Comparing real estate team and brokerage profitability

An analysis of the 2021 RealTrends Team Profitability Study

Today’s RealTrending features Steve Murray, senior advisor to RealTrends and Tracey Velt, editorial director of RealTrends discussing the profitability of real estate teams compared to the profitability of real estate brokerages, based on the results of the 2021 RealTrends Team Profitability Study.

Here is a small preview of today’s interview with Steve Murray and Tracey Velt. The transcript below has been lightly edited for length and clarity:

Tracey Velt: I want to talk about team profitability versus brokerage. Tell me some of the specifics and why you think or what the data says about why teams are more profitable than brokerages?

Steve Murray: It goes to the fundamental nature of a brokerage versus a team. A brokerage company, for the most part, recruits agents, develops those agent and supports them. Then, they say, “Go get clients, get transactions done, and get them closed.” The brokerage will provide technology, marketing, coaching, mentoring, training, but the agent has to find the clients and customers.

If you really talk about the fundamental difference, that’s it, right? A team usually has been formed, based on all the interviews and research we’ve done, when a good agent says, “I’ve got more clients and customers than I can reasonably handle” or “I want to build something a little more than a sole practitioner can build, and I will then find a way to generate more clients and customers and add buyers agents, administrative people as I need to, to grow.”

But you get down to the fundamental difference: A team provides the client and customers for the agents. That’s it. And a brokerage primarily does not provide that as part of their benefit. 

RealTrending features the brightest minds in real estate. Twice a month, brokerage leaders, top agents, team leaders, and industry experts share their success secrets, trends, and lessons learned navigating this ever-changing industry. Hosted by Tracey Velt and produced by Elissa Branch.