2015 profile of real estate firms

2015 Profile of Real Estate Firms

2015 OFFICERS President Chris Polychron, CIPS, CRS, GRI President-Elect Tom Salomone First Vice President Bill Brown Treasurer Michael McGrew, CRB, CRS Immediate Past President Steve Brown, ABR, CIPS, CRS, GREEN Vice President Charlie Oppler, AWHD Vice President Mike Ford, GRI Chief Executive Officer Dale Stinton, CAE, CPA, CMA, RCE

NAR RESEARCH STAFF

Lawrence Yun, Ph.D. Chief Economist and Senior Vice President Caroline Van Hollen Senior Research and Strategic Thinking Coordinator Paul C. Bishop, Ph.D. Vice President Stephanie Davis Administrative Coordinator

Nadia Evangelou Research Economist Ken Fears Director, Regional Economics and Housing Finance Danielle Hale Director of Housing Statistics Jed Smith, Ph.D. Managing Director, Quantitative Research Scholastica Cororaton Research Economist Michael Hyman Research Data Specialist George Ratiu Director, Quantitative and Commercial Research Hua Zhong Data Analyst Jessica Lautz Director, Survey Research and Communications Meredith Dunn Research Communications Manager Brandi Snowden Research Survey Analyst Amanda Riggs Research Survey Analyst


Highlights

Characteristics of Real Estate Firms

Eighty percent of real estate firms have

a single office, typically with two full-

time real estate licensees.

Eighty-three percent of firms are

independent non-franchised firms, and

15 percent are independent franchised

firms.

Eighty-two percent of firms specialize in

residential brokerage.

Thirty-five percent of firms are LLCs, 26

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.

Business Activity of Firms

Firms with only one office had a median

brokerage sales volume of $4.1 million

in 2014, while firms with four or more

offices had a median brokerage sales

volume of $250 million in 2014 up from

$187.5 million in 2013.

Firms with one office had a total of 18

real estate transaction sides in 2014,

while firms with four or more offices

typically had 900 real estate transaction

sides in 2014 up from 790 in 2013.

Firms typically had 30 percent of their

customer inquiries from past client

referrals, 25 percent from repeat

business from past clients, and 10

percent from their website, five

percent through social media, and one

percent through open houses.

Firms typically had 35 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 one 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.

Benefits

The most common benefit that firms

offer to independent contractors,

licensees, and agents is errors and

omissions/liability insurance at 36

percent.

While this is also the most common

benefit for salaried licensees and

agents, only 25 percent have this

benefit.

Among administrative staff, 34 percent

receive vacation/sick days, 33 percent

have errors and omissions/liability

insurance, and 10 percent have health

insurance.

Forty-two percent of senior

management has errors and

omissions/liability insurance, 21

percent have vacation/sick days, and 15


percent have health insurance.

Future Outlook of Firms

Forty-four percent of firms reported

they are actively recruiting sales agents

in 2015.

Sixty-eight percent of firms expect

profitability (net income) from all real

estate activities to increase in the next

year.

Forty-five percent of firms expect

competition to increase in the next year

from non-traditional market

participants.

Forty-one percent of firms expect

competition during the same time

period to increase from virtual firms,

while only 16 percent expect

competition will increase from

traditional brick and mortar firms.

Profitability, keeping up with

technology, maintaining sufficient

inventory, and local or regional

economic conditions are among the

biggest challenges cited for firms in the

next two years.


Summary

Eighty percent of real estate firms have a single

office, typically with two full-time real estate

licensees and 82 percent specialize in

residential brokerage. Thirty-five percent of

firms are LLCs, 26 percent are sole

proprietorship, 27 percent are S-Corps, and 10

percent are C-Corps. Fifty-eight percent of firms

cover a geographic market area of a

metropolitan area or region, 29 percent cover a

rural area or small town, eight percent cover a

resort area or small town, and five 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 14 years,

while the typical commercial firm has been

operating for 20 years. Franchised firms are

typically larger companies, thus 42 percent of

firms with four or more offices are franchised

companies. Franchised firms are also more

common among residential real estate firms as

17 percent of residential firms are franchised

compared to only six percent of commercial

real estate firms.

Eighty-eighty percent of firms reported that the

number of mergers and acquisitions for the firm

has remained the same from 2004 to 2009 and

2010 to 2015. However, nine percent of firms

indicated that mergers and acquisitions have

increased in that time period

While the typical firm has two full-time real

estate licensees, larger firms reported having a

median of 125 full-time real estate licensees,

three part-time licenses who work less than 30

hours a week, nine 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 2014 and six

licensees who left their firm in the same year.

Firms with four or more offices also saw a gain

in staff who are not licensees—typically two

staff members.

The typical residential real estate firm’s

brokerage sales volume was $5.6 million in

2014, while the typical commercial real estate

firm’s brokerage sales volume was $4.4 million

in 2014. 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 $4.1

million in 2014, while those with four or more

offices had a median brokerage sales volume of

$250 million in 2014. Similarly, those with one

office had a total of 18 real estate transaction

sides in 2014, while those with four or more

offices typically had 900 real estate transaction

sides in 2014.

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, 49 percent offer relocation services, 36


percent offer business brokerage, 25 percent

offer title or escrow services in house, and 22

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, 25 percent

from repeat business from past clients, and 10

percent from their website, five percent

through social media, and one percent through

open houses. Firms typically had 35 percent of

their sales volume from past client referrals, 30

percent from repeat business from past clients,

and 10 percent from their website, and five

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 finally

virtual firms.

The most common feature on firm’s websites

are property listings, agent/staff profiles,

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-four percent of firms reported they are

actively recruiting sales agents in 2015. This is

more common among residential firms (49

percent) than commercial firms (34 percent)

and more common among firms with four

offices or more (89 percent) than firms with one

office (36 percent). Eighty-eight percent of firms

reported the reason for recruitment is growth

in primary business followed by the desire for

younger agents at 37 percent. Larger firms are

much more likely to recruit for the desire for

younger agents and to replace agents who are

leaving the firm.

Sixty-eight percent of firms expect profitability

(net income) from all real estate activities to

increase in the next year. Commercial real

estate firms are more optimistic as 75 percent

expect profitability to improve, as well as large

firms with four or more offices—79 percent

expect profitability to improve.

Forty-five percent of firms expect competition

to increase in the next year (mid-2015 to mid-


2016) from non-traditional market participants.

Forty-one percent of firms expect competition

during the same time period to increase from

virtual firms, while only 16 percent expect

competition will increase from traditional brick

and mortar firms.

Profitability, keeping up with technology,

maintaining sufficient inventory, and local or

regional economic conditions 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 Y’s

ability to buy a home due to stagnant wage

growth, a slow job market, and their debt to

income ratios—54 percent of firms cited this as

a concern. This was followed by Baby Boomers

retiring from the real estate industry and

conversely the recruitment of Gen Y and Gen X

into the real estate profession. Firms with four

or more offices were most concerned with Baby

Boomers retiring and the recruitment of Gen Y

and Gen X into the industry, both at 59 percent.

CHARACTERISTICS OF REAL ESTATE FIRMS

Exhibit 1-1 YEARS IN REAL ESTATE BUSINESSExhibit 1-2 YEARS IN REAL ESTATE BUSINESSExhibit 1-3 NUMBER OF OFFICESExhibit 1-4 NUMBER OF OFFICESExhibit 1-5 OFFICE OPENINGS AND CLOSINGSExhibit 1-6 CHANGE IN MERGERS/ACQUISITIONS FOR FIRM FROM 2004-2009 TO 2010-2015Exhibit 1-7 SHARE OF INDEPENDENT AND FRANCHISED FIRMS Exhibit 1-8 FIRM TYPE BY RESIDENTIAL AND COMMERCIAL FIRMSExhibit 1-9 FIRM TYPE BY NUMBER OF OFFICES AT FIRMExhibit 1-10 LEGAL ORGANIZATION OF REAL ESTATE FIRMSExhibit 1-11 STAFF AT FIRMS BY NUMBER OF OFFICES AT FIRMExhibit 1-12 CHANGE IN STAFF AT FIRMS BY NUMBER OF OFFICES AT FIRMExhibit 1-13 FIRM'S PRIMARY SPECIALTY AREAExhibit 1-14 PERCENT OF FIRM'S REVENUE FROM PRIMARY REAL ESTATE BUSINESS ACTIVITYExhibit 1-15 OTHER REAL ESTATE BUSINESS ACTIVITIES AMONG FIRMExhibit 1-16 GEOGRAPHIC MARKET AREA OF FIRM

2015 National Association of Realtors® Profile of Real Estate Firms


Exhibit 1-1YEARS IN REAL ESTATE BUSINESS(Percentage Distribution)

All FirmsOne year or less 7%2 to 3 years 84 to 5 years 86 to 7 years 78 to 10 years 1211 to 14 years 815 years or more 49

One year or less 7% 2 to 3 years

8%

4 to 5 years 8%

6 to 7 years 7%

8 to 10 years 12%

11 to 14 years 8%

15 years or more 50%

YEARS IN REAL ESTATE BUSINESS (Percentage Distribution)



Exhibit 1-2YEARS IN REAL ESTATE BUSINESS(Percentage Distribution)

All Firms Residential Firms Commercial FirmsOne year or less 7% 8% 6%2 to 3 years 8% 8% 4%4 to 5 years 8% 8% 3%6 to 7 years 7% 7% 7%8 to 10 years 12% 13% 13%11 to 14 years 8% 8% 6%15 years or more 49% 47% 61%

Median (years) 14 13 20

7% 8% 8% 7%

12% 8%

49%

8% 8% 8% 7%

13%

8%

47%

6% 4% 3%

7%

13%

6%

61%

%

10%

20%

30%

40%

50%

60%

70%

One year orless

2 to 3 years 4 to 5 years 6 to 7 years 8 to 10 years 11 to 14 years 15 years ormore

YEARS IN REAL ESTATE BUSINESS (Percentage Distribution)

All Firms Residential Firms Commercial Firms

Median (years):

All Firms: 14 Residential Firms: 13 Commercial Firms: 20



Exhibit 1-3NUMBER OF OFFICES(Percentage Distribution)

All Firms1 office 80%2 offices 93 offices 34 or more offices 9

1 office 79%

2 offices 9%

3 offices 3%

4 or more offices 9%

NUMBER OF OFFICES (Percentage Distribution)



Exhibit 1-4NUMBER OF OFFICES(Percentage Distribution)

All Firms Residential Firms Commercial Firms1 office 80% 78% 85%2 offices 9% 9% 10%3 offices 3% 3% 2%4 or more offices 9% 10% 3%

Median (offices) 1 1 1

80% 78%

85%

9% 9% 10%

3% 3% 2%

9% 10%

3%

%

10%

20%

30%

40%

50%

60%

70%

80%

90%


NUMBER OF OFFICES (Percentage Distribution)

1 office 2 offices 3 offices 4 or more offices

Median (offices):

All Firms: 1 Residential Firms: 1 Commercial Firms: 1



Exhibit 1-5OFFICE OPENINGS AND CLOSINGS(Medians)


Number of offices affiliated with your firm at

year-end in 2014 1 1 1Number of new offices opened in 2014 0 0 0

Number of offices acquired through purchase or

merger with another firm in 2014 0 0 0

Number of offices acquired through purchase or

merger with another firm from 2013-2008 0 0 0Number of offices closed in 2014 0 0 0



Exhibit 1-6CHANGE IN MERGERS/ACQUISITIONS FOR FIRM FROM 2004-2009 TO 2010-2015(Percentage Distribution)

All FirmsIncreased 9%Decreased 3Stayed the same 88

Increased 9% Decreased

3%

Stayed the same 88%

CHANGE IN MERGERS/ACQUISITIONS FOR FIRM FROM 2004-2009 TO 2010-2015

(Percentage Distribution)



Exhibit 1-7SHARE OF INDEPENDENT AND FRANCHISED FIRMS (Percentage Distribution)

All FirmsIndependent, non-franchised company 83%Independent, franchised company 15Subsidiary of a national or regional

corporation, franchised company 1Subsidiary of a national or regional

corporation, non-franchised company 1

Independent, non-franchised company

83%

Independent, franchised company

15%

Subsidiary of a national or regional corporation, franchised company

2%

Subsidiary of a national or regional corporation, non-franchised company

1%

SHARE OF INDEPENDENT AND FRANCHISED FIRMS (Percentage Distribution)



Exhibit 1-8FIRM TYPE BY RESIDENTIAL AND COMMERCIAL FIRMS(Percentage Distribution)

All Firms Residential Firms Commercial FirmsIndependent, non-franchised company 83% 81% 92%Independent, franchised company 15% 17% 6%

Subsidiary of a national or regional

corporation, franchised company 1% 1% 1%Subsidiary of a national or regional

corporation, non-franchised company 1% 2% 1%

* Less than 1 percent

83% 81%

92%

15% 17% 6%

1% 1% 1% 1% 2% 1%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


FIRM TYPE BY RESIDENTIAL AND COMMERCIAL FIRMS (Percentage Distribution)







Exhibit 1-9FIRM TYPE BY NUMBER OF OFFICES AT FIRM(Percentage Distribution)

All Firms One office Two offices Three offices Four or more offices

Independent, non-franchised company 83% 89% 69% 59% 46%

Independent, franchised company 15% 11% 28% 37% 42%

Subsidiary of a national or regional

corporation, franchised company 1% * 1% 2% 4%Subsidiary of a national or regional

corporation, non-franchised company 1% 1% 2% 2% 8%


Number of Offices at Firm

83% 89%

69%

59%

46%

15% 11%

37%

42%

1% % 1% 2%

4%

1% 1% 2% 2% 8%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


FIRM TYPE BY NUMBER OF OFFICES AT FIRM (Percentage Distribution)







Exhibit 1-10LEGAL ORGANIZATION OF REAL ESTATE FIRMS(Percentage Distribution)

All FirmsLLC 35%Sole proprietorship 26S-Corp 27C-Corp 10Partnership 2 LLC

35%

Sole proprietorship 26%

S-Corp 27%

C-Corp 10%

Partnership 2%

LEGAL ORGANIZATION OF REAL ESTATE FIRMS (Percentage Distribution)



Exhibit 1-11STAFF AT FIRMS BY NUMBER OF OFFICES AT FIRM(Medians)


Number of full-time real estate licensees 2 2 10 25 125Number of full-time licensees who are

independent contractors 2 2 10 24 130Number of part-time real estate

licensees (work fewer than 30 hours a

week) who are salaried 0 0 0 0 0Number of part-time licensees (work

fewer than 30 hours a week) who are

independent contractors 0 0 1 2 3

Number of full-time staff (non-licensees) 0 0 1 3 9

Number of part-time staff (non-

licensees) 0 0 0 0 1Number of part-time staff (non-

licensees) who work fewer than 30

hours a week 0 0 0 0 1




Exhibit 1-12CHANGE IN STAFF AT FIRMS BY NUMBER OF OFFICES AT FIRM(Medians)


Number of licensees who joined firm

in 2014 0 0 2 4 15

Number of licensees who left firm in

2014 0 0 1 1 6

Number of staff (non-licensees) who

joined firm in 2014 0 0 0 0 2

Number of staff (non-licensees) who

left firm in 2014 0 0 0 0 1




Exhibit 1-13FIRM'S PRIMARY SPECIALTY AREA(Percentage Distribution)

All FirmsAuction *International *Counseling *Relocation 1%Commercial Appraisal 1%Commercial Property Management 1%Land/Development 1%Residential Appraisal 2%Commercial Brokerage 4%Residential Property Management 7%Residential Brokerage 82%


1%

1%

1%

1%

2%

4%

7%

82%

% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Auction

International

Counseling

Relocation

Commercial Appraisal

Commercial Property Management

Land/Development

Residential Appraisal

Commercial Brokerage

Residential Property Management

Residential Brokerage

FIRM'S PRIMARY SPECIALTY AREA (Percentage Distribution)



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

All FirmsNone *1 to 4 percent *5 to 10 percent 1%11 to 20 percent 1%21 thru 50 percent 4%51 thru 75 percent 11%76 thru 100 percent 83%

Median (percent) 98%


1% 1% 4%

11%

83%

%

10%

20%

30%

40%

50%

60%

70%

80%

90%

None 1 to 4 percent 5 to 10percent

11 to 20percent

21 thru 50percent

51 thru 75percent

76 thru 100percent

PERCENT OF FIRM'S REVENUE FROM PRIMARY REAL ESTATE BUSINESS ACTIVITY (Percentage Distribution) Median:

All Firms: 99%



Exhibit 1-15OTHER REAL ESTATE BUSINESS ACTIVITIES AMONG FIRM(Percent of Respondents)

All FirmsCommercial Appraisal 2%Auction 4%International 6%Residential Appraisal 6%Counseling 10%Commercial Property Management 11%Land/Development 16%Relocation 19%Residential Brokerage 28%Residential Property Management 37%Commercial Brokerage 41%

2%

4%

6%

6%

10%

11%

16%

19%

28%

37%

41%

% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Commercial Appraisal

Auction

International

Residential Appraisal

Counseling

Commercial Property Management

Land/Development

Relocation

Residential Brokerage

Residential Property Management

Commercial Brokerage

OTHER REAL ESTATE BUSINESS ACTIVITIES AMONG FIRM (Percent of Respondents)



Exhibit 1-16GEOGRAPHIC MARKET AREA OF FIRM(Percentage Distribution)

All FirmsMetropolitan area or region 58%Rural area/Small town 29Resort/Recreation area 8Multi-state area 5

Nationwide 1

Metropolitan area or region

57%

Rural area/Small town 29%

Resort/ Recreation area 7%

Multi-state area 5% Nationwide

1%

GEOGRAPHIC MARKET AREA OF FIRM (Percentage Distribution)


BUSINESS ACTIVITY OF FIRMS

Exhibit 2-1 FIRM'S REAL ESTATE BROKERAGE SALES VOLUME BY RESIDENTIAL AND COMMERCIAL FIRMS, 2014Exhibit 2-2 FIRM'S REAL ESTATE BROKERAGE SALES VOLUME BY NUMBER OF OFFICES AT FIRM, 2014Exhibit 2-3 FIRM'S TOTAL REAL ESTATE TRANSACTION SIDES BY RESIDENTIAL AND COMMERCIAL FIRMS, 2014Exhibit 2-4 FIRM'S TOTAL REAL ESTATE TRANSACTION SIDES BY NUMBER OF OFFICES AT FIRM, 2014Exhibit 2-5 ANCILLARY SERVICES OFFERED AT FIRMS BY NUMBER OF OFFICES AT FIRMExhibit 2-6 ANCILLARY SERVICES OFFERED AT FIRMS TO TYPES OF CLIENTS Exhibit 2-7 PERCENT OF NET REVENUE OF FIRM MADE ON ANCILLARY SERVICES BY NUMBER OF OFFICES AT FIRMExhibit 2-8 PERCENT OF CUSTOMER INQUIRIES GENERATED FROM SOURCESExhibit 2-9 PERCENT OF FIRM'S SALES VOLUME WAS GENERATED BY SOURCEExhibit 2-10 WHERE DOES CURRENT COMPETITION COME FROMExhibit 2-11 FEATURES ON FIRM'S WEBSITE BY RESIDENTIAL AND COMMERICAL FIRMSExhibit 2-12 FIRM PROVIDES OR ENCOURAGES AGENT/BROKER USE OF SPECIFIC SOFTWARE, BY RESIDENTIAL AND COMMERCIAL FIRMSExhibit 2-13 FIRM PROVIDES OR ENCOURAGES AGENT/BROKER USE OF SPECIFIC SOFTWARE, BY NUMBER OF OFFICES AT FIRM



Exhibit 2-1FIRM'S REAL ESTATE BROKERAGE SALES VOLUME BY RESIDENTIAL AND COMMERCIAL FIRMS, 2014(Percentage Distribution)

Residential Firms Commercial FirmsNo transactions 4% 1%Less than $5 million 44% 56%$5 million to under $10 million 16% 14%$10 million to under $25 million 12% 14%$25 million to under $50 million 7% 6%$50 million to under $100 million 4% 4%$100 million to under $250 million 4% 3%$250 million to under $500 million 2% 2%$500 million to under $1 billion 2% *$1 billion or more 2% *

Median (millions) $5.6 $4.4


4%

44%

16%

12%

7%

4%

4%

2%

2%

2%

1%

56%

14%

14%

6%

4%

3%

2%

%

%

% 10% 20% 30% 40% 50% 60%

No transactions

Less than $5 million

$5 million to under $10 million






$500 million to under $1 billion

$1 billion or more

FIRM'S REAL ESTATE BROKERAGE SALES VOLUME BY RESIDENTIAL AND COMMERCIAL FIRMS, 2014


Commercial Firms Residential Firms

Median (millions):

Residential Firms: $5.6 Commercial Firms: $4.4



Exhibit 2-2FIRM'S REAL ESTATE BROKERAGE SALES VOLUME BY NUMBER OF OFFICES AT FIRM, 2014(Percentage Distribution)

One office Two offices Three offices Four or more offices

No transactions 6% 1% * 2%Less than $5 million 54% 24% 9% 7%$5 million to under $10 million 16% 13% 10% 7%$10 million to under $25 million 11% 19% 23% 9%$25 million to under $50 million 6% 14% 11% 6%$50 million to under $100 million 3% 11% 11% 7%$100 million to under $250 million 2% 9% 22% 12%$250 million to under $500 million 1% 5% 6% 12%$500 million to under $1 billion 1% 5% 6% 12%$1 billion or more 1% 3% 5% 12%

Median (millions) $4.1 $19.5 $43.2 $250.0



6%

54%

16%

11%

6%

3%

2%

1%

1%

1%

1%

24%

13%

19%

14%

11%

9%

5%

5%

0

9%

10%

23%

11%

11%

22%

6%

6%

5%

2%

7%

7%

9%

6%

7%

12%

12%

12%

12%

% 10% 20% 30% 40% 50% 60%

No transactions

Less than $5 million







$500 million to under $1 billion

$1 billion or more

FIRM'S REAL ESTATE BROKERAGE SALES VOLUME BY NUMBER OF OFFICES AT FIRM, 2014


Four or more offices Three offices Two offices One office

Median (millions): One Office: $4.1 Two Offices: $19.5 Three Offices: $43.2 Four or More Offices: $250.0

3%



Exhibit 2-3FIRM'S TOTAL REAL ESTATE TRANSACTION SIDES BY RESIDENTIAL AND COMMERCIAL FIRMS, 2014(Percentage Distribution)

Residential Firms Commercial FirmsNo transactions 5% 3%1 to 10 23% 43%11 to 20 16% 24%21 to 30 10% 10%31 to 40 5% 3%41 to 50 5% 6%51 to 100 12% 4%101 to 250 11% 3%251 to 500 5% 3%501 to 1000 4% 1%1001 or more 6% 1%

Median 28 12

5%

23%

16%

10%

5%

5%

12%

11%

5%

4%

6%

3%

43%

24%

10%

3%

6%

4%

3%

3%

1%

1%

% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

No transactions

1 to 10

11 to 20

21 to 30

31 to 40

41 to 50

51 to 100

101 to 250

251 to 500

501 to 1000

1001 or more

FIRM'S TOTAL REAL ESTATE TRANSACTION SIDES BY RESIDENTIAL AND COMMERCIAL FIRMS, 2014


Commercial Firms Residential Firms

Median:

Residential Firms: 28 Commercial Firms: 12



Exhibit 2-4FIRM'S TOTAL REAL ESTATE TRANSACTION SIDES BY NUMBER OF OFFICES AT FIRM, 2014(Percentage Distribution)

One office Two offices Three offices Four or more officesNo transactions 8% 1% 3% 3%1 to 10 29% 9% 4% 4%11 to 20 17% 8% 3% 2%21 to 30 11% 8% * 2%31 to 40 5% 4% 3% 2%41 to 50 5% 4% 4% 3%51 to 100 11% 19% 9% 5%101 to 250 9% 18% 30% 11%251 to 500 3% 13% 12% 10%501 to 1000 2% 10% 22% 11%1001 or more 1% 6% 13% 48%

Median 18 10 225 900



8%

29%

17%

11%

5%

5%

11%

9%

3%

2%

1%

1%

9%

8%

8%

4%

4%

19%

18%

13%

10%

6%

3%

4%

3%

%

3%

4%

9%

30%

12%

22%

13%

3%

4%

2%

2%

2%

3%

5%

11%

10%

11%

48%

% 10% 20% 30% 40% 50% 60%

No transactions

1 to 10

11 to 20

21 to 30

31 to 40

41 to 50

51 to 100

101 to 250

251 to 500

501 to 1000

1001 or more

FIRM'S TOTAL REAL ESTATE TRANSACTION SIDES BY NUMBER OF OFFICES AT FIRM, 2014


Four or more offices Three offices Two offices One office

Median: One Office: 18 Two Offices: 10 Three Offices: 225 Four or More Offices: 900



Exhibit 2-5ANCILLARY SERVICES OFFERED AT FIRMS BY NUMBER OF OFFICES AT FIRM(Percentage Distribution)

Offer this service

in-house

Offer this service

outsourced or with a

business relationship

Do not currently

offer this service

Do not currently

offer this service,

but plan to in the

future

Business brokerage 32% 7% 54% 7%

Relocation services 16 15 60 9

Home improvement 5 24 63 7

Mortgage lending 5 39 50 6

Home warranty 4 43 46 6

Title or escrow services 4 36 54 7

Homeowners insurance 2 28 62 7

Settlement services 3 27 63 7

Other insurance 2 19 72 8

Home inspection 1 36 56 6

Moving services 1 21 70 8

Securities services * 7 84 9One office

Business brokerage 30% 7% 56% 7%Relocation services 13 14 64 9Home improvement 5 24 63 7Mortgage lending 3 37 54 7Home warranty 4 41 49 7Title or escrow services 2 34 57 7Homeowners insurance 1 27 65 7Settlement services 2 26 65 7Other insurance 1 17 74 8Home inspection 2 36 56 6Moving services 1 19 72 8Securities services * 6 85 8Two offices

Business brokerage 36% 11% 47% 6%Relocation services 22 21 49 8Home improvement 4 30 60 6Mortgage lending 5 46 44 4Home warranty 4 51 40 6Title or escrow services 5 41 49 6Homeowners insurance 1 34 59 6Settlement services 3 33 58 6Other insurance 1 27 65 8Home inspection 1 39 55 5Moving services 1 27 66 7Securities services 8 11 79 9

Three offices

Business brokerage 36% 8% 55% 2%Relocation services 27 15 53 5Home improvement 3 24 67 6Mortgage lending 10 45 39 6Home warranty 7 44 44 6Title or escrow services 8 37 46 9Homeowners insurance 6 26 57 11Settlement services 6 29 60 5Other insurance 3 18 71 8Home inspection * 35 60 5Moving services * 18 76 7Securities services 3 3 90 3Four or more offices

Business brokerage 36% 8% 50% 6%Relocation services 49 16 30 5Home improvement 4 15 73 8Mortgage lending 22 51 23 4Home warranty 7 60 29 4Title or escrow services 25 34 36 5Homeowners insurance 8 31 52 10Settlement services 15 29 50 5Other insurance 5 18 69 9Home inspection * 26 66 8Moving services 1 24 66 9Securities services 1 4 84 11




Exhibit 2-6ANCILLARY SERVICES OFFERED AT FIRMS TO TYPES OF CLIENTS (Percent of Respondents)

Offer this service in-

house to current clients

Offer this service in-

house to past clients

Do not currently

offer this service

Business brokerage 23% 12% 71%

Relocation services 12% 10% 79%

Home improvement 8% 10% 82%

Mortgage lending 10% 12% 80%

Home warranty 10% 11% 80%

Title or escrow services 9% 10% 81%

Homeowners insurance 6% 8% 85%

Settlement services 7% 8% 84%

Other insurance 4% 6% 86%

Home inspection 6% 8% 84%

Moving services 4% 6% 87%

Securities services 1% 3% 91%

23%

12%

8%

10%

10%

9%

6%

7%

4%

6%

4%

1%

12%

10%

10%

12%

11%

10%

8%

8%

6%

8%

6%

3%

71%

79%

82%

80%

80%

81%

85%

84%

86%

84%

87%

91%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

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

ANCILLARY SERVICES OFFERED AT FIRMS TO TYPES OF CLIENTS (Percent of Respondents)

Offer this service in-house to current clients Offer this service in-house to past clients

Do not currently offer this service



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

All Firms One office Two offices Three offices Four or more officesNone 55% 59% 48% 51% 25%1 to 4 percent 9% 8% 15% 15% 18%5 to 10 percent 17% 15% 25% 17% 26%11 to 20 percent 6% 6% 6% 13% 12%21 to 50 percent 6% 5% 2% * 16%51 to 75 percent 1% 1% * 2% 1%

76 to 100 percent 6% 7% 4% 2% 1%

Median (percent) * * 1 * 5



55%

59%

48%

51%

25%

9%

8%

15%

15%

18%

17%

15%

25%

17%

26%

6%

6%

6%

13%

12%

6%

5%

2%

16%

1%

1%

2%

1%

6%

7%

4%

2%

1%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

All Firms

One office

Two offices

Three offices

Four or moreoffices

PERCENT OF NET REVENUE OF FIRM MADE ON ANCILLARY SERVICES BY NUMBER OF OFFICES AT FIRM


None 1 to 4 percent 5 to 10 percent 11 to 20 percent

21 to 50 percent 51 to 75 percent 76 to 100 percent



Exhibit 2-8PERCENT OF CUSTOMER INQUIRIES GENERATED FROM SOURCES(Medians)

All Firms One office Two offices Three offices Four or more officesPast client referrals 30% 30% 30% 25% 30%Repeat business from past clients 25% 25% 30% 25% 27%Website 10% 10% 15% 15% 15%Social Media 5% 5% 10% 9% 5%Open house 1% * 5% 5% 5%Other 10% 8% 10% 10% 10%



30%

25%

10%

5%

1%

10%

30%

25%

10%

5%

8%

30% 30%

15%

10%

5%

10%

25% 25%

15%

9%

5%

10%

30%

27%

15%

5% 5%

10%

%

5%

10%

15%

20%

25%

30%

35%

Past client referrals Repeat business frompast clients

Website Social Media Open house Other

PERCENT OF CUSTOMER INQUIRIES GENERATED FROM SOURCES (Medians)




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

All Firms One office Two offices Three offices Four or more officesPast client referrals 35% 38% 30% 25% 30%Repeat business from past clients 30% 30% 30% 30% 30%Website 10% 10% 10% 10% 10%Social Media 5% 5% 5% 5% 5%Open house 1% * 5% 5% 5%Other 10% 10% 10% 10% 10%



35%

30%

10%

5%

1%

10%

38%

30%

10%

5%

10%

30% 30%

10%

5% 5%

10%

25%

30%

10%

5% 5%

10%

30% 30%

10%

5% 5%

10%

Past client referrals Repeat business frompast clients

Website Social Media Open house Other

PERCENT OF FIRM'S SALES VOLUME WAS GENERATED BY SOURCE (Medians)




Exhibit 2-10WHERE DOES CURRENT COMPETITION COME FROM(Medians)

All Firms One office Two offices Three offices Four or more officesTraditional brick and mortal firms 90% 90% 90% 90% 90%Non traditional market participants 10% 10% 5% 7% 5%Virtual firms 5% 5% 5% 5% 5%


90% 90% 90% 90% 90%

10% 10%

5%

7%

5% 5% 5% 5% 5% 5%


WHERE DOES CURRENT COMPETITION COME FROM (Medians)

Traditional brick and mortal firms Non traditional market participants Virtual firms



Exhibit 2-11FEATURES ON FIRM'S WEBSITE BY RESIDENTIAL AND COMMERICAL FIRMS(Percent of Respondents)

Commercial Firms Residential Firms All FirmsLink to commercial information exchange (CIE) 22% 4% 5%Live agent chat 1% 7% 7%Appointment scheduler 4% 17% 16%

Current mortgage rates 6% 20% 19%Links to real estate service providers 11% 21% 20%Home valuation/comparative market analysis tools 10% 28% 26%Links to mortgage lenders' websites 10% 33% 30%Links to state/local government websites 24% 37% 35%School reports 13% 47% 43%Virtual tours 17% 47% 44%Customer reviews/testimonials 40% 52% 50%Community information/demographics 33% 59% 55%

Information about the home buying and selling process 19% 62% 57%Mortgage/financial calculators 26% 64% 59%

Agent/staff profiles 71% 79% 78%Property listings 90% 96% 95%

5%

7%

16%

19%

20%

26%

30%

35%

43%

44%

50%

55%

57%

59%

78%

95%

4%

7%

17%

20%

21%

28%

33%

37%

47%

47%

52%

59%

62%

64%

79%

96%

22%

1%

4%

6%

11%

10%

10%

24%

13%

17%

40%

33%

19%

26%

71%

90%

% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Link to commercial information exchange (CIE)

Live agent chat

Appointment scheduler

Current mortgage rates

Links to real estate service providers

Home valuation/comparative market analysis tools

Links to mortgage lenders' websites

Links to state/local government websites

School reports

Virtual tours

Customer reviews/testimonials

Community information/demographics

Information about the home buying and selling process

Mortgage/financial calculators

Agent/staff profiles

Property listings

FEATURES ON FIRM'S WEBSITE BY RESIDENTIAL AND COMMERICAL FIRMS (Percent of Respondents)




Exhibit 2-12FIRM PROVIDES OR ENCOURAGES AGENT/BROKER USE OF SPECIFIC SOFTWARE, BY RESIDENTIAL AND COMMERCIAL FIRMS(Percent of Respondents)

All Firms Residential Firms Commercial FirmsMultiple listing 86% 88% 79%Comparative market analysis 80 83 69Electronic contracts/form 78 81 68E-signature 73 77 53Contact management 52 55 47Document preparation/Management 52 53 42Transaction management 35 37 30Social media management tools 35 37 22Graphics/Presentation 33 34 38

Home visualization (e.g. virtual tours or virtual staging) 31 34 12Customer relationship management 31 33 28Property management 26 21 31Video 27 29 16QR Code 21 22 9Marketing automation 18 20 7Loan analysis 16 17 19Agent rating 10 11 3



Exhibit 2-13FIRM PROVIDES OR ENCOURAGES AGENT/BROKER USE OF SPECIFIC SOFTWARE, BY NUMBER OF OFFICES AT FIRM(Percent of Respondents)

All Firms One office Two offices Three offices Four or more officesMultiple listing 86% 85% 88% 85% 91%Comparative market analysis 80 80 80 83 86Electronic contracts/form 78 76 84 86 89

E-signature 73 71 81 87 90Contact management 52 48 68 75 82

Document preparation/Management 52 49 63 69 72Transaction management 35 31 48 59 63Social media management tools 35 30 44 54 64Graphics/Presentation 33 29 42 54 60

Home visualization (e.g. virtual tours or virtual staging) 31 27 41 48 57Customer relationship management 31 27 43 55 62Property management 26 25 31 25 31Video 27 23 39 47 64QR Code 21 18 29 34 45Marketing automation 18 15 28 28 48Loan analysis 16 15 20 17 26Agent rating 10 8 12 20 26



BENEFITS

Exhibit 3-1 BENEFITS RECEIVED BY INDEPENDENT CONTRACTORS/LICENSEES/AGENTSExhibit 3-2 BENEFITS RECEIVED BY SALARIED LICENSEES/AGENTSExhibit 3-3 BENEFITS RECEIVED BY ADMINISTRATIVE STAFFExhibit 3-4 BENEFITS RECEIVED BY SENIOR MANAGEMENT


BENEFITS

Exhibit 3-1BENEFITS RECEIVED BY INDEPENDENT CONTRACTORS/LICENSEES/AGENTS(Percentage Distribution)

Employee Pays Firms Pays Both Pay Not Offered

Dental care 11% 1% 1% 88%Disability insurance 8 2 * 90Errors and Omissions (E&O)

Insurance/Liability Insurance 27 36 18 19Health insurance 17 2 1 80Life insurance 9 1 * 91Long-term care insurance 10 * * 90Pension plan/401(k)/SEP 9 1 1 90Vacation/sick days 9 2 * 89Vision care 10 1 1 89

*Less than 1 percent


BENEFITS

Exhibit 3-2BENEFITS RECEIVED BY SALARIED LICENSEES/AGENTS(Percentage Distribution)


Dental care 7% 2% 2% 89%Disability insurance 6 3 1 90Errors and Omissions (E&O)

Insurance/Liability Insurance 11 25 7 58Health insurance 9 4 4 83Life insurance 6 1 1 93Long-term care insurance 6 1 1 92Pension plan/401(k)/SEP 5 1 3 91Vacation/sick days 5 11 1 84

Vision care 6 1 2 91


BENEFITS

Exhibit 3-3BENEFITS RECEIVED BY ADMINISTRATIVE STAFF(Percentage Distribution)



Insurance/Liability Insurance 4 33 3 60Health insurance 9 10 9 73Life insurance 6 3 2 89Long-term care insurance 6 2 2 90

Pension plan/401(k)/SEP 6 3 7 84

Vacation/sick days 3 34 1 62



BENEFITS

Exhibit 3-4BENEFITS RECEIVED BY SENIOR MANAGEMENT(Percentage Distribution)



Insurance/Liability Insurance 9 42 5 44Health insurance 9 15 7 70Life insurance 7 8 2 84Long-term care insurance 8 3 2 88Pension plan/401(k)/SEP 7 4 6 83Vacation/sick days 5 21 1 74



FUTURE OUTLOOK OF FIRMS

Exhibit 4-1 FIRM ACTIVELY RECRUITING SALES AGENTS IN 2015 BY RESIDENTIAL AND COMMERCIAL FIRMSExhibit 4-2 FIRM ACTIVELY RECRUITING SALES AGENTS IN 2014 BY NUMBER OF OFFICES AT FIRMExhibit 4-3 REASON FOR FIRM TO ACTIVELY RECRUIT SALES AGENTS BY RESIDENTIAL AND COMMERCIAL FIRMSExhibit 4-4 REASON FOR FIRM TO ACTIVELY RECRUIT SALES AGENTS BY NUMBER OF OFFICES AT FIRM

Exhibit 4-5

EXPECTATION ON PROFITABILITY (NET INCOME) FROM ALL REAL ESTATE ACTIVITIES FROM MID-2015 TO MID-

2016 BY RESIDENTIAL AND COMMERCIAL FIRMS

Exhibit 4-6

EXPECTATION ON PROFITABILITY (NET INCOME) FROM ALL REAL ESTATE ACTIVITIES FROM MID-2015 TO MID-

2016 BY NUMBER OF OFFICES AT FIRMExhibit 4-7 EXPECTATION OF LEVEL OF COMPETITION IN THE NEXT YEAR (MID-2015 TO MID-2016) Exhibit 4-8 BIGGEST CHALLENGES FACING FIRM IN NEXT TWO YEARS BY RESIDENTIAL AND COMMERCIAL FIRMSExhibit 4-9 BIGGEST CHALLENGES FACING FIRM IN NEXT TWO YEARS BY NUMBER OF OFFICES AT FIRMExhibit 4-10 PREDICTION OF GENERATIONS EFFECT ON THE INDUSTRY IN THE NEXT 2 YEARS BY RESIDENTIAL AND COMMERCIAL FIRMSExhibit 4-11 PREDICTION OF GENERATIONS EFFECT ON THE INDUSTRY IN THE NEXT 2 YEARS BY NUMBER OF OFFICES AT FIRM



Exhibit 4-1FIRM ACTIVELY RECRUITING SALES AGENTS IN 2015 BY RESIDENTIAL AND COMMERCIAL FIRMS(Percentage Distribution)

All Firms Residential Firms Commercial FirmsFirm is recruiting 44% 49% 34%Firm is not recruiting 52% 48% 63%Not Applicable 5% 2% 4%

44%

49%

34%

52%

48%

63%

5%

2%

4%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

All Firms

Residential Firms

Commercial Firms

FIRM ACTIVELY RECRUITING SALES AGENTS IN 2015 BY RESIDENTIAL AND COMMERCIAL FIRMS


Firm is recruiting Firm is not recruiting Not Applicable



Exhibit 4-2FIRM ACTIVELY RECRUITING SALES AGENTS IN 2014 BY NUMBER OF OFFICES AT FIRM(Percentage Distribution)

All Firms One office Two offices Three offices Four or more officesFirm is recruiting 44% 36% 71% 78% 89%Firm is not recruiting 52% 59% 28% 20% 9%Not Applicable 5% 5% 1% 2% 2%


44%

36%

71%

78%

89%

52%

59%

28%

20%

9%

5%

5%

1%

2%

2%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

All Firms

One office

Two offices

Three offices

Four or more offices

FIRM ACTIVELY RECRUITING SALES AGENTS IN 2015 BY NUMBER OF OFFICES AT FIRM (Percentage Distribution)

Firm is recruiting Firm is not recruiting Not Applicable



Exhibit 4-3REASON FOR FIRM TO ACTIVELY RECRUIT SALES AGENTS BY RESIDENTIAL AND COMMERCIAL FIRMS(Percentage Distribution)

All FirmsResidential FirmsCommercial FirmsGrowth in primary business 88% 89% 85%Desire for younger agents 37% 37% 28%Replace agents leaving firm 33% 34% 17%Expand into new markets 32% 32% 36%Expand into new lines of business/specialty areas 13% 12% 40%

88%

37%

33%

32%

13%

89%

37%

34%

32%

12%

85%

28%

17%

36%

40%

% 25% 50% 75% 100%

Growth in primary business

Desire for younger agents

Replace agents leaving firm

Expand into new markets

Expand into new lines of business/specialty areas

REASON FOR FIRM TO ACTIVELY RECRUIT SALES AGENTS BY RESIDENTIAL AND COMMERCIAL FIRMS


Commercial Firms Residential Firms All Firms



Exhibit 4-4REASON FOR FIRM TO ACTIVELY RECRUIT SALES AGENTS BY NUMBER OF OFFICES AT FIRM(Percentage Distribution)

All Firms One office Two offices Three offices Four or more officesGrowth in primary business 88% 87% 87% 89% 91%Desire for younger agents 37% 31% 38% 47% 57%Replace agents leaving firm 33% 24% 39% 47% 61%Expand into new markets 32% 26% 37% 42% 41%Expand into new lines of

business/specialty areas 13% 13% 16% 11% 11%


88% 87% 87% 89%

91%

37%

31%

38%

47%

57%

33%

24%

39%

47%

61%

32%

26%

37%

42% 41%

13% 13% 16%

11% 11%

%

25%

50%

75%

100%


REASON FOR FIRM TO ACTIVELY RECRUIT SALES AGENTS BY NUMBER OF OFFICES AT FIRM


Growth in primary business Desire for younger agents

Replace agents leaving firm Expand into new markets

Expand into new lines of business/specialty areas



Exhibit 4-5


All Firms Residential Firms Commercial FirmsIncrease 68% 69% 75%Stay the same 27% 25% 22%Decrease 6% 6% 3%

EXPECTATION ON PROFITABILITY (NET INCOME) FROM ALL REAL ESTATE ACTIVITIES FROM MID-

2015 TO MID-2016 BY RESIDENTIAL AND COMMERCIAL FIRMS

68% 69% 75%

27% 25% 22%

6% 6% 3%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


EXPECTATION ON PROFITABILITY (NET INCOME) FROM ALL REAL ESTATE ACTIVITIES FROM MID-2015 TO MID-2016 BY

RESIDENTIAL AND COMMERCIAL FIRMS (Percentage Distribution)

Increase Stay the same Decrease



Exhibit 4-6


All Firms One office Two offices Three offices Four or more officesIncrease 68% 66% 68% 74% 79%Stay the same 27% 28% 27% 21% 18%Decrease 6% 6% 5% 5% 3%


EXPECTATION ON PROFITABILITY (NET INCOME) FROM ALL REAL ESTATE ACTIVITIES FROM MID-2015

TO MID-2016 BY NUMBER OF OFFICES AT FIRM

68% 66% 68% 74%

79%

27% 28% 27% 21%

18%

6% 6% 5% 5% 3%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


EXPECTATION ON PROFITABILITY (NET INCOME) FROM ALL REAL ESTATE ACTIVITIES FROM MID-2015 TO MID-2016 BY NUMBER OF OFFICES AT

FIRM (Percentage Distribution)

Increase Stay the same Decrease



Exhibit 4-7


Traditional brick and

mortar firms Virtual firms

Non-traditional

market participantsIncrease 16% 41% 45%Stay the Same 70% 54% 49%Decrease 15% 5% 6%

EXPECTATION OF LEVEL OF COMPETITION IN THE NEXT YEAR (MID-2015 TO MID-

2016)

16%

41% 45%

70%

54% 49%

15%

5% 6%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Traditional brick and mortarfirms

Virtual firms Non-traditional marketparticipants

EXPECTATION OF LEVEL OF COMPETITION IN THE NEXT YEAR (MID-2015 TO MID-2016)


Increase Stay the Same Decrease



Exhibit 4-8BIGGEST CHALLENGES FACING FIRM IN NEXT TWO YEARS BY RESIDENTIAL AND COMMERCIAL FIRMS(Percent of Respondents)

All Firms Residential Firms Commercial FirmsProfitability 51% 51% 46%Keeping up with technology 46 47 53Maintaining sufficient inventory 46 49 37Local or regional economic conditions 37 37 43Competition from nontraditional market participants 36 38 19Recruiting younger agents 34 37 29State and local legislation and regulation 33 31 35Competition from traditional brick and mortar firms 32 34 30Competition from new virtual firms 22 23 13Agent retention 22 24 12Off market listings (pocket listings) 19 21 17Liability in a digital world (contracts, signatures, etc.) 18 18 11Protecting client data 14 15 13Listing data security 13 13 10Piracy/scraping 10 11 5Industry consolidation 6 6 11Drones and regulation of drones 5 5 1



Exhibit 4-9BIGGEST CHALLENGES FACING FIRM IN NEXT TWO YEARS BY NUMBER OF OFFICES AT FIRM(Percent of Respondents)

All Firms One office Two offices Three offices Four or more officesProfitability 51% 50% 53% 54% 58%Keeping up with technology 46 47 46 43 42Maintaining sufficient inventory 46 45 48 39 54Local or regional economic conditions 37 37 42 35 33

Competition from nontraditional market participants 36 35 40 35 44Recruiting younger agents 34 29 52 47 61State and local legislation and regulation 33 32 38 40 34Competition from traditional brick and mortar firms 32 31 32 39 38Competition from new virtual firms 22 21 24 28 25Agent retention 22 17 38 39 49Off market listings (pocket listings) 19 19 18 15 26

Liability in a digital world (contracts, signatures, etc.) 18 18 21 15 18Protecting client data 14 14 20 10 20Listing data security 13 12 18 10 18Piracy/scraping 10 9 17 11 15Industry consolidation 6 6 7 13 7Drones and regulation of drones 5 4 8 1 6




Exhibit 4-10

(Percent of Respondents)

All Firms Residential Firms Commercial FirmsGen Y ability to buy a home (stagnant wages, slow job

market, debt load, etc. ) 54% 57% 39%Baby Boomers retiring from real estate as a profession 41% 41% 46%Recruitment of Gen Y and Gen X real estate professionals 38% 39% 35%Gen Y view of homeowership (sharing generation) 35% 35% 27%Baby Boomers relocating to other states in retirement 24% 24% 23%Retention of Gen Y and Gen X real estate professionals 24% 25% 18%

PREDICTION OF GENERATIONS EFFECT ON THE INDUSTRY IN THE NEXT 2 YEARS BY RESIDENTIAL AND COMMERCIAL

FIRMS

54%

41%

38%

35%

24% 24%

57%

41% 39%

35%

24% 25%

39%

46%

35%

27%

23%

18%

%

10%

20%

30%

40%

50%

60%

Gen Y ability to buy ahome (stagnantwages, slow job

market, debt load,etc. )

Baby Boomersretiring from real

estate as aprofession

Recruitment of Gen Yand Gen X real estate

professionals

Gen Y view ofhomeowership

(sharing generation)

Baby Boomersrelocating to other

states in retirement

Retention of Gen Yand Gen X real estate

professionals

PREDICTION OF GENERATIONS EFFECT ON THE INDUSTRY IN THE NEXT 2 YEARS BY RESIDENTIAL AND COMMERCIAL FIRMS





Exhibit 4-11PREDICTION OF GENERATIONS EFFECT ON THE INDUSTRY IN THE NEXT 2 YEARS BY NUMBER OF OFFICES AT FIRM(Percent of Respondents)

All Firms One Office Two Offices Three Offices Four or More OfficesGen Y ability to buy a home (stagnant wages, slow job

market, debt load, etc. ) 54% 55% 49% 47% 50%Baby Boomers retiring from real estate as a profession 41% 39% 46% 52% 59%Recruitment of Gen Y and Gen X real estate professionals 38% 34% 47% 60% 59%Gen Y view of homeowership (sharing generation) 35% 35% 35% 35% 27%Baby Boomers relocating to other states in retirement 24% 24% 20% 15% 20%Retention of Gen Y and Gen X real estate professionals 24% 21% 29% 29% 44%


54%

41%

38%

35%

24% 24%

55%

39%

34% 35%

24%

21%

49%

46% 47%

35%

20%

29%

47%

52%

60%

35%

15%

29%

50%

59% 59%

27%

20%

44%

%

10%

20%

30%

40%

50%

60%

70%

Gen Y ability to buy ahome (stagnant wages,slow job market, debt

load, etc. )

Baby Boomers retiringfrom real estate as a

profession

Recruitment of Gen Yand Gen X real estate

professionals

Gen Y view ofhomeowership (sharing

generation)

Baby Boomersrelocating to other

states in retirement

Retention of Gen Y andGen X real estate

professionals

PREDICTION OF GENERATIONS EFFECT ON THE INDUSTRY IN THE NEXT 2 YEARS BY NUMBER OF OFFICES AT FIRM


All Firms One Office Two Offices Three Offices Four or More Offices



Methodology In July 2015, NAR invited a random sample of 138,669 REALTORS® who are executives at real estate firms to fill out an online survey. A total of 4,555 useable responses were received for an overall response rate of 3.3 percent. All information in this report is representative of member characteristics in 2015 while sales and lease transaction values and other statistics where noted are of calendar year 2014.

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.

2015 profile of real estate firms

Documents