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Hearing Before The House Financial Services
Subcommittee on Housing and Community Opportunity
Entitled
“The Changing Real Estate Market”
Testimony of Pat Vredevoogd-Combs, ABR®, CRS®, GRI, PMN
2006 President-Elect
National Association of REALTORS®,
July 25, 2006
Competition in the Real Estate Industry
The Market Participants
There are approximately 2.6 million real estate licensees in the United States, of which approximately 1.3 million are REALTORS®. NAR members are affiliated with real estate brokerage firms that operate using every imaginable business model, including full service, limited service, “discount” (regardless of the level of service), Internet, and others. The overwhelming majority of industry participants are non-salaried, independent contractor sales agents (self-employed), 50 percent of whom are affiliated with an independent non-franchised firm. Real estate professionals have their own work ethic, work hours, marketing plans, business plans and make independent business decisions, regardless of firm affiliation. Real estate agents also manage their own clientele. Most agents’ income is commissions-based and they must rely on their own production to succeed. Office profit-sharing is rare and there are few monetary incentives to help other agents from the same company. Therefore, not only is competition intense between firms, but also within firms.
Real Estate Markets are Local
Prices Are Competitive
The U.S. Real Estate Market Cannot Be Compared with Other Countries
The Industry Offers Consumers a Wide Range of Options
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