Chapter 4 — An Untold Story – The Evolution of Real Estate Brokerage

Step 1 to making an informed choice — Understanding why the Real Estate Industry changed its focus. 

Knowing the difference between a real estate broker and a salesperson is a distinction essential for every client to understand.

Yet, to fully appreciate the importance of working with a broker, especially the top 15% of all licensees aligned with BrokerInTrust, some perspective would be helpful.

Two and three decades ago real estate companies consisted of no more than 10 to 15 sales salespeople who worked one-on-one everyday with a single broker. That “responsible broker” typically owned the company. There was true quality control and direct supervision over the salesmen and saleswomen who delivered specific, quality services to clients in every transaction. Clients frequently worked side-by-side with salespeople AND the broker/owner. After all, it was the owner’s name typically on the sign outside the office, and it was the owner who, ultimately, had responsibility for every transaction.

Then, regional companies started to grow as successful individual offices opened branches throughout a geographic region. The size was still limited to about 10 to 15 salespeople yet, obviously, the broker who owned the company couldn’t be in all locations to manage what now was a sales force of dozens and of up to hundreds of salespeople over multiple offices. Importantly, through this phase the offices all had the same name and the same owner. In many instances, managing brokers were hired to oversee the activities of each local office. These managing brokers had the task of maintaining quality controls and ensuring that all salespeople followed the company’s overall business plan.

Through this overwhelmingly successful expansion phase the industry stayed focused on the client —  we call  it “client centric.” That guaranteed client needs were met before anything else.  The client was king and queen. New services were added and out-dated concepts retired only if it was to the advantage of the client, which, not surprisingly, translated into even greater success for quality companies. Companies that provided unsurpassed client services prospered.

These regional offices were successful also because of the synergy they enabled — the company could invest in creation of one fantastic new service, yet spread the expense over a much wider base than the single-office model.

The regional model worked fine for a while, until the idea of franchising took hold.

Executives at companies with multiple regional offices thought that by franchising they could package the advantages of big companies to the advantage of small companies.That was the beginning of a new era of real estate brokerage, an era we call “Agent Centric.”

Franchise companies like Century 21, Re/Max, Red Carpet, Realty World, Sotheby’s, Prudential, and many others started to pop up. Then some of the large regional companies, like Coldwell Banker, even started to franchise their names. This created an environment of different owners who had little or no obligation to follow any master plan or policy of client service. Same brand name … but DIFFERENT owners.

 At that point, no longer could a consumer have confidence they would receive the same services by going to any individual office of any given real estate company. It would be like going to a McDonalds, but getting a Jack in the Box version of a cheeseburger. It might still be a cheeseburger, yet it wasn’t what was ordered. We call it the “unfranchise.”


Offices with the same company name started competing against each other for a simple reason — they were, in fact, competitors.  These same offices also had to compete with all other real estate companies and their individual networks of regional offices.

Yet the real force behind this competition was not to better serve clients, but to instead attract more salespeople, who they lured with the promise of higher commissions.

Real estate companies and individual offices then pushed to maximize the number of salespeople simply to make up for what was lost by offering some of them a higher commission. Adding salesmen and saleswomen cost little to nothing, since they were paid only upon completion of a successful transaction.

Even if a salesperson produced only a single sale per year, it was still one more sale than the office had before. Every office typically has a small cadre of highly productive people who generate the bulk of that office’s income. Adding many more salespeople often meant gaining just enough additional sales to make it very worthwhile.

For the consumer, however, it was at that moment in time that the industry completed its shift from a focus on clients — “client centric” — and moved toward what we have today, an emphasis on the salesforce — “salesperson centric.” From “client centric” to “salesperson centric” in less than a generation.

But consumers didn’t realize what had happened. Indeed, consumers had no way of knowing what was going on. How could they? Consumers typically have few purchases or sales of a home in a lifetime, so there is little chance they’d even know that the real estate industry had evolved.

What’s lost from the client’s perspective? Everything! Quality controls went out the door. One managing broker, no matter how competent, simply cannot adequately oversee the activities of 50, 75, 100 or more salespeople, many of whom are part-time and inexperienced.


Where brokers used to train their sales force, forcing beginners through an apprenticeship and purging the unqualified, now only about 20% of salespeople have the commitment to the profession and experience that a client could trust. The other 80% treat real estate as a hobby, part-time work. Some generate a single sale a year. In fact, the number is between zero and three sales per year on average.

This “salesperson centric” business model is now the industry standard, found at virtually all companies, franchise and non-franchise.

If you went to two different McDonalds restaurants, it would be easy know if the hamburgers were different. But who comparison shops among real estate offices, agents, and brokers … especially those under the same corporate name? Isn’t there a presumption that a client would receive identical services from companies of the same name? More importantly though, considering how infrequently consumers enter the real estate market, keeping up with the differences in services is virtually impossible.

Plus, it’s virtually impossible for consumers to distinguish between the committed professionals and uncommitted part-timers if both carry a business card from the same office?

That’s the bad news.

What’s the good news?

The BrokerInTrust revolution. The BrokerInTrust Promise.

BrokerInTrust is a break from the momentum of the past. It is a return to a client-centric focus where the brokers compete for the attention of clients based on service, not on recruiting more salespeople. In fact real estate salespeople cannot qualify for membership in BrokerInTrust.


BrokerInTrust is an organization of independent brokers and business owners who are committed to serving only the client. 100% of their focus and business creativity is to enhance the client experience.

Where’s the proof?

To start with, the members of BrokerInTrust do not hire salesmen or saleswomen, so neither time nor money are spent on recruiting or training salespeople like other business owners. 100% of the energy of BrokerInTrust members is focused on their clients!

Next, to assure clients they are working with competent brokers only, BrokerInTrust members must be full-time in the profession, have proved their commitment over years of productivity, and have a track record of ethical performance. There is more on this in later chapters. For now, though, the proof is …

The BrokerInTrust revolution. The BrokerInTrust promise — the client comes first, guaranteed!

Turn to the next chapter and view the next video to learn how BrokerInTrust can make that promise.

BrokerInTrust VideosBrokerInTrust Previous Chapter BrokerInTrust Next Chapter