The Ten Different Types of Real Estate Brokerages

by | May 3, 2023

I’ve put this list in order from roughly how long that type of brokerage has existed on planet earth, from oldest to newest. I’m not aware of the timeline of brokerages on other planets. The first few have been around on our planet for over 70 years, and the last of the list has only been around for about 15 years. I’m not going to recommend any one over another.  It ALL comes down to what type of brokerage is the best fit for YOU. With that in mind, after hearing about each type of brokerage, stop for a moment to reflect on what YOU want from a brokerage verses what this type of brokerage claims to offer, and ask yourself if that type of firm might be the best fit for YOU. So, here we go…

    1. The first type of brokerages are LOCAL BOUTIQUE FIRMS. The primary benefit they claim to provide agents is that they are “small and local, and you’ll have a nice group of quality people to get to know and work with.” Other than that, these types of firms do not have any typical characteristics. Every boutique firm is different. Some are very high-end, while others are similar to low-cost firms. They often incorporate elements from the other types of firms listed below. High quality local examples of these types of firms are The Rich Realty Group, Urban Durham Realty, and Inhabit Real Estate. I’ve put links to these firms, as well as the other firms I’ll mention in this video, in the description below.
    2. NATIONAL AND REGIONAL BRAND firms came along next, when a number of local boutique firms expanded to other cities and states. These firms have spent a ton of money on brand recognition, and their main claim is that “Our highly-recognized brand name will help you get more clients.” These firms typically have excellent brokers-in-charge, solid training for new agents, big offices, medium cost to the agent. High quality examples of these firms include include C21, Coldwell Banker, Berkshire Hathaway, Long & Foster, Weichert, Howard Hannah, and many other firms with high regional or local brand recognition. These types of firms would be good any agent who feels that national brand recognition would be a significant help to their business. You can check out THIS VIDEO for an unbiased analysis of that question.
    3. The next type of brokerage are those that specialize in NEW CONSTRUCTION SALES. These firms sell agents on the idea that you will “Work out of a beautiful model home, and customers come to you.” This could be a role within a brokerage or working directly with the builder. The compensation can be great and steady in a good neighborhood in a strong market. You WILL need prepared to work almost every weekend, because that’s when new customers stop by most often. Local examples of these types of firms are Toll Brothers, Ashton Woods, and the Jim Allen Group.
    4. The fourth type of brokerage are the LOW COST firms. These firms compete on being… low cost for agents, not necessarily for buyers and sellers… that’s up to each individual agent. Their claim is simply “We charge you very little to hang your license with us.” These firms claim to be, and usually are, very inexpensive to work with, but of course they offer limited broker-in-charge, or any other type of support. Fathom Realty and Realty One are two great examples of these types of firms. If you are convinced there is nothing that a brokerage can do to add value for your business, this type of brokerage would be your best choice.
    5. Gary Keller made the TEAM AND BRAND BUILDING brokerages famous with the book The Millionaire Real Estate Agent. This type of firm specializes in giving agents guidance to build their own team and brand. If you want to hire, train, and manage your own team and have your own logo and brand name, this type of firm is perfect for you. Keller Williams is the biggest of these brokerages, and newcomers Side and Fusion offer even more advanced versions of the same approach. If you are convinced that building and leading a team is the best strategy for your future, this type of brokerage will be perfect for you. You can check out THIS VIDEO for an unbiased analysis of the different ways to have  the support team you will need to grow your business beyond 20 or so transactions per year, and MAYBE even have a life outside of real estate.
    6. The next type of brokerages are LEAD PROVIDERS. These firms advertises for, or purchases cold leads, and teaches mostly new agents how to convert these leads into clients, and then into commission checks. They typically provide great training, because they HAVE to, because it’s hard to convert those types of leads, and they generally keep at least half the commission because those leads are expensive. These are VERY professionally-managed organizations such as DASH Carolinas or Paracle locally. If you are a new agent who needs experience, this type of firm may be a good choice. HOWEVER, you’ll keep a low percentage of your commission revenue, AND you’ll be learning how to handle cold leads, which frankly isn’t a whole lot of fun for most agents. TOO MANY AGENTS get addicted to cold leads, and that’s a formula for a very exhausting career. The KEY will be to learn to cultivate relationships with past clients so you’ll start getting tons of referral business, which is MUCH BETTER BUSINESS, and this type of LEADER PROVIDER brokerage may not have the software tools or coaching or support to help you make that change.
    7. MULTI-LEVEL marketing has been used to sell all kinds of products and the next type of firm focuses almost exclusively on using multi-level reward systems to recruit agents. They promise that “You will be able to earn unlimited passive income by recruiting other agents, and the agent who recruited you will be financially motivated to help you.” The biggest and best example is eXp Realty, but Exit Realty paved the way years before them. If your primary interest is recruiting and not selling homes, these types of firms could be perfect for you.
    8. The seventh type of brokerage is YOUR OWN BROKERAGE.  There are only three reasons to start your own brokerage. The most common is because you want to develop your own unique brand that means something different in the market. That’s tough to do as part of a bigger brokerage because legally you are required to show their name and logo also in your advertising, and that’s confusing to consumers. So that’s a good reason to start your own firm. The second reason is to save money by not having to pay anything to a firm. Very few agents start their own firm for this reason, because their are so many truly low cost brokerages now, where you can hang your license for next to nothing. The third reason is because you feel you have a better way to do real estate and you want to do it YOUR way. If you do it for this third reason, be prepared that if you want agents to join your firm, you’ll need to give them value worth more to them than what they are paying you. Tall order. I don’t have any examples for you of firms started by you. You’ll have to create your own. 🙂
    9. Are you a new agent and wish you could help people buy and sell homes and also HAVE a BASE SALARY AND BENEFITS? Well, with this next type of brokerage, you can do that. Redfin is the most well-known brokerage that offers this to agents. This is similar to the “Lead Provider” model, but they don’t have salary and benefits, and Redfin does. If you work hard at this type of firm, you can not only have some security, but you will take home more than the average agent. If you take the risk in a commission-only situation, you can take home much more income, even if your first years. It just comes down to how smart and how hard you are willing to work.
    10. The tenth, and most recent type of brokerage are those that FOCUS ON SYSTEMS AND PROCESS IMPROVEMENT. This type of firm promises that “Our systems will help you work smarter, give better client service, make more money, and better work life balance.” The proven processes and support at these types of firms WILL deliver the promised results IF you use them correctly. The results theoretically more than pay for the cost of the productivity-enhancing structure and support staff. This type of brokerage is best for agents who naturally seek to do everything in life in the smartest and most efficient way, who don’t like to waste time re-inventing systems and processes for themselves, and who value structure and consistency as an essential part of running a successful business.

So there you have it, the ten different types of real estate brokerages. Now comes the hard part…. which is best for you? Think through that list again. Which are the two or three, or even ONE type of brokerage that resonates most with YOU as an agent? What do you value most in your career as a real estate agent? Which from the list above aligns closest with these values?


We gave you just  a few examples of brokerages within each category, but we’ll be happy to recommend additional high-quality organizations in your city within the type of brokerage in which you are interested. PRO TIP:  Most agents, whether they are looking for their first brokerage or leaving their current firm, are in a hurry to interview brokerages and are looking for the right questions to ask them.  BUT, you’ll help yourself in a BIG way by taking a few minutes to ask yourself the right questions to understand what YOU WANT from a brokerage so you meet with them you can make sure they HAVE what you WANT. Check out this video for a list of 27 smart questions most agents never think to ask themselves before jumping on board with a brokerage firm. It might save you a lot of trouble and help you get where you want to go a lot faster. If you felt this video was helpful, go ahead and give it a like, and subscribe to our channel to be notified whenever we publish more content like this. ALSO, I’m interested in knowing what was going on inside YOUR brain as you watched this video! If you are an experienced agent, which type of brokerage did you start with? Was it clear to you which of the ten types of brokerages it was when you joined them? Which type do you think is right for you NOW? Are there videos about other brokerage or real estate business subjects you’d be interested in? Let me know your thoughts or questions in the comments below, and I’ll reply ASAP.   Finally, keeping in mind that my only interest is in helping you find the best brokerage for YOU, but if you were pumped up earlier when I talked about Relevate Real Estate approaching the business from a systems and process improvement angle, then we invite you to click the link below to set up a time to come meet with us and grill us with YOUR tough questions.[/expander_maker]