The well-known 80/20 rule in real estate has driven how agents perceive the success of their colleagues: 20% of agents close 80% of the deals. 

New data released by CoreLogic/Cotality, and examined by noted industry researcher Mike DelPrete, contradicts this commonly held notion, however, and shows that the ratio is actually closer to 65/20.  

According to DelPrete, this new finding is important for agents because it examines the scope of the real estate industry and highlights that it’s not as concentrated as once thought, meaning there is a large number of agents who each produce only a small volume of transactions. 

Agent productivity 

The data, which covers 85% of the market, or 840,000 agents and 3.4 million transactions, indicates that the top 1% of agents, including high-production teams, do “an astonishing” 18% of deals, DelPrete said. He noted that a deal closed by a team is typically credited to just one agent, making it impossible to differentiate between individuals and teams in the data 

In addition, agent productivity varies widely, meaning simple averages do not tell the complete story. The top 20% of agents are averaging 26 transactions per year, while the remaining 80% of agents are averaging just 3.5 transactions per year. 

One of the truisms of residential real estate is that there are a large number of low-producing agents, DelPrete noted, adding that this belief holds up, even during down markets. In fact, he said, the number of low-producing agents actually increases during down markets. 

The bottom line is that while the 80/20 rule about agent productivity is close, it’s not ironclad.  

“In addition to a small, elite group of high-performing agents and teams, there is an extremely long tail of low-producing, part-time agents,” DelPrete said. 

This begs the question for anyone looking to work with agents, particularly brokerages, portals and tech vendors: Do you go after the high-production elite or the low-production masses?