Here’s How it’s Happening in the Single-Family Real Estate Brokerage Business.

Implications: Consider these thoughts. The average annual sales volume per agent for this company was almost $ 3.7 million in 2005.  Each seat then at the average 72 agent office generated over $ 180,000 in gross fees at the average 5 % fee Long and Foster generated last year.  The average agent carried away almost $ 130,000 gross fees before the agent’s expenses of marketing and administration.  Further calculations show that the average cost per seat on the company side is close to the remainder this year.  Since about 20 % of the sales force usually do about 80 % of the business, if true for Long and Foster that leaves the lesser almost 15,000 agents about $ 45,000 gross income to maintain a business and a lifestyle.  Pretty slim pickings in a record market.  Read heavy turnover and training expenses here.  It looks like gross commissions are going to go down from where they are now too.  This company looks like it’s going to retrench.  Huge as it is, this company employed about 1.5%% of the nation’s real estate agents.  The table in the article tells us that there is a real estate agent for every 222 people in the United States. Long and Foster also tells us about the mixed results with its mortgage company and home insurer and the beginnings of its call center and Spanish web site.

Analysis:

Sometimes you get lucky and a significant player in the real estate business tells how it’s done at his company.  I grant you that participation in the national associations will give you data that everyone shares in the interest of advancing the particular industry.  I know too that the public companies must open up as directed.  And you can sneak around on the periphery to assemble information and draw your conclusions.  But this is an opportunity to review the operations of a company with 18,000 agents in 250 offices operating in 7 contiguous eastern seaboard states.  The wise man might take a snapshot here to compare to the future results of this company to see if there are lessons to be learned.  I’ll bet they do things on the retrenching side quicker than they said to Forbes.