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Does Previous Sales Experience Matter?

Today, we are again honored to have Ken H. Johnson, Ph.D. — Florida International University (FIU) and Editor of the Journal of Housing Research as our guest blogger. To view other research from FIU, visit http://realestate.fiu.edu/. The KCM Crew

The Research

Is it possible to predict who will be a high commission income earner in real estate sales?  Are there traits that can be identified that indicate the potential of an individual prior to their entering the industry?  Does past experience influence future success in the industry?  At first glance, there do not appear to be clear answers to these questions.  Although most within real estate have strong opinions on who will make it and who will not, there has been no scientific evidence to this point to support these speculations. 

In forthcoming research to be published in the Journal of Housing Research, Anderson, Byrd, and Hurst[1] bring new light to this age old question.  Using NAR survey data from 2008, the authors find that those entering real estate as a first career and those with prior work experience in retail/sales outperform others, on average.  To the contrary, prior professions such as education, healthcare, office/administrative support, and government/military/protective services actually have negative effects on commission income relative to the agent force as a whole.

Implications for Practice

Given these results, it appears that prior training, other than in sales, is detrimental to agent earnings.  In fact, it seems that an open mind to the process is beneficial.  Additionally, prior selling experience sends a clear signal of potential future success.

So, what does this do for managers/broker?  For the first time, managers/brokers have a tool to help them pick a better agent force, no more following hunches.  How about for those considering entering the industry?  The findings in Anderson, Byrd, and Hurst suggest that if you are a retiring teacher, government worker, healthcare professional, or have other entrenched experience, you are better off to enter the industry with an open mind and be willing to learn the industry from the ground up.  Trying to bring past experiences to the selling process probably will not help and lead to frustration, lower productivity and eventual failure.  Finally, though not directly investigated in the research, past selling experience seems to create the ability to recognize and respond to a “closing opportunity”. This rare skill set seems to directly translate into earning and is probably rarely found in professions outside of sales.  Perhaps, this lack of an ability to “take the order” drives the results and explains why others, on average, do not do as well.


[1] Anderson, R.I., A.K. Byrd, and M.E. Hurst, Earnings of Real Estate Salespersons with Prior Experience, Journal of Housing Research, (Forthcoming).

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3 replies
  1. Mr. K
    Mr. K says:

    RJ, a really good salesperson IS a consultant!
    This article is one giant NO DUH, Captain Obvious! What Designated Broker with one modicum of sense doesn’t already know that SUCCESSFUL sales experience is an important determinant of future success in real estate sales versus non-sales experience? What is an even bigger clue is successful experience in Outside sales. Some people are good at sales when the customer comes in to a store looking to purchase something, but they could be lousy at going out into the community and HUNTING for business. If you aren’t a “hunter” in real estate, then you most likely will fail. You don’t need to have a doctorate to know that truth….


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