIONS EFFECT ON THE INDUSTRY IN THE NEXT 2 YEARS, BY NUMBER OF OFFICES AT FIRM
FIRM EXIT PLAN, BY RESIDENTIAL AND COMMERCIAL FIRMS
FIRM EXIT PLAN, BY NUMBER OF OFFICES AT FIRM
FAMILY RELATIONSHIPS IN FIRM, BY RESIDENTIAL AND COMMERCIAL FIRMS
FAMILY RELATIONSHIPS IN FIRM, BY NUMBER OF OFFICES AT FIRM
TYPE OF FAMILY RELATIONSHIPS IN FIRM, BY RESIDENTIAL AND COMMERCIAL FIRMS
TYPE OF FAMILY RELATIONSHIPS IN FIRM, BY NUMBER OF OFFICES AT FIRM
FIRM ENCOURAGEMENT TO VOLUNTEER, BY RESIDENTIAL AND COMMERCIAL FIRMS
FIRM ENCOURAGEMENT TO VOLUNTEER, BY NUMBER OF OFFICES AT FIRM

Exhibit 4-1
FIRM ACTIVELY RECRUITING SALES AGENTS IN 2016, BY RESIDENTIAL AND COMMERCIAL FIRMS
Firms
Residential
FIRM ACTIVELYAllRECRUITING
SALES Firms
AGENTSCommercial
IN 2016Firms
BY RESIDENTIAL
47%
51%
32%
AND COMMERCIAL
46%
44% FIRMS
59%
Firm is recruiting
Firm is not recruiting
Not applicable, no sales agents
affiliated with firm
Commercial Firms
3%
5%
6%
59%
32%
Residential Firms
6%
51%
All Firms
44%
47%
0%
Firm is recruiting
10%
20%
3%
46%
30%
40%
50%
60%
70%
5%
80%
90%
100%
Not applicable, no sales agents affiliated with firm

Exhibit 4-2
FIRM ACTIVELY RECRUITING SALES AGENTS IN 2016, BY NUMBER OF OFFICES AT FIRM
FIRM ACTIVELY RECRUITING SALES AGENTS

IN 2016
BY NUMBER OF
Number of Offices
at Firm
OFFICESTwo
AToffices
FIRM Three offices
All Firms
One office
Firm is recruiting
47%
46%
Not applicable, no sales

Four oraffiliated
more offices
agents
with firm
39%
66%
53%
32%
5%
88%
5%
Three offices
81%
16%
1%
88%
10%
10% 1%
1%
2%
16%
81%
66%
Two offices
One office
32%
39%
All Firms
0%
Firm is recruiting
10%
20%
1%
53%
47%
5%
46%
30%
40%
50%
60%
70%
2%
5%
80%
90%
100%
Not applicable, no sales agents affiliated with firm

Exhibit 4-3
REASON FOR FIRM TO ACTIVELY RECRUIT SALES AGENTS, BY RESIDENTIAL AND COMMERCIAL FIRMS
Commercial
Residential
Firms SALES AGENTS
All FirmsBY
REASON FOR FIRM
TOFirms
ACTIVELY
RECRUIT
Expand into new lines of business/specialty areas
25%
14%
15%
RESIDENTIAL 10%
AND COMMERCIAL
FIRMS
Replace agents leaving firm
34%
32%
(Percentage
Distribution)
Expand into new markets
43%
32%
32%
Desire for younger agents
28%
41%
40%
80%
Growth in primary business
80%
87%
86%
87%
86%
28%
41%
40%
43%
32%
32%
10%
34%
32%
25%
14%
15%
%
Commercial Firms
25%
Residential Firms
50%
All Firms
75%
100%

Exhibit 4-4
REASON FOR FIRM TO ACTIVELY RECRUIT SALES AGENTS, BY NUMBER OF OFFICES AT FIRM
REASON FOR FIRMAllTO

ACTIVELY RECRUIT
SALES AGENTS BY NUMBER
OF
Firms One office
Two offices Three offices
OFFICES
86%
85% AT FIRM
84%
92%
89%
100%
86%new lines of
Expand into
business/specialty areas
40%
32%
32%
85%
15%
(Percentage
35% Distribution)
40%
24%
37%
27%
34%
84%
15%
15%
92%
54%
40%
41%
89%
15%
61%
62%
47%
17%
75%
61% 62%
54%
47%
50%
40%
40%
35%
32% 32%
24%
25%
37%
40% 41%
34%
27%
15%
15%
15%
15%
17%
%
All Firms
One office

Two offices
Three offices


Exhibit 4-5
EXPECTATION ON PROFITABILITY (NET INCOME) FROM ALL REAL ESTATE ACTIVITIES FROM MID2016 TO MID-2017, BY RESIDENTIAL AND COMMERCIAL FIRMS
All Firms
Residential Firms
Commercial Firms
EXPECTATION ON
FROM ALL
Increase
64% PROFITABILITY
65%(NET INCOME)
67%
Stay the sameREAL ESTATE ACTIVITIES
27%
25%
FROM27%
MID-2016 TO MID-2017
BY
Decrease
6%
6%
6%
RESIDENTIAL AND COMMERCIAL FIRMS

100%
6%
6%
6%
27%
27%
25%
64%
65%
67%
All Firms
Residential Firms
Commercial Firms
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Increase
Stay the same
Decrease

Exhibit 4-6
EXPECTATION ON PROFITABILITY (NET INCOME) FROM ALL REAL ESTATE ACTIVITIES FROM MID-2016
TO MID-2017, BY NUMBER OF OFFICES AT FIRM
EXPECTATION
(NET INCOME)
FROM
ALL
REALoffices
ESTATE
All Firms ON
OnePROFITABILITY
office Two offices
Three offices
Four
or more
64%
62%
69%
72% OF OFFICES 70%
ACTIVITIES FROM
MID-2016
TO MID-2017
BY NUMBER
AT FIRM
Increase
Stay the same
Decrease
100%
27%
6%
6%
28%
7%
7%
26% Distribution)
(Percentage
4%
4%
20%
6%
26%
2%
6%
2%
90%
80%
27%
26%
20%
26%
72%
70%
Three offices
28%
70%
60%
50%
40%
30%
64%
62%
All Firms
One office
69%
20%
10%
0%
Increase
Two offices
Stay the same
Decrease

Exhibit 4-7
EXPECTATION OF LEVEL OF COMPETITION IN THE NEXT YEAR (MID-2016 TO MID-2017)
EXPECTATION
OF LEVEL OF COMPETITION
IN THE NEXT YEAR
Traditional brick and
Non-traditional market
TOfirms
MID-2017) participants
mortar(MID-2016
firms
Virtual
17%
46%
68%
50%
4%
15%
4%
Increase
Stay the Same
100%
Decrease
90%
43%
53%
5%
5%
15%
80%
70%
50%
53%
46%
43%
Virtual firms
Non-traditional market
participants
60%
50%
68%
40%
30%
20%
10%
17%
0%
Traditional brick and mortar
firms
Increase
Stay the Same
Decrease

Exhibit 4-8
BIGGEST CHALLENGES FACING FIRM IN NEXT TWO YEARS, BY RESIDENTIAL AND COMMERCIAL FIRMS
Profitability
Keeping up with technology
Maintaining sufficient inventory
Recruiting younger agents
Local or regional economic conditions
Competition from nontraditional market participants
Competition from traditional brick and mortar firms
State and local legislation and regulation
Agent retention
Competition from new virtual firms
Off market listings (pocket listings)
Liability in a digital world (contracts, signatures, etc.)
TRID (TILA-RESPA Integrated Disclosure)
Protecting client data
Wire Fraud
Listing data security
Piracy/scraping
Industry consolidation
Drones and regulation of drones
State and local laws involving legal marijuana
All Firms
49%
48
48
36
35
35
33
28
24
21
18
18
17
15
12
11
9
6
5
4
Residential Firms
49%
49
51
39
34
37
35
26
26
23
19
19
19
16
13
12
9
6
5
3
Commercial Firms
44%
43
44
20
44
16
30
36
16
8
19
7
6
8
4
2
2
8
5
4

Exhibit 4-9
BIGGEST CHALLENGES FACING FIRM IN NEXT TWO YEARS, BY NUMBER OF OFFICES AT FIRM
Profitability
Keeping up with technology
Maintaining sufficient inventory
Recruiting younger agents
Local or regional economic conditions
Competition from nontraditional market participants
Competition from traditional brick and mortar firms
State and local legislation and regulation
Agent retention
Competition from new virtual firms
Off market listings (pocket listings)
Liability in a digital world (contracts, signatures, etc.)
TRID (TILA-RESPA Integrated Disclosure)
Protecting client data
Wire Fraud
Listing data security
Piracy/scraping
Industry consolidation
Drones and regulation of drones
State and local laws involving legal marijuana
All Firms
49%
48
48
36
35
35
33
28
24
21
18
18
17
15
12
11
9
6
5
4

One office Two offices Three offices Four or more offices
47%
50%
49%
60%
47
46
51
51
47
52
49
57
40
44
60
67
35
40
29
35
33
46
40
36
34
35
36
40
27
31
38
31
19
36
44
54
20
25
29
22
18
19
10
20
18
18
14
22
16
19
21
25
14
16
14
23
11
11
17
23
10
10
9
19
8
11
12
15
5
8
10
7
5
4
3
5
4
6
5
4

Exhibit 4-10
PREDICTION OF GENERATIONS EFFECT ON THE INDUSTRY IN THE NEXT 2 YEARS, BY RESIDENTIAL AND COMMERCIAL
FIRMS
All Firms ONResidential

Firms
Commercial
PREDICTION OF GENERATIONS EFFECT
THE INDUSTRY
IN THEFirms
NEXT
Gen Y ability to buy a home (stagnant wages, slow job
YEARS BY RESIDENTIAL AND
market, debt load, etc.)
48% COMMERCIAL
50% FIRMS
44%
Recruitment
of Gen Y and Gen X real estate professionals
46%
47%
42%
60%
Baby Boomers retiring from real estate as a profession
44%
44%
47%
Gen Y view of homeowership (sharing generation)
32%
33%
33%
Retention of Gen
30%
31%
23%
50%Y and Gen X real estate professionals
Baby
Boomers
relocating
to
other
states
in
retirement
21%
22%
21%
48%
50%
47%
47%
46%
Too many older real estate
professionals staying in the
44%
44% 44%
profession
18%
19%
14%
42%
Too many younger real estate professionals joining
16%
16%
20%
40%
32% 33% 33%
30% 31%
30%
23%
22%
21%
21%
20%
20%
18% 19%
14%
16% 16%
10%
%
Gen Y ability to Recruitment of Baby Boomers
Gen Y view of Retention of Gen Baby Boomers
buy a home
Gen Y and Gen X retiring from real homeowership Y and Gen X real relocating to
(stagnant wages,
real estate
estate as a
(sharing
estate
other states in
slow job market, professionals
profession
generation)
professionals
retirement
debt load, etc.)
All Firms
Residential Firms
Too many older

real estate
professionals
staying in the
profession
Commercial Firms
Too many
younger real
estate
professionals
joining

Exhibit 4-11
PREDICTION OF GENERATIONS EFFECT ON THE INDUSTRY IN THE NEXT 2 YEARS, BY NUMBER OF OFFICES AT FIRM
PREDICTION OF GENERATIONS
EFFECT
ON Two
THEOffices
INDUSTRY
IN THE
2 YEARS BY
All Firms
One Office
Three Offices
Four orNEXT
More Offices
Gen Y ability to buy a home (stagnant wages, slow job
NUMBER
OF
OFFICES
AT
FIRM
market, debt load, etc.)
48%
51%
42%
33%
34%
80%
Recruitment
46%
Baby Boomers retiring from real estate as
a profession
44%
74%
Gen Y view of homeowership (sharing generation)
32%
Retention
30%
70%
66%in retirement
Baby Boomers relocating to other states
21%
Too many older real estate professionals staying in the
62%
59%
profession
18%
60%
Too many younger real estate professionals joining
16%
50%
51%
48%
46%
42%
40%
43%
34%
27%
22%
59%
48%
32%
36%
18%
66%
49%
25%
40%
11%
74%
62%
23%
47%
22%
17%
16%
18%
14%
29%
11%
22%
10%
48%49%
47%
44%43%
40%
40%
40%
33%34%
34%
32% 32%
30%
25%
23%
36%
30%
27%
29%
21%22%
18%
20%
22%
22%
18%17%18%
11%
16%16%
14%
11%10%
10%
%
Gen Y ability to Recruitment of
Baby Boomers
buy a home
Gen Y and Gen X retiring from real
(stagnant wages,
real estate
estate as a
slow job market,
professionals
profession
debt load, etc.)
All Firms
One Office
Gen Y view of
homeowership
(sharing
generation)
Two Offices
Retention of Gen
Y and Gen X real
estate
professionals
Three Offices
Baby Boomers
relocating to
other states in
retirement
Too many older

real estate
professionals
staying in the
profession
Four or More Offices
Too many
younger real
estate
professionals
joining

Exhibit 4-12
FIRM EXIT PLAN, BY RESIDENTIAL AND COMMERCIAL FIRMS
Firms BY RESIDENTIAL
Residential FirmsAND Commercial
Firms
FIRM EXIT All
PLAN,
COMMERCIAL
FIRMS
Yes, have exit plan
No, do not plan on retiring
No, do not plan on leaving real
estate business
No,
do not have
an exit plan
Commercial
Firms
38%
22%
17%
39%26%
Residential Firms
38%
All Firms
38%
0%
10%
38%
22%
20%
18%
27%
39%
31%
18%
18% 18%
31%
22%
18%
22%
30%
40%
50%
18%
27%
17%
60%
70%
26%
80%
Yes, have exit plan
No, do not plan on leaving real estate business
No, do not have an exit plan
90%
100%

Exhibit 4-13
FIRM EXIT PLAN, BY NUMBER OF OFFICES AT FIRM
Number
Offices at Firm
FIRM EXIT PLAN, BY NUMBER
OFofOFFICES
AT FIRM
All Firms
38%
Yes, have exit plan

No,
doornot
planoffices
on retiring
Four
more
No, do not plan on leaving
real estate business
No, do not have an exit
plan Three offices
(Percentage
Distribution)
One office
Two
offices
Three offices
37%
49%
46%
22%
49%
24%
19%
15%
14%
17%
18%
16%
14%
14%
26%
46%26%
22%
14% 28%
28% 22%
49%
Two offices
37%
18%
All Firms
38%
17%
10%
20%
30%
22%15%
16%
One office
0%

49%
40%
Yes, have exit plan

No, do not have an exit plan
50%
60%
22%
26%
26%
70%
80%
90%
100%
No, do not plan on leaving real estate business


Exhibit 4-14
FAMILY RELATIONSHIPS IN FIRM, BY RESIDENTIAL AND COMMERCIAL FIRMS
Yes, everyone is related

Yes, relationships exist
No, there are no family
relationships
Commercial Firms
Firms
Residential
Firms BYCommercial
Firms AND
FAMILY All
RELATIONSHIPS
IN FIRM,
RESIDENTIAL
7%
6%
9%
43% COMMERCIAL
43% FIRMS
36%
50%
6%
All Firms
7%
0%
56%
36%
9%
Residential Firms
50%
56%
43%
50%
43%
10%
20%
30%
50%
40%
50%
60%
70%
80%
90%
No, there are no family relationships
100%

Exhibit 4-15
FAMILY RELATIONSHIPS IN FIRM, BY NUMBER OF OFFICES AT FIRM
FAMILY RELATIONSHIPS
IN FIRM,
BY
NUMBER
OFFICES
FIRM
All Firms
One office
Two
offices
ThreeOF
offices
FourAT
or more
offices
No, there are no family
relationships
7%
43%
(Percentage
Distribution)
9%
2%
39%
60%
*
67%
2%
66%
50%
52%
33%
32%
Four or more 2%
offices
66%
Two offices 2%
38%
39%
7%
0%
33%
60%
9%
All Firms
32%
67%
Three offices %
One office
38%
52%
43%
10%
20%
30%
50%
40%
50%
60%
70%
80%
90%
100%
No, there are no family relationships

Exhibit 4-16
TYPE OF FAMILY RELATIONSHIPS IN FIRM, BY RESIDENTIAL AND COMMERCIAL FIRMS
TYPE OF FAMILY
RELATIONSHIPS
INFirms
FIRM, BY
RESIDENTIAL
AND
All Firms
Residential
Commercial
Firms
62%
62%
57%
COMMERCIAL55%
FIRMS
55%
52%
Spouse/partner
Parent/child
Grandparent/grandchild
70%
Siblings
62%
60%
4%
18%
3%
17%
62%
55%
7%
23%
57%
55%
52%
50%
40%
30%
23%
20%
18%
10%
17%
7%
4%
3%
%
All Firms
Spouse/partner
Residential Firms
Parent/child
Siblings
Commercial Firms

Exhibit 4-17
TYPE OF FAMILY RELATIONSHIPS IN FIRM, BY NUMBER OF OFFICES AT FIRM
TYPE OF FAMILY
RELATIONSHIPS
IN FIRM, BY
NUMBER OF
OFFICES
All Firms
One office
Two offices
Three offices
Spouse/partner
62%
62% AT FIRM64%
62%
49%
Parent/child
80%
Siblings
55%
4%
18%
50%
73%
3%
4%
15%
18%
73%
60%
4%
26%
74%
6%
32%
74%
70%
62%
60%
64%
62%
62%
60%
55%
50%
49%
50%
40%
32%
30%
20%
26%
18%
10%
18%
15%
4%
4%
3%
6%
4%
%
All Firms
One office
Spouse/partner
Parent/child
Two offices
Siblings
Three offices

Exhibit 4-18
FIRM ENCOURAGEMENT TO VOLUNTEER, BY RESIDENTIAL AND COMMERCIAL FIRMS
All Firms
Residential Firms
Commercial Firms
FIRM ENCOURAGEMENT
TO VOLUNTEER,
BY RESIDENTIAL
Yes, in the local community
82%
84%
78%
Yes, at the local association of
FIRMS
REALTORS
48%
51%
40%
Yes,
90%at the state association of
84%
REALTORS 82%
80%
28%
30%
27%
Yes, at the
70%
National
Association of
REALTORS
60%
19%
21%51%
16%
48%
No,
50%do not encourage to
volunteer
15%
14%
17%
40%
30%
28%
30%
21%
19%
20%
15%
14%
AND COMMERCIAL
78%
40%
27%
16%
17%
10%
%
All Firms
Residential Firms
Commercial Firms
Yes, at the local association of REALTORS
Yes, at the state association of REALTORS
Yes, at the National Association of REALTORS
No, do not encourage to volunteer

Exhibit 4-19
FIRM ENCOURAGEMENT TO VOLUNTEER, BY NUMBER OF OFFICES AT FIRM

FIRM ENCOURAGEMENT TO VOLUNTEER,
BY NUMBER OF OFFICES AT
All Firms
One office
Two offices
Three offices
FIRM
Yes, in the local
community
Yes, at the
100%
local
association of
REALTORS
90%
Yes, at the 82%
80%
state
association of
REALTORS
70%
Yes, at the
60% Association of
National
48%
REALTORS
No,50%
do not encourage to
volunteer
40%
28%
30%
20%
82%
80%
89%
90%
95%
48%
43%
90%
75%
95%
77%
89% 65%
80%
19%
75%
28%
24%
38%
65%
46%
19%
43%
15%
16%
29%
23%
16%
52%
38%
46%
7%
2%
52%
38%
29%
24%
15%
38%
9%
77%
23%
16% 16%
9%
10%
7%
2%
%
All Firms
One office

Yes, at the state association of REALTORS
No, do not encourage to volunteer
Two offices
Three offices
Yes, at the local association of REALTORS

Yes, at the National Association of REALTORS
Methodology
In July 2016, NAR invited a random sample of 147,835 REALTORS who are executives at real estate
firms to fill out an online survey. A total of 4,567 useable responses were received for an overall
response rate of 3.1 percent. All information in this report is representative of member characteristics in
2016 while sales and lease transaction values and other statistics where noted are of calendar year
2015.
The primary measure of central tendency used throughout this report is the median the middle point
in the distribution of responses to a particular question or, equivalently, the point at which half of the
responses are above and below a particular value.
The National Association of REALTORS, The Voice for Real Estate, is Americas largest trade
association, representing 1.2 million members, including NARs institutes, societies and councils,
involved in all aspects of the real estate industry. NAR membership includes brokers, salespeople,
property managers, appraisers, counselors and others engaged in both residential and commercial real
estate.
The term REALTOR is a registered collective membership mark that identifies a real estate professional
who is a member of the National Association of REALTORS and subscribes to its strict Code of Ethics.
Working for Americas property owners, the National Association provides a facility for professional
development, research and exchange of information among its members and to the public and
government for the purpose of preserving the free enterprise system and the right to own real property.
NATIONAL ASSOCIATION OF REALTORS
RESEARCH DIVISION
The Mission of the National Association of REALTORS Research Division is to collect and disseminate
timely, accurate and comprehensive real estate data and to conduct economic analysis in order to
inform and engage members, consumers, and policymakers and the media in a professional and
accessible manner.
To find out about other products from NARs Research Division, visit www.REALTOR.org/research-andstatistics.
NATIONAL ASSOCIATION OF REALTORS
Research Division
500 New Jersey Avenue, NW
Washington, DC 20001
202-383-7518
data@realtors.org
2016 National Association of REALTORS
All Rights Reserved.
May not be reprinted in whole or in part without permission of the National Association of REALTORS.
For reprint information, contact data@realtors.org.

2016 Profile of Real Estate Firms

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2016 Profile of Real Estate Firms

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2016 Profile of Real Estate Firms

2016 LEADERSHIP TEAM

NAR RESEARCH STAFF

Caroline Van Hollen

Paul C. Bishop, Ph.D.