DETERMINANTS OF REAL ESTATE AGENT INCOME

Abstract

The attributes that differentiate high income real estate agents from low income real estate agents are of interest to practically all who are involved in the real estate industry. While it is apparent that some basic attributes have an effect on the level of success to a real estate agent, the extent of these factors on income from real estate agency work is less apparent. An empirical human capital earnings model is developed from a survey of real estate agents conducted in January 2004. In seeking to explain earnings of real estate agents, this study expands previous studies by measuring several additional human capital components. The central part of the paper analyses via multiple regression analysis 11 factors thought to determine real estate agents success as measured by income from real estate activities. The most important findings include: (1) number of hours worked is positively linked to income; (2) income increases substantially with years of experience in the early years of careers; and (3) appearance of an agent is closely linked to income. Suggestions on how to utilise the findings regarding those variables related to income, as well as those not related, are also discussed in this dissertation.