As brokerages scramble to adapt to the post-settlement real estate environment, many more are turning to the same method to expand their workforce: acquiring new teams.
Adding teams is an efficient way for large brokerage firms to increase their agent count and increase income statement sales. But new research reveals the diversity in how teams are organized and how they produce different outcomes.
The research, conducted by RealScout in collaboration with Tom Ferry and T3 Sixty, received 350 responses from team members on topics such as spending for growth, organizational diversity, leading “spheres of influence,” and broker sentiment. A valid answer was obtained.
Overall, teams with 2-5 agents spend less on lead generation than teams with 6 or more agents. That’s because larger teams tend to have bigger budgets and more money to spend on leads.
You also have more bandwidth to process these leads, target higher quality leads, and pay higher referral fees. Conversely, smaller teams don’t have the same access to capital or operational capacity to convert leads after they’re acquired.
However, the findings also show that so-called spheres of influence (SOI) leads – leads generated through relationships with friends, family and former customers – are often ignored and underinvested in. . These leads require long-term effort, patience, and nurturing. Building relationships through email, newsletters, and other marketing strategies.
When asked where most deals came from, about 80% of small and large teams cited SOI. Despite this, more than half of respondents said the systems in place to leverage SOI were only “basic,” while 39% said they were “advanced.” A further 5% said it does not exist.
Despite significant uncertainty regarding the housing market freeze and the National Association of Realtors antitrust settlement, the team is generally optimistic about the future.
Approximately 45% of respondents said that a settlement would make agent recruitment easier because more people would be interested in participating. Relatedly, around two-thirds of respondents expect the new payment rules to have minimal or no impact on their business.
Respondents also revealed their team structure. Median team size increased from 5 people in 2022 to 6 people in 2024. Larger teams also have to staff recruiting, agent support, coaching, and operations much more frequently than smaller teams. Marketing and transaction management roles are most commonly held by non-agents in small teams.
Legally speaking, most teams are LLCs (38.9%) or S-Corps (34.6%), while 15.7% are not corporations.
The fate of intermediaries has become a top concern as trading volumes and commission rates are expected to fall as a result of the settlement. According to data from AccountTECH, smaller brokerage firms are generally less sensitive to lower fees because they don’t have large overhead costs such as office space, administrative fees, and management fees.
