As 2023 grinds into the final months of the year, agents are continuing to migrate from legacy brands to low-fee, cloud-based brokerages.

Why it matters: A receding tide reveals, and the current market dynamics are revealing clear agent attraction trends – with implications that may affect the industry for years to come.

The data: Between the second and third quarter of the year, agents continue to flock to the low-fee / high-split brokerages where they are able to keep more of their commission dollar.

• This is at least the third straight quarter of declining agent counts at the large legacy brands: Anywhere, RE/MAX, and Keller Williams.
   

• The noteworthy outlier is Compass – which acquired Realty Austin and its 630 agents – which operates as a legacy brand but has the growth rate of a low-fee brokerage.

Since the beginning of the year, 10,500 agents have left the big legacy brands, while the exact same number of agents have joined the low-fee brokerages. 

• Agents are voting with their feet, and moving from one brokerage paradigm to another.

Agent migration is shaping transaction volumes and brokerage market share.

• Between Q2 and Q3 of this year, the number of U.S. existing home sale transactions was down five percent, with some brokerages over- and others under-performing the market.
   

• Low-fee models Real, United, and eXp Realty continue to outperform the market and grow during a down market – a remarkable achievement.

Yes, but: While this metric shows momentum, it’s not perfect; one down quarter can result in a subsequent up quarter, which appears to be the case with Compass – it didn’t have a bad Q3, it just had a great Q2.

The bottom line: As measured by agent count, there is an undeniable shift occurring across the industry in this time of upheaval, uncertainty, and change.

• It’s worth noting that the low-fee / cloud-based brokerage models have another important attribute: low operating expenses (no offices!).
   

• That fact, coupled with growing agent numbers, is laying the groundwork for a transformational shift in the industry that may set the tone for years to come.

Note: Thank you to Keller Williams, United Real Estate, and RealtyOne for trusting me with their data. As private companies they don’t have to share. Certain data for RE/MAX and Berkshire Hathaway HomeServices is not publicly available, which is why it is not included.