For many Realtors, wages don’t see much appreciation

It costs a small fortune to buy a home, but most Realtors won’t be driving to the bank in a Porsche.

Although Spokane and Kootenai counties have experienced record residential real estate price increases over the past two years — driving up sales commissions — statistics show many local Realtors are earning relatively low wages.

According to U.S. Department of Labor statistics for 2005 — when home prices went up nearly 30 percent in Kootenai County and by about 17 percent in Spokane County — Realtors in Spokane County earned gross median wages of $33,200 a year. The lower 10th percentile earned an average of $18,100 and the 25th percentile averaged $22,190 a year in gross wages.

The top 10 percent of Realtors earned an average of $66,460 in Spokane County, according to the Department of Labor.

Coeur d’Alene Realtors fared slightly better when it came to pulling down paychecks. Those Realtors earned gross median wages of $34,360 a year, with the lower 10 percent averaging $27,930 and the upper 10 percent making $99,500. Statistics are not yet available for 2006.

While information was gathered by surveying groups of agents who are considered employees, the majority of local real estate agents are independent contractors who pay a hefty chunk of fees for equipment, marketing and insurance, professionals say.

Iris Bartzen, a 16-year Realtor and sales manager of Coldwell Banker Northwest Group, said public perception doesn’t match reality when it comes to average Realtor wages. In the past two years, home prices rose by more than 40 percent in Kootenai County and by more than 30 percent in Spokane County. As the market heated up more people became Realtors, she said, adding that numbers of agents can fluctuate from 1,400 to 2,000 depending upon the market.

“When you’re in a hot market it’s pretty darned easy to sell a home. That changes when the market changes,” Bartzen said.

Realtors are required to take 60 clock hours’ worth of classes to obtain licenses. From there, some participate in additional training or internships. Every two years additional classes are required to maintain certification.

Spokane County currently has 1,902 active sales associates and 488 associate brokers working for 268 companies, said Debbie Wright, a real estate licensing manager for Washington State Department of Licensing. By contrast, in February, Spokane County had 2,168 active listings for homes.

Rob Higgins, executive director of Spokane Association of Realtors, said a number of Spokane real estate businesses are operations with 10 or fewer people. Although he doesn’t track what the top agents make, he said some earn a good income while others, including part-time workers, earn less.

“It’s like any sales business. I think the top 20 percent make most of the money,” Higgins said.

Mike Williams, a 34-year-old who started selling homes with Coldwell Banker Northwest Group in December, works nights and weekends, during his typical seven-day workweek.

Initially he hoped to make $60,000 his first year, but estimates that he might make $30,000 if he’s lucky.

“Basically my whole life revolves around trying to drum up business,” said Williams who has had two successful transactions so far.

Williams said his new job offers potential to earn more money than he did as a coordinator for a fitness club. But the downside is he lost the security of a regular payday.

“It’s nerve-wracking not knowing when your next paycheck will show up,” Williams said.

So where do the commissions, which can run about $15,000 for buying and selling a $250,000 home, end up?

Bartzen said the money is split between the listing agent and the selling company. From there, the company might pay a franchise fee of 6 to 8 percent and business and occupation tax. What’s left is split between the agent and the company.

The average Realtor might sell four homes a year with more successful agents selling about 12, she explained. Out of their income, independent contractors pay both the employer’s and employee’s shares of social security, fully fund their own medical and dental plans, and set aside money for retirement.

As someone who earned more than $100,000 for much of her career, Bartzen knows what it takes to succeed in real estate: Sell homes in varying prices ranges in every part of town, return phone calls promptly and provide “not just good but extraordinary service” so that clients are happy in the end.

The first few years are the toughest, she said, but for those who work hard, return and referral business starts to build in about the fifth year.

“You absolutely do pay your dues in real estate.”