RealTrends does some great work. I love playing with their numbers, when they become available. The most recent one is a project they did with the Wall Street Journal ranking the top 1000 real estate agents and teams in the United States. (And, no, I have no idea how they got the data, what their methodology was, etc.)
Click through to the RealTrends site to see the top 250 real estate agents and agent teams. Congratulations to all Notorious readers who made the list, in case such a person exists.
I had a few minutes so just played around with the numbers a bit. Some interesting, or not so interesting, findings there.
The Keller Williams Dominance
First, it’s impossible not to note the continued dominance of Keller Williams brand in any of these “Top XYZ” lists for real estate. By my count, 122 of the 255 “Top 250” teams (there are a bunch of ties) are part of a Keller Williams office. Seeing as how KW recently overtook Century 21 as the second largest real estate brand (by affiliated agent count, anyhow), and not a single Century 21 agent/team makes the list (I’m not even sure if C21 allows agent teams)… I have to wonder if there’s a relationship between the two things.
The other factor of dominance is the gap between KW and everyone else. In second place is Coldwell Banker with 38 agents/teams on the Top 250 list; in third, we have REMAX with 31. KW more than triples the second place brand. That’s amazing. By the way, Prudential comes in fourth with 19, and then no one else even breaks double digits.
Maybe the numbers are not as stark in the full Top 1,000 list as it is in the Top 250 list. But based on this list, the domination of KW over everyone else is pretty thorough.
More Fun With Numbers
The average number of sides for the “Top 250” list is 241.2, while the median is 205. That means the average Top 250 agent/team is doing 4.64 transactions per week, assuming a 52-week year with no time off. I wish the study/list had the number of team members listed as well, so we could see how many transactions per team member that is… but hey, I’m happy to get whatever data I can. 🙂
Using the national median house price for July 2011 of $222K (from Census Bureau), 2.5% commission rate per side, I calculate that the average agent/team in the Top 250 brought in $1.4 million in GCI. Assuming a 80/20 split (which is likely very very low for such top producers, especially at KW where you go to 100% after capping), each agent/team took home a million bucks on average ($910K for median).
It goes without saying that using national median numbers is highly inaccurate. In markets like Las Vegas, the median price is likely to be far lower than $222K. In markets like Reston, VA, $222K might get you a couple of parking spots.
RealTrends did do a Top 250 Teams by Volume, which would take the local market prices into account, but I didn’t feel like playing with those numbers today. Maybe tomorrow… or someone else could do the Volume-based post. But one quick thing. Take the top team, according to that list, the Creig Northrop Team of Long & Foster in Maryland. It did $308 million in volume in 2010. I’m pretty sure (though I haven’t seen the 2010 RealTrends brokerages list) that if the Creig Northrop Team were a standalone brokerage, it would place in the Top 250 Brokerages as well.
I don’t know what sort of real conclusions you can draw from any of this. The data is wonderful to have, but sort of thin on all sorts of important information (number of team members, paid staff vs. commissioned agents, etc. etc.), and I really haven’t done a deep dive here. Having said that, there are three quick impressions that I think one would be justified in having.
First, the dominance of Keller Williams as a brand in these “Top XYZ” lists is clear and convincing. I’ve long held that Keller Williams is the logical conclusion of the agent-centric business model, and likely the optimal business model for “traditional” real estate as it is practiced today.
Second, the numbers show that the top agents and top teams are doing very, very well indeed, despite the ongoing recession/depression/whatever. I’m a bit conflicted about how to think about these entities. On the one hand, they’re really nothing more than brokerages of the pre-REMAX age, when the broker controlled everything and agents simply worked for the broker. On the other hand, agent teams are not brokerages, neither in the legal nor in the financial sense. They’re not responsible for all of the costs and risks of operating a full-blown brokerage company.
Something I’d love to find out more about is the tipping point at which these super teams transcend the individual super agent. For example, take the Creig Northrop team, the top team by volume. How many deals does Creig Northrop himself actually do? How much could he actually do for the client who is ostensibly hiring Creig? Or the top team by sides — the Ryan O’Neill team — which did 764 sides in 2010, or almost 15 sides per week over a 52 week period. It is simply impossible for the agent whose name is on the team to have had much (if any) involvement with 15 transactions per week.
I do wonder if there are consequence to ideals of professionalism and customer service from these super teams where the lead agents simply could not have enough hours in the day to pay personal attention to client service. But then I wonder if those ideals are just that: ideals.
Third, the volume and revenue numbers raise some questions. If you’re really doing $308 million in volume, resulting in some (let’s say, ballpark) $7.7 million in GCI, are you really paying 20% or $1.5 million to the broker for his split? I doubt that very much. Maybe such super agents are on 95/5 splits or better. Which raises the question in my mind of whether the brokers — who take on much of the overhead, the liability, and the like — are really making any money on these super agents/teams. If they’re not, how long could this system continue?
Eh… most of these are wholly unjustified conclusions given the brevity of the analysis, and the thinness of the data. But boy, it sure would be fun to get real detailed data and do real detailed analysis, wouldn’t it?