Definition
Brokerage in real estate refers to a licensed firm or business where real estate professionals—brokers and agents—operate to facilitate buying, selling, leasing, and managing property. A real estate brokerage provides the legal, operational, and administrative framework that lets agents represent clients and complete transactions.
How a brokerage works
- Operational hub: a physical office, boutique firm, or cloud-based platform where agents conduct client work, marketing, and transaction management.
- Transaction support: staff such as transaction coordinators, marketing specialists, and legal or compliance teams help execute deals smoothly.
- Licensing and supervision: brokers hold higher-level licenses, oversee agents’ activities, and ensure regulatory compliance.
Key roles of brokers
- Supervise and train agents and ensure adherence to state laws and brokerage policies.
- Oversee contracts, escrow accounts, and closing procedures; in many jurisdictions brokers have authority to move escrow funds or mediate escrow disputes.
- Represent clients directly when acting as the broker of record and provide guidance on legal and financial aspects of transactions.
Common brokerage models
- Traditional commission-split brokerages: agents share a portion of commissions with the broker and often use a local office.
- Cloud or virtual brokerages: firms like eXp Realty operate primarily online, reducing physical-office overhead and offering different commission structures.
- Tech-enabled or discount brokerages: firms such as Redfin blend brokerage services with platforms, lower listing fees, and on-demand services.
- Franchise or affiliate networks: large organizations aggregate local brokerages under a national brand to broaden market reach.
Real-world examples
- eXp Realty – a cloud-based brokerage with ~83,000 agents nationwide; roughly 350,000 transactions and about $152 billion in transaction value in 2024.
- HomeServices of America – a large traditional network with ~37,700 agents across 33 states and $136.6 billion in transactions in 2024.
- The Real Brokerage, Inc. – founded in 2014 with ~26,000 agents, using tech-driven growth to generate about $42 billion in deals across the U.S. and Canada.
- Redfin – a technology-focused brokerage with over 4,600 agents offering lower listing fees and on-demand tours, handling tens of thousands of transactions annually.
Why brokerages matter
Brokerages are the essential infrastructure of real estate: they license and supervise agents, manage legal and escrow obligations, and provide the systems needed to market properties and close deals. As technology advances, brokerages are evolving—offering more flexible commission models, virtual workplaces, and integrated platforms that change how clients and agents interact.
Quick FAQs
Do agents need to work for a brokerage?
Yes. In most jurisdictions a licensed real estate agent must be affiliated with a brokerage to practice. The brokerage provides the legal sponsorship and oversight required for agent activities. See also Agent.
How do brokerages make money?
Common revenue sources include commission splits from sales, desk or franchise fees, referral fees, transaction fees, and income from ancillary services (mortgage, title, property management).
Can a broker move escrow funds or resolve disputes?
Brokers often have authority to manage escrow accounts and may mediate disputes, but actions must follow state law and brokerage policy. See Escrow.
Are all brokerages the same size and structure?
No. Brokerages range from solo boutique firms to national or multinational networks and cloud-based platforms—each with different support levels, commission models, and market focus.
Related terms
Broker • Agent • Escrow • Commission
