The tops firms on the REAL Trends 500 used to be predictable. Not anymore.
It seems like yesterday you could count on the same brokerage firms at the top of our rankings in the REAL Trends 500 and Up-and-Comers. With some minor changes, the top 20 or so firms were always there. And, 20 years ago, independent brokerage firms made up the majority of brokerage firms.
The mix between franchised brokers and independent brokerage firms changed some time ago. It was over 10 years ago that franchised firms passed independent firms on the REAL Trends 500 regarding the number of firms in both segments. The recently released rankings will show this.
The bigger change happened more rapidly. There are now several firms that didn’t even exist 10 years ago but are now in the top 20 on the list. Firms such as Redfin, HomeSmart, Real Home Solutions and eXp are all in the top 15 in the country this year. Another surprise is that Keller Williams has an affiliate which is now in the top 10. Compass, while not in the top 10 in closed transaction sides, is in the top 10 when looking at closed volume.
These new entrants are using a combination of low costs, either to the agent, consumer or both, along with technology and low operating costs to drive growth. Most readers know that, in general, low-cost agent models have been around for quite some time but don’t see how pervasive they are in today’s brokerage market.
From our view, it shows that rather than a brokerage being a business for incumbents, it’s a business that is showing signs of significant change in which models and firms are innovating more than ever before.