The National Association of REALTORS® (NAR) regularly publishes its surveys of real estate firms. Here is its latest:
As of February 2019, NAR had 1.32M members in its association.
- 11% of those members, 158,324 of them, designated themselves as brokers representing one or more agents involved with real estate transactions.
- 78% of those brokers identified themselves as being broker owners who had two full-time licensees working with them.
- 86% of those brokers identified themselves as independent, non-franchised brokers
- 82% of those brokers identified their firms as specializing in residential real estate.
The typical volume produced by brokerage firms in 2018 was $5.3M. Volume variances mirrored the number of offices a firm operated.
- One-office firms typically produced volume of $4.2M and 18 transaction sides in 2018.
- Four or more office firms typically produced volume of $100M and 478 transaction sides in 2018.
- It’s worth noting that transaction sides in these larger brokerage firms dropped from 900 in 2015 to 478 in 2018.
Business inquiries/sources in 2018 typically came from past client referrals…30% from past client referrals
- 25% of business inquiries/sources came from repeat business
- 10% came from agent/brokerage websites
- 10% came from agent/brokerage social media
- 2% came from some third party source.
Most brokerages/agents reported being in the real estate business for 15+ years. Here’s the breakdown of professional tenure:
- 52% – 15+ years
- 11% – 11-14 years
- 10% – 8-10 years
- 5% – 6-7 years
- 7% – 4-5 years
- 9% – 2-3 years
- 5% – 1 year or less
And, 42% of brokerage firms are actively recruiting real estate agents!
Client services offered on top of primary brokerage transaction services in 2018 included:
- 21% offered virtual office services
- 61% offered physical office space for their agents and clients
- 9% offered relocation services
- 10% offered mortgage lending services
- 8% offered title/escrow services
- 7% offered homeowners insurance
- 10% offered home improvement services
- 8% offered home inspection services.
The biggest challenges/concerns to brokers included:
- Keeping up with technology
- Competition from non-traditional market participants while 50% of current competition comes from traditional brick and mortar franchised firms
- Both millennial ability to buy a home (58%) and the millennial view of homeownership (46%), ie, the viability/worthwhileness of homeownership investment.
The majority of brokerage firms (57%) expect profitability to increase this coming year. Firms with 4+ offices are move optimistic about short-term profitability as 63% of larger firms project increased earnings.