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Consumers often use the term real estate agent and REALTOR® interchangeably. Actually there are differences, even though both are licensed to sell real estate in their respective jurisdictions. REALTORS® must be licensed and belong to the National Association of REALTORS® (NAR) as well as their state and local associations. In addition, they must subscribe to the REALTOR® Code of Ethics
Are the majority of licensed real estate brokers and salespersons REALTORS®?
I did some digging into the statistical reports generated by NAR and my subscription to the ARELLO Digest (Association of Real Estate License Law Officials) and came up with these numbers:
Brokers: 710,216 (brokers and associate brokers)
Salespersons: 1,334,589
Unclassified: 83,904 (included in some state totals but not identified as sales or brokers)
NAR Membership (5/31/12): 981,892 (down 3.49% from 5/31/2011 but increase over last month)
The NAR statistics give a clear breakdown of membership state by state along with increases/decreases over the prior month/year. The ARELLO Digest also reports jurisdiction by jurisdiction although the numbers were somewhat hard to work with because the numbers for inactive licensees and firms had to be removed. Also, some of the state counts were prior to 2011.
So, I ask, are the majority of licensed real estate brokers and salespersons REALTORS®? It is close, but the answer is No.
Based on my unofficial count (and I welcome clarifying input), I estimate that 46% of the licensed real estate brokers and salespersons in the U.S. are also REALTORS®.
Are you seeing any trend in your area that reflect an increase or decrease in the number of active real estate licensed brokers and salespersons?
By John Reilly
RealTown, Director
John – interesting information. I’ve been encouraging NAR members who refer to themselves as “Realtor” or “realtor” to review the usage requirements for the REALTOR(R) mark and start using it properly, but it appears to fall on deaf ears.
John, I am sure NAR will applaud your efforts and encourage others to do likewise. It seems that compliance with the trademark rules is a continual issue for NAR.
For a collection of the rules and guidelines, see http://www.realtor.org/logos-and-trademark-rules
John, I think you’ll find that a lot of the non NAR members have their license “parked” at a referral company as they do very little work in real estate or may be retired.
A great many member firms got a 2nd brokerage license just to have a referral company. Those licensees then refer business to active Realtors and are paid a 15 or 20% referral fee. The licensee has to pay their own licensing fee and usually some kind of annual fee to keep their license active and “parked” at a referral company.
Good point, Fred. There’s even a special name – Limited Function Referral Only (LFRO)
http://www.referralagentsoftexas.com/faqs/
Yes there are a lot if people with their licenses with a referral company. Dependent on the state there are different rules regarding education and lots more. I am licensed in 2 states so that throws your numbers off as well. Where I am located there are large numbers of non-MLS companies whose agents are not Realtors as well as a large number of commercial companies’ agents are not either. Regarding the referal ppercentage, I think you are low in your estimate.
New Jersey now has a specific referral license where that’s all they can do. They are not allowed public contact or to perform any duties of a full licensee and function through referral companies as Fred described above. Since these people do not have to adhere to our new continuing education requirements a lot of the “hangers on” went referral and Board membership took the hit. After 4 years the referral licensees must complete continuing education for all four years or start over going back to school as a new agent would.
No mystery, fred21 is absolutely right. There are lots of folk around here with licenses in referral companies.
Back in the 80′s it was said they were going to pass a law that you would be born with a real estate license, and would have to take a test to get rid of it.
Hey Malcolm, I recall the old jokes about getting your real estate license right after you driver license. Incidentally, I wonder how many of the “active” licensees are actually “active” in selling real estate these days.
I believe there are those who have not fared well recently in real estate because of the economy and the conditions that prevail. Many could not afford the annual dues for NAR. However, though they are still apprised of the
code of ethics they are basically realtors who fall into the category of having to do referrals until they can once again afford their annual dues. It stands to reason that this would be the case in many areas.
The percentage seems like it should be much higher to me because we probably have a fair number of property managers with licenses and commercial real estate agents who are not members of NAR. In my area (Cupertino) there is a small number of ‘non-residential’ licensees who have joined the local AORs and CAR and NAR, but not that many overall.
In Maryland, many agents in the DC area are licensed in MD, VA, and DC. In the northern and western parts of the state many have either a WV, PA, or DE as well as the MD license. Our referral agents in MD are not seperated from any other licensee by the Real Estate Commission, and the commission includes inactive agents in the licensee count since they also pay the license fees.
ARELLO relies on each jurisdiction to supply the figures of the number of real estate licenses issued. You thus have enough variations in categorizing licenses that would drive a statistician bonkers – multiple licenses, associates, active/inactive, firms, etc. The NAR figures are easier to interpret as they are based on individual membership as recorded by NAR.
How do the percentages compare to 5 or 10 years ago—is there a decreasing trend or are the percentages comparable? There have always been licensees that were non members—many were also not active in the profession. They held a license, thats all. Yes membership has decreased, but how does that compare to pre-boom percentages?? (Of course Illinois % will be skewed due to a huge license transition in the worst downturn in decades–timing is everthing!) Active real estate agents in our area are still Realtor members—we have always had a small number of commercial licensees that are not interested in the Code of Ethics. That remains the same.
CAN YOU EMAIL ME THE STATE BY STATE BREAKDOWN OF NAR MEMBERSHIP? DOES ARELLO HAVE A SIMILAR BREAKDOWN?