04/25/2024
Real Estate Broker-Model Comparison Going Into The Shift
I firmly believe that the industry will go through an enormous contraction in agent count over the next 3 years decimating some of the current models - specifically those most broker-centric (C21, CB, etc). Those companies historically have had the least favorable compensation splits for agents, and if they aren't literally handing deals out on a weekly basis there value will be critically diminished. The ones most likely to survive will be those that have some profit/revenue/earnings model that will be distributed out to agents in multi-tier models.
Models like KW & EXP have already proven to have the systems in place to expand and sustain. They've experienced growing pains and survived. Both of these companies have brought innovation, education, and compensation to the agent community and have changed people's lives for the better. The unfortunate thing about being the biggest is that you're often the easiest target.
I see big growth from companies like REAL & LPT and I see agents I highly respect as smart business people joining both companies. Q2 2024 will be the biggest test so far for both of these companies, as they are both at their highest agent counts to date, and are going into the busiest. A great compensation plan is wonderful ... and unachievable ... if closings are lost to poor, slow, outdated methods to paperwork processing. (EXP took a big hit early on for this.) If the systems are there to serve the agents at a high level, and get things done in a timely manner, and the compensation model is favorable, these companies could be a force to reckon with in the coming years.
The other model that's growing significantly right now, and is not being talked about a lot, is the independent full service brokerage. These companies are small, have elite connections, already negotiate their fee daily, and are more tech-enabled than ever before. They have professional marketing and are no longer scared of social media. 3 years ago a commercial firm wouldn't be able to keep up with a lead source of residential leads. They wouldn't have been able to sift through those leads and serve their current commercial clients. Today that's a different story. They can hire good agents, and feed them tons of solid qualified high end clients, shutting the average residential agent out before they got started. This will be a much larger % of the broker model makeup than we've seen in the last 30 years.
I don't see any company winning the race without advanced tech systems. The ability to serve the company agents at the highest levels will not be possible without AI, IDX feeds, Secure Processing, Automations for every possible scenario, etc. It's not going to be a matter of IF a company builds this out, it will just be a matter of who did it best.