Looking back on the year as we head into 2018, Inman dug into NAR’s 2017 Residential Franchise report to see how the big brands compare, and which ones appear to be leading the pack.

It may be surprising, with the wide array of real estate franchises and large brokerages’ growing market share, that less than half — only 43 percent — of the National Association of Realtors’ (NAR) 1.2 million members work under a franchise banner, according to the trade group’s 2017 Member Profile. That leaves the majority of Realtors flying their own flags with independent firms.

Still, the question remains: Which franchise is the largest, and who is experiencing growth in this increasingly competitive space?

Source: NAR

Corporate earnings season gives us a window into how certain companies are performing every quarter, while another source of insights is NAR’s biennial 2017 Residential Franchise Report. Released this fall and covering a total of 32 different companies, including Re/Max, Keller Williams, and the franchises falling under the Realogy umbrella, the report measures the franchisors by total number of agents, offices, fee structure and more. (NAR, which has been releasing the Franchise Report since 2003, does not report sales volume or productivity.)

Looking back on the year as we head into 2018, Inman dug into NAR’s most recent report to see how the big brands stacked up, and which ones appear to be leading the pack or slowing down.

Franchisor comparison by agent count, offices

Keller Williams has long claimed to be the largest franchisor by agent count. The Austin, Texas-based company reported having 149,203 U.S. agents and brokers, as of April 2017 — the time of NAR’s survey data collection. (According to the company’s earnings reports, globally, the 34-year-old privately held realty company added 6,011 new agents to its roster in the third quarter, most recently lifting its total number of associates to 173,015.)

Based on NAR’s data, the top four competitors with regard to U.S. agent count after Keller Williams are:

  • Coldwell Banker (89,000 agents), based in Madison, New Jersey
  • Re/Max (62, 441 agents), based in Denver
  • Century 21 (55,346 agents), based in Madison, New Jersey
  • Berkshire Hathaway HomeServices (BHHS) (43,479 agents), based in Irvine, California

Source: National Association of Realtors 2017 Residential Franchise Report. *As of April 1, 2017; combined franchised and company-owned offices. (Note: This is a sampling. Not all companies that NAR reported on are included in this chart.)

Of note is BHHS’s relative newness (the company began franchising as recently as 2013) compared to some of the old-guard brands it is catching up with, including Century 21, which began franchising in 1971, Re/Max (1975) and Keller Williams (1987).

If you tally by the total number of offices, Re/Max has the most with a count of 3,689, followed by Century 21 (2,216), Coldwell Banker (2,200) and BHHS (1,313).

When it comes to initial franchise fees, several big brands charge the industry-high of $35,000, including Keller Williams; Madison, New Jersey-based Better Homes and Gardens Real Estate; and New York-based Engel & Völkers North America. Re/Max charges between $12,500 and $35,000, while Coldwell Banker, Century 21 and Sotheby’s International Realty — all falling under the Realogy brand — charge $25,000.

What does data tell us about which franchisors are growing?

According to NAR’s report, Re/Max, BHHS and Keller Williams all added offices between 2015 and 2017 (for exact data, see chart above). During that same time frame, Realogy’s Coldwell Banker, Century 21 and ERA Real Estate declined in office count (in contrast, Sotheby’s International Realty and Better Homes and Gardens Real Estate, also under the Realogy flag, added offices over that period).

According to NAR’s data, Coldwell Banker experienced a loss of 847 offices between 2015 and April 2017. However, Coldwell Banker later reached out to note that NAR had the wrong number of offices recorded in the franchise report and asked Inman to update the story to note that Coldwell Banker had 3,000 total offices in 2015 (700 international and 2,300 U.S.) and 3,000 total offices (800 international and 2,200 U.S.) in 2017 “per our published numbers,” which would indicate a loss of 100 U.S. offices over that time.

Realogy will start 2018 with Ryan Schneider, a new data-driven leader, at the helm, as part of the real estate giant’s ongoing executive shake-up and management shuffle to reignite growth. Re/Max, which had a strong year but skipped its third quarter earnings results, announcing instead that the company is conducting an internal investigation into co-CEOs Dave Liniger and Adam Contos and looking into “allegations of wrongdoing in employment practices and conduct,” may be tending to that mysterious black eye as the year begins.

Scottsdale, Arizona-based HomeSmart International, which over the past two years has added 26 offices and this year acquired Denver-based Cherry Creek Properties, will be another one to watch for growth in 2018.

Editor’s note: This story has been updated with a correction request from Coldwell Banker on Dec. 30, 2017.

Lew Sichelman’s weekly column, “The Housing Scene,” is syndicated to newspapers throughout the country.

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