2 to 1, agents to brokers. That’s the current ratio. “Back to normal,” says first tuesday. You betcha. The 5 to 1 ratio – from the “good old days” (?) when you could get a real estate license if you were breathing, are long LONG gone. Thank the gods.

“When you compare the number of newly-licensed real estate brokers to the number of newly-licensed agents, the data show that for every two newly-licensed sales agents there will be approximately one newly-licensed broker. Newly licensed brokers come, in approximately equal numbers, from the ranks of current agents and from unlicensed professionals. Approximately 25 percent of newly-licensed agents will become brokers, and they are most likely to do so between 12 and 18 months after getting their agent’s license. Those who are not initially sales agents may also qualify to become brokers by virtue of their education or profession.

The current ratio of two agents for each broker is a recent shift back to historic norms, from the abnormally high number of agents in the boom years. Through most of the 2000s, until the real estate market crash in October 2007, a ratio of 5 agents to every 1 broker was the temporary expectation. This unsustainably high ratio was fueled by high home sales, high home prices, and rampant speculation. In the absence of these distorting factors, the real estate profession now reflects a more natural balance between brokers and their sales agents.

From: first tuesday Journal Online — P.O. Box 20069, Riverside, CA 92516.

Leave a Reply