Professional Designations - REALTORS® Enhancing Their Value

By Kevin Roth, Senior Economist and Manager of Industry Surveys

Real Estate Outlook - September 2001 ~ Reviewed 2005

Today's real estate professionals are well educated. Both advanced education and professional development enable REALTORS® to increase their productivity, while at the same time provide better service to their clients. Some of the industry's top practitioners continue to build knowledge through additional coursework, and combine it with years of experience to earn a REALTOR® designation. These designations not only enhance a real estate professional's value to customers but also can improve their income potential. Income is positively related to both the attainment of education and earning REALTOR® designations.

September is REALTOR® Designations Awareness Month. This issue of Real Estate Outlook presents a brief overview of the value of both education and continuing education for the top real estate practitioners. Information is based on data from the 2001 NATIONAL ASSOCIATION OF REALTORS® Member Profile, and looks at the prevalence of education and professional development among REALTORS® as well as the relationship of both education and professional development on agent productivity.

Education

Today's REALTOR® is better educated compared to predecessors in the industry and with the general population in the United States. In 2001, virtually all real estate professionals held a high school diploma, while 46 percent also had earned a Bachelor's degree. According to 2000 U.S. Census data (the year of the latest available information), 84 percent of the adult population at least 25 years old had earned a high school degree, with 26 percent of Americans also earned a Bachelor's degree.

For both REALTORS® and the general population, these figures are significantly up. In 1978, just a third of real estate sales agents held a Bachelor's degree. In 2001, 41 percent of real estate agents held a Bachelor's degree. Broker tend to have a greater level of education. In 1978, 42 percent of real estate brokers held a Bachelor's degree; by 2001, this percentage had risen to 51 percent. During the same year, 66 percent of employed adult Americans held a high school diploma while 16 percent had earned a Bachelor's degree.

Further, some REALTORS® earned advanced degrees at levels slightly higher than that of the general American population. Eleven percent of REALTORS® earned some sort of graduate degree, including a MBA, a Ph.D., or a law degree. Another eight percent of REALTORS® have taken some graduate-level courses. In 2000, nine percent of American adults earned a graduate degree.

Education and Income

Not surprisingly, there is a positive relationship between education attainment and income. REALTORS® with at least a Bachelor's degree earned 30 percent more in 2000 than their counterparts who did not finish a four-year degree. However, the income gap between those holding Bachelor's degrees compared to those who do not is wider for the general American population. Americans who held a Bachelor's degree in 2000 earned 86 percent more than did Americans who did not attain a degree from a four-year college.

One reason why the income gap by education attainment may be smaller for REALTORS® is that they did not major in college in an area directly related real estate estate brokerage. Of those REALTORS® with at least a Bachelor's degree, just three percent had a degree that specialized in real estate issues while REALTORS® who are college graduates did no study a field that was associated directly, they all tend to benefit from their education attainment. The 30 percent income differential may be the result of improved communication skills, sharer critical thinking, and enhanced time management expertise.

Designations

Through continuing education and experience, REALTORS® can earn designations that signal to consumers of a real estate professional's expertise in real estate transactions. There are a variety of designation and certification programs from the affiliates, societies, councils, and specialty section of the NATIONAL ASSOCIATION OF REALTORS®. Some of these designations highlight an agent's expertise in fields like commercial brokerage, property management, and appraising. Last year, the NATIONAL ASSOCIATION OF REALTORS® launched its latest certificate: e-Pro. Real Estate agents and brokers hold the e-Pro certificate have the necessary skills to serve consumers using the emerging Internet technologies.

Thirty-three percent of REALTORS® hold at least one designation awarded from one of NAR's affiliated institutes, societies, and councils. The most widely held designations are GRI, CRS, and ABR. Twenty-two percent of REALTORS® report be Graduates, REALTOR® Institute (GRI). Twelve percent of REALTORS® are Certified Residential Specialists, which signifies that the real estate professional specializes in listing properties, selling, and investing, as well as mortgage financing and computer applications. REALTORS® are able to earn a CRS designation through the Residential Sales Council. Ten percent of REALTORS® are an Accredited Buyer Representative (ABR). The ABR designation, which is the only nationally recognized designation for buyer's agents, is available through the Real Estate Buyer's Agent Council.

Similar to education, there is a positive relationship between holding a REALTOR® designation and income. In 2000, the typical REALTOR® holding at least one REALTOR® designation earned $70,400. 48 percent higher than the median for all REALTORS®. Sales agents holding a designation earned $55,100, or nearly double of that earned by REALTORS® without any designation. Brokers with one or more designations earned $83,600, or 29 percent more than REALTORS® who did not hold a REALTOR® designation.

Conclusion

Real estate professionals, much like others in the working world, benefit from education. The NATIONAL ASSOCIATION OF REALTORS® encourages its members to continue build their knowledge and expertise through designations that signify to consumers the real estate professional's expertise in the real estate transaction.