Diversity in Real Estate: Active Measures to Promote Equality for Agents

Fostering Inclusivity: Strategies to Promote Diversity in Real Estate

Real estate professionals get comprehensive training in diversity and equity regarding their clients. But is that same amount of attention given to promoting equality among colleagues?

The real estate profession has made great strides toward diversity, but it’s far from perfect. It's time to take stock. Where does today's real estate industry stand in relation to diversity, equity, and inclusion? Where can we make progress? In this article, we’ll answer these questions and discover how your brokerage can contribute.

Race in the Real Estate Industry

When it comes to racial and ethnic diversity, the real estate industry doesn't quite measure up to our country as a whole. Minorities also earn less, partially because they're underrepresented in leadership and in more lucrative sectors.

Racial Diversity in Real Estate

Racial diversity in real estate has been stable for a decade or so, and agents from racial minorities are still underrepresented in comparison to non-Hispanic white agents.

Specifically, non-Hispanic white agents comprise 70.3% of the industry but make up 61.6% of the general population. Asian/Pacific Islander agents are proportionate, more or less: 6.8% of the industry and 6.3% of the population.

Other people of color are underrepresented. Roughly 13% of agents are Hispanic or Latino, while they make up 18.9% of the overall population. Black representation is worse – 5.2% of agents when it should be closer to 13.6%.

Racial Equity in Real Estate

In addition to differences in representation, white real estate agents make far more money than agents of color.

According to the NAR's 2020 data, the median gross personal income for non-Hispanic white realtors was $49,400. That's three times more than Black agents and nearly twice the income of other people of color – Black realtors average $16,700, Hispanic or Latino realtors $26,600, and Asian/Pacific Islander realtors $27,400.

One explanation for the gap lies in the number of transactions closed. In 2020, white residential realtors averaged seven properties, while Hispanic/Latino agents closed three, and Black and Asian/Pacific Islander realtors averaged two. The gap in deals closed is consistent with the income gap, so that may be one area where you can support your agents of color.

Some of this difference may be explained by the fact that minorities tend to be younger, with half as much experience as white realtors. According to Zippia's statistics, white agents have an average age of 50, while Hispanic/Latino agents have an average age of 42 (with Asian and Black agents somewhere between). This gap persists in experience – according to the NAR, white realtors have an average tenure of 10 years, while Asian realtors average five and Black and Hispanic/Latino realtors average four.

Racial Inclusiveness in Real Estate

Racial minorities are underrepresented in both leadership roles and commercial real estate.

According to the NAR, 12% of white realtors work exclusively in the commercial sector, while only 3% of non-white realtors do. This may contribute to the pay gap since commercial real estate is far more lucrative than residential.

Real estate leadership also has a racial inclusiveness problem. Most leaders at the industry and brokerage levels are white, which gives them greater earnings and greater control over policies and trends.

Women in Real Estate

Articles on real estate diversity like to say that female real estate agents are "dominating" the industry.

This is a misleading claim.

These days, women have been well-represented among actively employed real estate agents for at least a decade. Employment website Zippia puts the percentage of female agents at 56.6%, while the NAR's membership is 66% female.

On the other hand, women lag behind in pay, leadership, and participation in lucrative real estate specialties.

Pay gaps are nearly equal for women who make it into leadership roles, but that's a disproportionately small number. In general, female real estate agents make 95 cents to the male dollar, but these numbers are worse for women of color (86 cents for Asian women, 85 cents for Black women, and 80 cents for Hispanic/Latina women).

In commercial real estate, the pay gap is worse – the Commercial Real Estate Women's (CREW) Network found a 10% gap in fixed salary and a 56% gap in commissions and bonuses.

On a related note, women are also underrepresented among the ranks of commercial real estate brokers and property managers – two of the most lucrative areas of real estate. Only 36.7% of commercial brokers and 43% of property managers are female. It's been that way for over 15 years.

Ways to Promote Equity Among Real Estate Agents

When you look at all the data, it's clear that – as an industry – we need to hire more diverse real estate agents, encourage diversity within our leadership, and close existing pay gaps.

But how can your brokerage firm start working toward those goals right now?

It Starts With Recruitment

We saw the national statistics above – how do you measure up? A good goal is to have a brokerage whose demographics match the area that it serves.

If your agents don't reflect your potential client base, you should look at your recruitment practices and consider how you could hire for more diversity. One method is to connect with local organizations that cater to a diverse population.

If the bottleneck for diverse recruits is happening at the hiring stage, you should rethink your hiring criteria and processes. Do any of the steps unintentionally filter out non-traditional candidates? Is there a way you can make the process more fair?

Look at Your Own Implicit Bias

It’s important to examine your own unconscious biases even after the hiring process is over. There may be aspects of your work routine, such as choosing a specific location for networking events or the type of humor that's employed, that can make someone feel uncomfortable.

Pay attention to the signals your employees may be giving off. Do they ever seem uncomfortable? Look for patterns and consider the cause. Ask respectful questions and make it clear that your intention is to help them feel welcome in your business.

Aside from social faux pas, another area to analyze are your policies that determine pay. Assess the pay rate across your organization and look for internal pay gaps. Try to see beyond the first explanation for these pay gaps and consider whether compensation criteria match your business's goals. There may be adjustments you can make that will reward the right behaviors and create a level playing field.

Encourage Mentoring Relationships

Minorities can be at a disadvantage when they enter your profession when they lack connections in and familiarity with the industry. Some parts of the business that you may consider common knowledge or common sense are, in reality, things you learned through experience that others may not have.

You can help disadvantaged new agents at your brokerage by creating a mentorship program that pairs new hires with experienced agents to get a good start.

But mentorship relationships can also be useful for helping minorities on their path to leadership roles. Leadership diversity will strengthen your brokerage, so you have a vested interest in helping them get there.

Provide Continuing Education (CE) to Level the Field

Mentorship is a great way to close the knowledge gap, but it can only go so far. Providing CE and professional development courses as a perk at your brokerage can support agents from non-traditional backgrounds by giving them the chance to self-educate in areas where they feel they need it.

Online, self-paced courses are an efficient solution for you and a convenient one for your agents. They can learn from anywhere with an internet connection.

As a provider of online real estate CE, we have a full catalog of state-approved real estate courses. Talk to us about business plans and bulk rates today!