The real estate industry pays a lot of attention to diversity and equity for our customers, but we spend less time looking at how we take care of our own.
Real estate is far more diverse than it used to be, but like nearly all industries, we have a ways to go. What's the state of diversity, equity, and inclusion in today's real estate profession? What needs to be done to improve it? And how can you do your part?
Women in Real Estate
In articles on diversity in real estate, you'll sometimes see it said that "female real estate agents dominate the industry."
But that's a matter of perspective.
It's true that women are well represented in the real estate industry at large. They make up well over half of actively employed real estate agents – depending on who you ask, the percentage is anywhere from 56.6% (according to Zippia) or to 66% (according to the NAR).
These proportions have held steady for at least a decade, but when you dig a little deeper into the participation of women in real estate, the picture is less rosy.
Female real estate agents are underpaid, underrepresented in the high-dollar worlds of commercial real estate and property management, and disproportionately absent from leadership roles.
For example, only 36.7% of commercial real estate brokers and 43% of property managers are women, numbers that haven't budged in more than 15 years.
Then there's the pay gap. It's narrowest for women who do manage to make it into leadership positions, but for everyone else, it's striking. In general, female real estate agents and brokers make 95 cents for every male real estate agent's dollar (86 cents for Asian women, 85 cents for Black women, and 80 cents for Latinx or Hispanic women).
In commercial real estate, the disparity is worse. The Commercial Real Estate Women's (CREW) Network found that while the fixed salary gap was 10%, women in general earn 56% less from commissions and bonuses than men (71% less for Black women, 73% less for Asian women, and 74% less for Hispanic/Latinx women).
Racial Diversity in Real Estate
In terms of racial representation, real estate diversity lags a bit in the overall population.
According to Zippia, non-Hispanic white agents are overrepresented (70.3% of the profession, compared to 61.6% of the general population), whereas:
- Hispanic or Latino agents are underrepresented (13% versus 18.9%)
- Asian or Pacific Islander agents are proportionately represented (6.8% versus 6.3%)
- Black agents are woefully underrepresented (5.2% versus 13.6%)
These numbers have been stable for a decade or so.
According to the NAR's 2020 statistics, real estate agents of color are making far less money than white real estate agents.
Median gross personal income for white realtors averaged at $49,400, while it was just $16,700 for Black realtors, $26,600 for Hispanic or Latino realtors, and $27,400 for Asian or Pacific Islanders.
In other words, white real estate agents gross three times as much as Black agents and almost twice as much as other people of color.
In the world of residential real estate, white realtors also close far more transactions in 2020. White agents averaged 7 deals in 2020, compared to 3 deals for Latino agents and 2 deals for Black and Asian agents. Since this is roughly proportionate to the income gap, the difference in number of deals closed likely explains the "how."
As for the "why," there's a significant difference between the median age and tenure of white realtors in comparison to realtors of color. Zippia's statistics say that the average age of a white agent is 50, while the average age for Hispanic agents is 44. More importantly, the NAR finds that white realtors have an average of 10 years' experience in the industry, which gives them an advantage over the 5 years for Asian realtors and 4 years for Black or Latino realtors.
It's possible that part of the shortfall is a difference in experience, but we shouldn't assume that's the entire issue.
Another possible contributor is that non-white agents are underrepresented in commercial real estate, where the big bucks are. While 12% of white realtors work exclusively in commercial real estate, only 3% of all non-white realtors do.
How to Promote Equity for Real Estate Agents
Change always starts with individuals. If we're saying that we need to hire more diverse agents, increase their inclusion in leadership, and close the existing pay gaps, then what can you do to work toward that goal?
Consider Your Recruiting Strategy
Although we went over the national statistics, it's worth doing a private inventory of your own brokerage firm. Do your agents' demographics reflect those of the area you serve? If not, why not?
If you're finding a mismatch, you may want to consciously recruit for diversity. Some firms have found success by targeting military veterans, who are often people of color. You can also focus on recruiting from local sources that cater to a diverse population.
If you're interviewing diverse candidates and none are making it to through the hiring process, consider your criteria and processes. Examine them for any unintended filters and consider how to correct the situation.
Examine Your Implicit Bias
There are a lot of ways the leadership of a brokerage can accidentally close out diverse agents without even meaning to. For example, when you're planning a networking event, make sure that the venue is safe and comfortable for everyone involved.
In fact, "safe and comfortable" is a good benchmark for a lot of things. As a real estate agent, you're an expert in body language and what people aren't saying. Don't forget to turn this spidey sense on your own people – do they seem comfortable or ill-at-ease? Is there a pattern to when they're uncomfortable?
What about internal pay gaps? Do you have any? Why? Consider whether there are any changes you can make to policies and criteria to create a more fair playing field and boost those lagging behind. The right performance goals and rewards are important to everyone's success!
Since minorities are more likely to enter the industry without any pre-existing professional, this can put them at a disadvantage for learning the ins and outs of your profession.
Creating a mentorship program within your brokerage can help fill this need for disadvantaged new agents. Create mentorship opportunities for established agents as well – having an experienced mentor in their corner can help minorities rise into the leadership ranks, and when they do, they'll make your brokerage stronger.
Offer CE to Close the Knowledge Gap
In addition to mentorship, you can help agents help themselves by offering continuing education and professional development courses as a perk of your brokerage. This can contribute to closing the knowledge gap that exists for minorities.
Online real estate courses like ours can be a great way to do that. They're cost-effective for you and convenient for your agents – they can learn wherever and whenever they have a few minutes. Check out our catalog today!
Written and Published by: VanEd