Agencies surveyed by Intel in May disagreed about how listings should be shared, but were not concerned about their ability to compete.
As the real estate industry moves toward consolidation, a major domino effect is occurring.
First, Compass completed its merger with Anywhere and quickly launched new pre-marketing partnerships, provocative proposals for national MLSs, and an all-out war to wrest listings from Zillow in some markets.
But other companies in the industry aren’t staying silent either.
The Real Brokerage announced that it will acquire REMAX. NextHome was scooped by eXp World Holdings. And the brokerage has formed a series of competitive alliances with Zillow, Realtor.com and Homes.com in response to Compass’ new efforts.
Despite this disruption, the latest Intel Index survey reveals that surprisingly few agents are concerned that their brokerages will struggle to compete in this new environment.
Despite the delicate nature of the issue of who controls listings, the study found that agents at competing brokerages share a similar outlook on the industry’s near-term trajectory.
Intel has discovered that where they differ most is in the world they most want to see. Real-REMAX and eXp-NextHome brokerage agents also seem to prefer the idea of playing a role as a counterweight to Compass, rather than competing to outpace smaller competitors.
Intel details the full results in this week’s report.
Common prospects, different hopes
For most agents, this year’s rapid-fire events have yet to shake them.
The only exception? Agents at the brokerage, which recently consolidated in response to Compass’ growth, may still be considering what it means to compete with the industry’s newest behemoth.
One in two Real-REMAX and eXp-NextHome intermediary respondents expressed moderate or strong concern about the recent wave of intermediary consolidation. Agents at other brokerages, from Compass to large unconsolidated brands and indies, expressed this level of concern in only one in three responses.
Rather, Compass’ distributors and unconsolidated competitors were generally more likely to say they were “slightly” or “not at all” concerned about developments in the industry.
This appears to be primarily driven by the belief, particularly among agents affiliated with large branded brokerages, that their business model puts them in a good position to compete in an increasingly competitive field and gain access to listings.
Despite consolidation, 36% of agent respondents said they expect the listing landscape to remain “mostly open” for the next several years due to factors such as consumer pressure, MLS adjustments and regulations. A further 18% of respondents said their own intermediaries were in a better position to access inventory, although they expected the situation to fragment along intermediary lines. The third largest group, representing 13% of respondents, said they expected the industry to converge on national or interconnected listing standards that preserve board access for brokerages of all sizes.
Few agents in any class of brokerage firms expected a fundamental break with the status quo that would benefit only the mega-brokers.
Only 3% of intermediary respondents said they expected intermediaries to have difficulty accessing sufficient inventory in more fragmented situations. This share was the highest among independent agents, but still only ~7% of that group. An additional 7% of agents said they expected large brokerages to begin to take over, forcing independent brokerages to make tough decisions about merging, partnering, or exiting.
While these concerns were real, the big picture shows that the industry does not expect this wave of consolidation to put smaller brokerages at a disadvantage.
In many of these areas, agents largely agreed on the competitive landscape, whether they were an independent operation or affiliated with Compass or another recently integrated brokerage.
But where they most disagreed was where the industry would go next. And on this question, agents from integrated brokerages such as Real-REMAX and eXp-NextHome share an outlook closer to that of their unconsolidated and indie rivals than Compass agents.
Fifty-six percent of Compass agents surveyed by Intel said they would like to see their existing MLS partner with a major brokerage to launch subscriptions nationwide. This is the exact model that MRED and others have been pursuing with Compass in recent weeks. Only 15 percent of Compass respondents wanted their local MLS to continue managing listings within traditional regional boundaries without significant national expansion.
Meanwhile, at brokerage firms other than Compass (including those that recently announced merger plans), a much smaller percentage of agents supported national MLS expansion.
Only 31 percent of agent respondents using Real-REMAX or eXp-NextHome preferred a national MLS approach. The percentage was even smaller for agencies with large brokerage brands (22%) or independent operations (19%) that have not recently consolidated.
Meanwhile, even agents at other integrated brokerages were more than twice as likely as Compass agents to prefer a model in which MLSs continue listing at a local level rather than expanding nationally.
Pre-marketing partnerships have a slow start
Despite newly announced pre-marketing partnerships, most agencies have yet to see this listing strategy take hold with clients.
Less than 1 in 25 agent respondents at brokerages other than Compass said their clients “frequently” bring up the topic of private listings, upcoming listings, or premarket exclusive products.
This is still unusual, even for most Compass agents. However, a significant minority of Compass agents report that these techniques continue to gain traction in ways that agents at other brokerages are not aware of.
Just under one in seven Compass brokerage and brand agent respondents said their clients frequently ask them about pre-marketing and similar opportunities.
Although this group is three times the size of Compass’ competitors among Compass agencies, it is still a minority.
The majority of Compass agents (38 percent of respondents in this group) reported that their clients had “never” raised their prospects for a pre-market or non-MLS listing in the past three months. This percentage is even higher for other agent groups, with 54 percent of Real-REMAX or eXp-NextHome respondents saying their clients “never” bring up premarketing, and 49 percent of independent shop respondents saying the same.
The remaining agents said their clients only occasionally or rarely brought up the topic. Over time, the use of these platforms is likely to increase. But so far, they don’t seem to be off to a good start.
Intel will continue to monitor these trends in the coming months.
Methodology note: This month’s Inman Intel Index survey was conducted from May 19th to May 28th and received 469 responses. The entire Inman reader community was invited to participate, and a rotating selection of randomly selected community members were encouraged to participate via email. Users answered a series of questions about their self-proclaimed niche in the real estate industry, including real estate agents, brokers, financiers, and proptech entrepreneurs. Results reflect the views of our passionate Inman community, but do not necessarily align with the views of the broader real estate industry. This survey is conducted monthly.
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