Intel Agent Guide: How to Recruit from Indies, Franchises

This report is available to subscribers only Inman Intelis the data and research arm of Inman, providing insights and market intelligence into the residential real estate and proptech businesses. Subscribe now.

Recruiting for brokerage firms is tough these days, but one group of brokers may be particularly willing to jump ship, according to an extensive analysis of Intel’s survey results.

• Percentage of franchise agents who tell Inman Intel Index they will May switch to a brokerage company The next year will be approximately twice as big Those coming from small independent brokerages who are considering exiting.
• But that doesn’t mean independent brokers won’t be affected. Agents from private independent brokerage firms also More likely say they have Consider leaving the industry recent months.

These insights only scratch the surface of agents from the three main brokerage categories – franchise, private independence and Publicly traded independent company — shared during their Inman Intel Index survey in late May.

Participate in the June INMAN Intel Index Survey

Of the 960 real estate professionals who responded to the survey, 610 self-identified as brokers and disclosed the type of brokerage firm they work for.

This segmentation provides Intel with a rare window into the unique experiences of agents in each type of brokerage, including their current commission allocations, transaction volumes and what they value most in their brokerage.

Intel’s guide utilizes the Intel Index to help brokers and executives evaluate what agents at franchised and independent brokerage firms are thinking of, and how to win over them. Read the results in the full report.

Indie vs. Franchise Games

Intel’s findings reveal that not only is this a long-standing debate in the real estate community about which brokerage structure achieves the best results, it also affects how brokers respond to recruiting pitches.

Some agents prefer working for a brokerage that is part of a large franchise network, while others firmly believe in the benefits of a more independent model.

In recent years, a third model has become an increasingly important player: large public companies that do not franchise. Fast-growing upstarts such as Compass, eXp Realty or Real Brokerage fall into this category.

Since this public standalone model blurs some of the lines between the big networks and traditional standalone stores, we’ll leave it aside for now. (Don’t worry, we’ll bring it back later.)

That leaves two groups still overwhelmingly represented among Intel Index survey respondents: agents at chartered brokerage firms and agents in (mostly smaller) independent offices.

• 15% of franchise agents say they are strongly considering changing brokerages in the next 12 months. only 8% A broker at a private independent brokerage echoed the sentiment.
• Franchise agents are also less willing to wonder if they are staying in real estate, 27% said they had considered leaving the industry in the past year. almost 33% Agents at private independent shops said they had considered hanging it.

So, with this in mind, there may be a very promising opportunity to recruit franchise agents. The risk of losing them to competitors is also high.

So what do they value in a brokerage?

• Like other groups, franchisee agents told Intel they wanted to know how it was doing good cultural fitand 26% Choosing this as the most important aspect of their brokerage.
• Still, this ratio is significantly lower than that of private independent brokerage firms, which 36% of agents surveyed said they value culture fit most.

So, what attracts franchise agents to a brokerage?

• More franchise agents tell Intel they value Consumer awareness or brand awareness Among their brokerages: 30% Saying that in a franchise, vs. just 19% In private independent operation.
• Franchise agents are also paying more attention to their brokerage business science and technology and educational products. Finished 19% of franchise groups ranked technology and education as their top priority, compared 11% Private independent agency.

Interestingly, brokers’ views on commission structures also vary significantly between franchises and independents.

• Franchise agents who respond to Intel are more likely to Commission divided between 70% and 79%and is unlikely to have a high split 90% or above Transactional.
• In all, 31% The proportion of franchised agents is below 80 compared to twenty four% Agent for a private independent company.
• That said, franchise agents seem mostly happy with the trade-off. only 17% of franchise agents say commission structure is their top priority, while twenty four% of private independent agents say the same.

When recruiting franchise agents, there may be more room to level them up in terms of commission allocations. However, it can be important to build the central thrust of your pitch around factors such as the brokerage’s technology offerings, culture, and brand recognition within the community.

Franchise agents are more likely to report a lot of business in this depressed market.

• twenty four% Franchise agents who responded to the Intel Index in late May said they were done More than 20 transactions in the past 12 months. other 20% Said they carried out Five or fewer transactions.
• only 17% Agents for the private, independent companies told Intel that they have More than 20 transactions In the past year. Proportion of private independent respondents Five or fewer transactions used to be 32%.

But focusing on these two groups (explored in detail above) misses a key set of agents.

Where do Compass, eXp fit in?

Some of the biggest emerging brokerages of the past decade deserve their own category.

Technically, these companies are not franchisees—although some have considered the idea. But brokerage brands like Compass and eXp Realty have many of the same technology and online resources that larger franchise companies typically offer.

Perhaps unsurprisingly, the Intel Index results show that agents affiliated with large non-franchise brokerages look more like their franchise counterparts than private independent brokerages.

Still, attorneys for listed independent companies exhibit some key differences in perspective.

• almost half of agents Publicly available independent companies tell Intel they are somewhat close 80/20 split their brokerage operations—roughly twice the level of concentration reported by other groups. But that means they’re also less likely to report A higher allocation of 90/10 or 95/5 or The lower ratio is 70/30.
• Public independent agents are most likely any group says they value Technology and Educational Resources All other aspects of its brokerage business: 26% Said this in public indies, compared to 19% in the franchise business.
• although cultural fit Still an important part of being an agent of a public independent company, just twenty three% Some of them said it was their top priority — the lowest percentage of any group.

When it comes to the most important business issues, franchisees and private independent company agents have fairly similar concerns. But Public Independent Corporation agents excel in several key areas.

• only 4% Attorneys for publicly traded independent companies told Intel that their biggest concern is the uncertainty surrounding brokerage operations following settlements of lawsuits. This is significantly lower than 11% by franchise agents and 9% By private independent agent.
• Instead, this group’s concerns are directed toward the market itself: 70% any of the agents of a public independent corporation lack of stock or mortgage interest rate As their top business concern, in comparison 62% of franchise agents pointed to the same two factors.

Because this is the smallest group, consisting of approximately one seventh Across all proxy respondents, these results are unlikely to be representative of the wider group.

Intel will continue to track these three groups of agents in the coming months, looking for ways that the changing environment may differentially impact them in terms of buyer pipelines, deals and hiring dynamics.

Methodological Notes: Inman of the month Intel index poll The survey was conducted from May 20 to June 2, 2024, and 960 responses were received. The entire Inman reader community is invited to participate, and rotating, randomly selected community members are prompted via email to participate.. Users answered a series of questions related to their self-identified real estate industry—including real estate agents, brokerage leaders, lenders, and proptech entrepreneurs. Results reflect the opinions of the participating Inman community, which may not always align with the opinions of the broader real estate industry. this poll Do this once a month.

Email Daniel Houston