This second chart depicts the very largest of the large: the ten brokers employing the most agents in California as of December 2014 by size. It was a mixed year for these exceptionally large brokers, with a majority increasing their number of agents employed. The top ten brokers collectively added 857 agents, while 2,194 were added to the top 60. The California Bureau of Real Estate (DRE) reports real estate agent licensing is down significantly from the boom years preceding 2008, meaning there are now simply fewer agents to go around.
Brokers who once profited by flooding the market with agents to capture sales and mortgage transactions are taking advantage of the extended housing recovery to streamline their operations. Focused and better qualified agents are needed for today’s more targeted and refined client service operations.
The majority of the top ten brokers focus their business in single family residential (SFR) s ales. CBRE, Inc is the only top-ten brokerage to focus on commercial real estate. Notably, all top ten brokers are located in or near urban areas — namely Los Angeles, San Francisco and San Diego. Brokerages located in cities are poised for growth in 2015 and the future, as more households make their living in these areas each year.
Other things the top ten are doing right:
1. Diversified brokerage services. While large brokerages undoubtedly have the advantage when it comes to real estate services, smaller brokerages can also benefit from branching out. This provides a buffer when one niche in the market is on a downswing. For example, F M Tarbell (tarbell.com) also provides relocation services and property and casualty insurance services.
2. Client contact. Many of these brokerages have built-in systems to reinforce client contact. For instance, First Team Real Estate (firstteam.com) offers numerous tools accessible by clients, including market trends and articles on real estate. Staying informed about the housing market shows potential clients that you are an industry expert.
3. Tech savvy. Coming in at number five, Real Estate eBroker Inc (REeBroker.com) is the sole online-based brokerage to make the list. This non-traditional format is working for RE eBroker, as it remains one of the few large brokerages continuing to grow each year during this housing recovery. Their business model is centered around the belief that the real estate industry is moving away from face-to-face contact and toward technology-based transactions. They offer services such as free agent websites, transaction coordinator services and an online library of commonly used forms and other agent documents.
4. Extended training and staff support. Successful brokers support their sales agents by offering training for both new and experienced agents. Training agents in a range of transactions (such as non-SFR sales and investor transactions) is not only helpful for new agents, but allows more experienced agents to broaden their client base. Sotheby’s International Realty (sothebysrealty.com) advertises for specialty markets their agents are trained to handle, including ranches, waterfront properties and vineyards.
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