The National Association of Realtors’ 2021 Profile of Real Estate Firms revealed how brokers are pivoting with enhanced consumer and agent benefits.
Although much attention is given to large real estate teams and brokerages, the National Association of Realtors’ 2021 Profile of Real Estate Firms published on Thursday shows the majority of brokerages are independent (86 percent), single-office operations with an average of three full-time licensees (80 percent).
Despite their small size, these brokerages completed 19 transaction sides representing $4.5 million in 2020 sales volume — a 7.14 percent increase from 2018. On the other hand, brokerages with four or more offices increased their sales volume from $100 million in 2018 to $146 million in 2020.
Sixty percent of those sales came from past client referrals (30 percent) and repeat business from past clients (30 percent). Another 20 percent of sales came from digital mediums, such as website traffic (10 percent) and social media (10 percent).
“Most Realtors are small businesses and work closely with small-business clients in their communities,” NAR President Charlie Oppler said in a statement. “The ingenuity, perseverance and tireless efforts of our members are the lifeblood of local economies, and this has been especially evident during the many challenges brought forth by the COVID-19 pandemic.”
In addition to growing their sales, referral and repeat business, real estate brokerages are ramping up their investment in ancillary services such as business brokerage (28 percent), relocation services (13 percent), staging services (12 percent), home improvement (7 percent), 1031 tax-deferred exchange service (6 percent), and mortgage lending (5 percent).
As a result of increased sales and ancillary services, 58 percent of firms expect to experience a boost in profitability or net income.
Beyond offering more benefits to consumers, brokers are doubling down on efforts to attract and retain agents with salaried compensation models, more effective tools and systems, insurance coverage, and salaried assistants.
Errors, omissions and liability insurance were the most popular benefit brokers offered independent contractors (42 percent) and salaried agents (25 percent). Less than three percent of brokers offered independent contractors other benefits such as health insurance, sick/vacation days or 401k pension plans.
Meanwhile, salaried agents were more likely to receive benefits across the board, with health insurance (5 percent) and sick/vacation days (11 percent) being the most common.
When it comes to technology systems and tools, the majority of brokerages offer e-signature (83 percent), comparative market analysis data (82 percent), electronic contracts and forms (80 percent), multiple listing data access (79 percent), and document (55 percent) and contact management (50 percent). The least common offerings are marketing automation (14 percent), QR codes (14 percent), agent rating (13 percent) and loan analysis (12 percent).
Looking forward, brokerages said inventory shortages, housing affordability and “competition from nontraditional market participants” will be the greatest challenges over the next two years.
Read the full report below: