This might be the shortest blogpost in history of Notorious ROB… because I’m just genuinely curious and don’t fully understand this.
A recent Facebook update from a friend-of-a-friend said something along the lines of (and I’m paraphrasing here both to protect the innocent and because I’m too lazy right now to go take screenshots and black things out)… “Celebrating my five years as manager of Brokerage Office XYZ. We started with 10 agents, and now we’re the largest in the area with 200! How fantastic this has been!”
And the comments/responses are all like, “You go!” and “How wonderful!” and “You’re doing a great job!” and so on.
Here’s what I don’t quite get: Why does the number of agents matter?
I’ve seen/heard this from time to time in the industry. A broker at a conference might say something like, “Yes, Company X is interesting, but it’s insignificant because it only has 25 agents, while my company has over 2,000.” And I’m left scratching my head because as far as I know, the number of independent contractors you have working for you doesn’t appear anywhere on your income statement, cashflow statement, or balance sheet.
If the aforementioned manager had said, “Five years, and we’re tops in revenues, tops in profits, and we’re making money hand over fist, y’all”, that makes perfect sense to me. Or if the aforementioned broker had said something like, “It’s nice that Company X is doing well, but they can barely make rent, while my brokerage is doing $5m a month in free cashflow from operations” or some such.
But really, quite often you hear brokers, managers, and even agents brag about how big their company/office is by reference to the number of agents. With some 40+% of real estate agents (according to MLS sources) doing ZERO transactions, why is the number so significant?
Would love to hear your thoughts/explanations.