Real estate franchises handle various services surrounding the buying and selling of residential or commercial property.
According to a member survey done by the National Association of Realtors, real estate brokers were more often to report being affiliated with an independent, non-franchised company at 52%. However, according to the survey, the population of real estate sales agents is pretty evenly split between independent and franchised companies “with 48% belonging to an independent company, 46% belonging to a franchised company, and 6% reported as ‘other’.”
While many of these professionals opt to practice real estate independently, the advantages for real estate franchisees are many when compared to independent operation. They include brand awareness which helps establish trust with potential clients, support in finding leads, comprehensive training, marketing materials, assistance with transactions, access to specialized software, networking opportunities, and much more.
Most people think of brokerage or sales agencies when you mention real estate franchises—and for good reason too. Before the pandemic, home sales had been steadily climbing. Then the pandemic increased the demand. According to CNBC, pandemic-driven demand sent total 2020 home sales to the highest level since 2006.
The increase in demand made for fertile ground for real estate agency growth. According to market researcher IBISWorld, the number of businesses in the real estate agency franchises industry grew, on average, 2.3% per year over the five years between 2015 and 2020. As for 2020, many real estate agency franchises did fare well, particularly towards the latter half of the year. For example, Century 21 noted “significant franchise renewals and new company additions” during the time period of May to August 2020.
But you don’t have to sell property to be a real estate franchisee.
At the same time, home/property inspection franchises also are a significant portion of the real estate franchise industry. Approximately six million people buy and sell houses each year in the U.S., with well over 90% of home sales involving a home inspection. And that’s just homes. Apartment complexes, hotels, warehouses and other commercial buildings also need inspection from time-to-time.
As you dive deeper into your search, you’ll find the real estate franchise industry is extremely diverse and covers many different interest areas for prospective franchisees. Overall, segments of the real franchise industry include:
- Brokerage and sales
- Home flipping
- Home inspection
- Leasing/property management
- Estate sale management
- Marketing support for real estate agents
- Co-working space
- Salon suite rental
Popular real estate franchises include Berkshire Hathaway HomeServices, Century 21, Coldwell Banker, Keller Williams Realty, Blue Moon Estate Sales, HomeVestors of America, Property Management Inc., Real Property Management, HomeTeam Inspection Service, Morrison Plus Property Inspections, Hommati, Venture X, and Encore Salon Suites.
Technological Advances Changing the Real Estate Industry
Like virtually every other industry, the pandemic accelerated the adoption of new technologies that will push the real estate industry into its next frontier.
“During the pandemic consumers have embraced the conveniences that now make home buying more digital and hands-off like 3D virtual tours and remote notarizations,” George Ratiu, Senior Economist for Realtor.com, told Forbes.
“From viewing homes, to learning about neighborhoods, to going through with inspections and closings, the real estate buying process inevitably will become more virtual post-pandemic. While homes are distinctly different than any other kind of product, start-ups and technologies that can streamline the buying and selling experience, take out the pain points, and offer something akin to a one-stop shopping environment like Amazon are likely to stand out.”
If the more technological side of real estate intrigues you, look towards franchises such as Hommati, which uses drones to provide innovative services to real estate professionals; or 3% Realty, which touts its “tech savvy” agents along with its style of “pushing the envelope when it comes to our marketing, branding and online presence.”
Real Estate Bouncing Back
Considering everything that took place in spring 2020, some residential real estate agents went as far as to call the industry’s quick bounce back “miraculous” (certain locales such as NYC excepted). The emphasis on home throughout the year translated to a shortage of single-family homes relative to demand in the U.S., a boon for sales agents, home flippers, home inspectors, and the like.
Though, on the other side, commercial real estate has experienced a longer down period because of capacity restrictions. However, there are signs that recovery will speed up as vaccination rates rise and restrictions are lifted. In particular, fears that most office workers won’t return to office buildings may be exaggerated, according to some analysts. “Human contact is essential to who we are. It’s essential to business and ideas,” says Craig Studnicky, President and CEO of luxury brokerage RelatedISG.
For those considering franchise opportunities in the real estate sector, understanding the initial investment and upfront costs associated with starting a franchise is crucial.
Evaluate various business models and assess how each aligns with your goals as a franchise business owner. Many franchises offer comprehensive training to help you succeed. Whether you are interested in becoming a real estate franchise owner or exploring different segments of the industry, there’s a franchise opportunity tailored to your needs.