Every year, RealTrends chooses GameChangers based on five-year, transaction side percentage data from the RealTrends 500. This year, we chose seven independent brokerage firms and 10 franchises who grew their businesses at astronomical rates.
In analyzing this list of top-growth brokerages, these GameChangers grew their brokers in multiple different ways. From mergers and acquisitions to recruiting and coaching and retention.
For Steve Houle, a second-year GameChanger and CEO of Coldwell Banker Island Properties in Hawaii, buying a real estate brokerage wasn’t something he planned to do. According to an article in Inc. Magazine, he “transitioned from entrepreneur to serial entrepreneur 20 years ago. He never thought he would own a franchise, but since purchasing the Coldwell Banker franchise in Maui in August 2017, he is now completely on board with the benefits of a network.”
RealTrends spoke with Houle, whose firm grew 225% by transaction side percentage between 2017 and 2021, about his firm:
Tracey Velt: What was your biggest aha moment or lesson learned while building your firm?
Steve Houle: As a non-Realtor and new to the brokerage business, it certainly appeared at the outset to be about numbers — number of agents specifically. However, in other businesses, I’m a big believer that company culture beats strategy almost every time.
I have walked away from acquisitions where I felt the cultures would not fit well together, and I was surprised to learn how applicable that is for real estate brokerages. I learned that agent culture is absolutely paramount in this business.
Coldwell Banker Island Properties is very careful to add only agents who will add to our ohana or family, in a positive and professional manner, and we’ve signed off some who didn’t.
It is not just a numbers game — our agents share best practices with each other, support each other, use our tools and training, participate in community support initiatives, and we have great parties!
Tracey Velt: In the past five years, what percentage of your growth was organic (recruiting or increasing agent productivity) and what percentage was M&A?
Steve Houle: We acquired 7 brokerages during the past 5 years, representing approximately 40% of our total growth. The remaining 60% is organic by way of increased agent productivity and significant recruiting activity — including over $720 million in TTM (trailing 12-month) volume recruited in 2021.
Separately from our brokerage volume growth, we acquired several property management firms during this period and successfully launched our mortgage origination and title & escrow businesses.
Tracey Velt: Moving forward, what is your main focus for growth?
Steve Houle: We are focused on driving a deep integration in what we refer to as our real estate ecosystem, which encompasses our brokerage and ancillary businesses — short-term and long-term property management, mortgage origination and title & escrow.
I believe there is a real likelihood of a significant slowdown in transaction volume, so our ancillary businesses will be critical to being able to continue to support our agents with the level of support to which they have become accustomed and deserve.
At the same time, our brokerage volume is the main engine for this ecosystem, so we continue to recruit professional agents who fit our company culture. We also remain focused on helping our newer agents become more productive by way of extensive training, marketing support, and lead generation. As markets potentially slow in Q3 and Q4, we will search for accretive acquisitions within our existing markets.
I believe there is more reason than ever for smaller brokerages to join with larger ones to take advantage of scale in back office and marketing activities, and to reduce their exposure to declining sales volumes or even recession.