Top Real Estate Franchises
How can multiple real estate “brands” claim to be the biggest or have the top real estate agents? There is a lot of confusion when it comes to real estate franchises. If you were to ask the average home buyer – if Keller Williams was a large real estate brokerage, they would undoubtedly say “yes”. Truth is, Keller Williams is a real estate franchise, NOT a real estate brokerage.
Although Keller Williams claims to have over 1,000 offices in the US, each of those offices are independently owned and operated. They are NOT one big company — but many small companies, with their own CEO,Broker and real estate agents. Although there are other large, independent real estate brokers that do not operate as franchises, they are not the brands that usually comes to mind when a person thinks about the top real estate companies in the US. The largest independently owned and operated real estate brokers are usually regional and although a household name for your area, may have never been heard of across the country from you.
We will be cover many aspects of real estate franchises including:
- What is a real estate franchise?
- Why would a real estate company franchise?
- What are examples of real estate franchises?
- Who are the largest real estate franchises?
- Who are the top real estate franchises?
Franchising in Real Estate
For the most part, there are two major types of real estate companies when referring to real estate brands and offices you can walk into. One is the independently owned and operated franchise model and the other are independant or non-affiliated real estate firms. There are also very large real estate companies that own multiple brands.
As a matter of fact, Realogy INC owns the following real estate brands that they offer franchise agreements for:
- Better Homes and Gardens Real Estate
- CENTURY 21
- Coldwell Banker
- Corcoran Group
Realogy also owns NRT – which is the company that they umbrella franchise offices that they have bought back or is totally company owned. So in the instance of NRT offices, the are actually one big company — but operate different brands.
What is a Real Estate Franchise?
Simply put, when a real estate broker buys into a franchise, they are purchasing the right to market under that brand. They do have branding restrictions and guidelines as to keep everything consistent nation-wide, but purchasing a franchise lets Joes Real Estate become Keller Williams – Joes Real Estate.
When a broker becomes a franchise they are also buying into the technology, processes, business model of the Franchisor but they get to reap the benefits of nation-wide branding and name recognition. The individual broker (Joe) now pays the franchisor (Keller Williams in our example) a percentage of their sales. Depending on the franchise, most also require a marketing fee be paid, which covers their share of the nation-wide marketing.
Why Would a Broker Franchise?
There are many advantages to buying a franchise in real estate. The most obvious is the immediate brand recognition. With the average buyer or seller not understanding how franchising in real estate works, when they talk to a Realtor who works for Coldwell Banker *your city name* — they are under the impression that they are working with a huge company. That still maybe the case, there are large franchises out there – but more often than not, the “owner” of the local CENTURY 21 is sitting right in your town.
In addition to the brand recognition, becoming a franchise partner gives access to technology tools provided by the brand. There is an ongoing battle between the largest real estate franchises to provide top tier real estate technology tools that differentiate themselves. Many provide real estate websites, digital marketing options and paid technology tools (at a discount because of the buying power).
Realogy also has the largest relocation network in the world. This lets them “feed their local brokerages” relocation business from Cartus. So if a large firm is transferring people in or out of an area, Cartus usually has that contract. They then connect those homebuyers and sellers with the locally owned Realogy brokerages.
Another big aspect of purchasing a real estate franchise is the business model and the business processes. As an example, Keller Williams has a system in which agents get a fee when they bring on other new agents. This is a profit share aspect that when you become a Keller Williams franchise, you then offer to your agents.
Each franchise brand would have a unique value proposition and we have by no means have covered all of the offerings by the different franchise offerings, but these are the big ones.
Examples of Top Real Estate Franchises
By no means is this an all inclusive list of real estate franchises, but here is a list of real estate brands that are franchise based.
- Keller Williams
- Crye-Leike (both franchise and corporate owned)
- Berkshire Hathaway HomeServices
- Engel & Völkers
- Realty One Group
- 1 Percent Lists
- EXIT Realty
- Leading RE — although some can argue their position as a true franchise brand, they are really more of a relocation network for independent brokers.
Realogy Brands Franchises
- Better Homes and Gardens Real Estate
- CENTURY 21
- Coldwell Banker
- Corcoran Group
Lies, Damn Lies and Real Estate Statistics
A common question is who is the largest real estate franchise. This is actually much trickier to answer than you would think. How would YOU rank a real estate franchise? Would you look at the number of real estate agents that are associated with the brand? How about the number of offices? How about by production?
If you look at the highest producing real estate franchise brand you have to further define what is real estate production. For instance, is it the number of real estate transactions (sometimes called sides as they have a buying side and a listing side in a real estate transaction) or would it be the total volume of real estate sold? When you refer to “real estate sold”, do you only count the listings that were listed by the brokerage or do you also look where they represented buyers?
A common way to rank real estate brands is by the number of real estate sides. Each real estate transaction has two sides; the buying side and a listing side. In some instances where dual agency is allowed, one real estate broker (or agent) can have both sides of the transaction.
So, to rank the largest real estate franchises, it absolutely depends on how you look at the numbers. Here is the list of ways that you can rank franchise sales in the real estate industry:
- By Agent Count – For 2019 this is Keller Williams. They have had the largest agent count for the last couple of years.
- By Real Estate Sides – If you look by real estate sides you are counting the transactional sides, in 2019 that is also Keller Williams.
- By Real Estate Volume – If you were to count up the total volume (both listing and selling sides) that would technically be Leading RE.
- Fastest Growing Franchise – If you look at the fastest growing franchise for 2019 that would be Realty One Group
It is worth noting, that if you add up all of the franchise brands under the Realogy umbrella, they are the largest by just about any count. There are endless ways you can slice and dice real estate statistics of franchise volume.
You can download all of the real estate brokerage sales statistics, compiled by Real Trends by clicking this link: 2019 Real Trends Rankings of real estate brokers.
Our Picks for Top Real Estate Franchise in 2020
All of the previous statistics have been looking at real estate data in the past. We want to look forward to who we expect to be a major player in the realty franchise category for 2020.
Who does Top USA Real Estate predict will be the 2020 real estate franchise to look at?
2020 Real Estate Franchises to Look Out For
We have seen a major move in the real estate industry toward Flat Fee Listing Models and Discount Real Estate Brokers. Our top pick for 2019 top real estate franchise goes to 1 Percent Lists. 1 Percent Lists has literally doubled their production every year since their inception. Grant Clayton President of 1% Lists was quoted as saying:
“We have experienced rapid growth and great success in our current market but quickly realized there are a lot of untapped markets that we could move into”
Their unique business model which includes listing a home for 1 percent of the sales price but still paying a competitive commission to the buyers agent side has changed the landscape of real estate in the markets they have entered. 1 Percent Lists is launching their real estate franchise in 2020 and they are making the barrier of entry very low for real estate brokers, so we are expecting to see big things from them.
Another major player expected to continue their dominance in 2020 is Realty One Group. They too have a “less than traditional” real estate business model which is driving their business. Started by a past President of RE/MAX, Vinnie Tracey, Realty One Group has quickly grown to over 250 offices and over 12,000 agents. We anticipate their 100% commission model to continue to chip away from the traditional real estate model and grow their franchise business.