We all know top-producing agents. We see their ads everywhere. Their signs are in yards throughout the market. But how many of them are there? How narrow is that pyramid?
It turns out that it is very narrow, indeed. Looking at 100,000+ agents from markets around the country who had a least one closing during the prior year, let’s group them by their total 12 month closings – for example we’ll have a group which closed $1M – $2M during that time frame. When we plot the number of agents in each group we get a chart which looks like this.
This graph (officially known as a histogram) shows that the number of agents at higher production levels declines at an exponential rate. In fact, if we remove the nearly 20% of agents who posted zero production during the year, the graph describes a nearly perfect exponential curve.
What does this mean for the rarity of high producers? Imagine that we took 100 agents who had at least one closing during the 12 months from May 2017-April 2018 and put them all on two Greyhound buses, making them board in order of how many dollars they closed during May 2018 – April 2019.
The front half of the first bus would be filled by agents without a single closing. The rest of that first bus would be filled by agents who closed less than $1M. Halfway through filling the second bus we would still only be at $3M. Each of the last 4 agents in line, the last row, would have closed more than $10M with the very last agent posting $27M.
The figure of 48% of agents doing less than $1M per year in closings is especially stark when you remember that we are only considering agents who had some production in the prior 12 months. If we were to look at all licensees the proportion who produce less than $1M would likely rise to nearly 2/3. Unproductive agents are more than common – they are the norm.
Agents who produce more than $10M per year in closings comprised less than 6% of the total pool of agents who had a closing the last 2 years. $20M agents are around 1.5% of that pool. Rare indeed!