Real EstateBrokerageTrends

Special report: Secrets of high-growth real estate brokerage firms

In the study, Keller Williams had the most firms that qualified, with 50, followed by RE/MAX with 18, Sotheby’s with 9 and independents with 8.

Real estate companies grow in many ways: sales volume, transactions sides, agent count, agent productivity and mergers and acquisitions, to name a few. Many firms excel in one or two forms of growth, yet struggle with — or don’t put a high focus — on those other growth activities.

Only a few companies excel in all growth strategies. In fact, in this entire report, only two firms did so.

RealTrends examined data from 2011 through year-end 2020 — a 10-year period. Our sources were the RealTrends 500 and Nation’s Best rankings, which cover the largest residential brokerage firms in the United States that closed more than 500 transaction sides, along with 10-year data from the National Association of Realtors (NAR) housing sales and membership studies and other proprietary RealTrends data collected over the past 30 years regarding commission revenue and other factors.

We then inquired of the 100 best-performing brokerage firms as to the methods, strategies and tactics they used to achieve their results. Twenty firms responded to our questionnaire.

What was measured:

  • Growth in Agent count
  • Growth in Closed Transaction Sides
  • Growth in Closed Sales Volume
  • Growth in Agent Productivity

There were 731 of the largest brokerage firms in the country who we had complete data on for calendar years 2011 and 2022. The firms represented on the study included brokerages from every business model and state, virtually every nationally branded real estate enterprise and independent brokerage firms.

During the period of the study, according to the National Association of Realtors data:

  • The number of Realtors grew 49%
  • The number of Closed Transactions grew 41.1%
  • The total Closed Volume of housing sales grew 119.9%
  • Average productivity was essentially flat
  • The total of gross commission revenues grew 101.5% (Source: RealTrends commission data analysis)

We used this data to compare the success of the brokerage firms.

1200x650_Secrets_of_Successful_Brokerage_Firms_2022 (1)

Some surprising findings

  • Only 390 brokerage firms (53.3%) grew their total closed transaction side count more than the total number of existing home sales transaction sides count grew over the past 10 years.
  • Only 334 brokerage firms (45.5%) grew their agent counts as fast as the growth in Realtors® over that same period of time.
  • 197 brokerage firms (27%) more than doubled the number of agents over the 10-year period.
  • 216 brokerage firms (29.5%) more than doubled the total closed transaction sides in that same period.
1200x650_Secrets_of_Successful_Brokerage_Firms_20222
Median

Who are the firms ranked in the top 50?

To avoid duplicating, we accounted for the firms that were on more than one of the top 50 ranked firm lists — growth in agents, transaction sides, sales volume and agent productivity — and ended up with 107 firms.

There were affiliates of Berkshire Hathaway HomeServices, Better Homes and Gardens Real Estate, CENTURY 21, Coldwell Banker, ERA, Keller Williams, RE/MAX and Sotheby’s

There were numerous independent brokerage firms as well. 

Keller Williams had the most that qualified, with 50 firms, followed by RE/MAX with 18, Sotheby’s with 9 and independents with 8.

1200x650_Secrets_of_Successful_Brokerage_Firms_20223

Brokerage firms from 30 different states were ranked in at least one of the top 50 lists. The state that had the most ranked firms was Texas, with 13 different brokerage firms among the 107 that were on at least one of the lists.

There were just two firms that were on all four lists — Keller Williams GO Network and RE/MAX Integrity/Northwest. There were 27 that were on three of the rankings categories.

(Scroll for more analysis after charts.)

What makes these firms unique?

First, every kind of business model and brand of brokerage firm were among the top-performing brokerage firms. In fact, the brand and business model doesn’t provide an explanation for the difference in performance of the top 50 firms from the other 681.

Second there are large firms (>500 agents), medium-sized firms (200-500 agents) and smaller firms (<200 agents) on this list of top-performing brokerage firms.

RealTrends interviewed some of the brokerage leaders on the top 10-year productivity lists to find out some of the actions they took to find success over such an extended period.

Those interviews can be found here.

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