Here’s the thing about the biggest brokerages in Dallas: They’re almost all getting smaller.
Many of this year’s largest Dallas firms by headcount in The Real Deal’s rankings find themselves in the final huddle of a difficult year. First came the National Association of Realtors settlement; then both the number of closings and home price growth hit plateaus.
To make sure they are ahead of the game when mortgage rates drop and buyer interest revives, the area’s brokerages are retrenching by figuring out new commission strategies and culling the ranks of agents.
“If agents aren’t producing, then they don’t need to work here,” Century 21 Judge Fite owner Jim Fite said.
Still, the exception proves the rule, and the top slot in the rankings went to eXp Realty, which bucked the getting-smaller trend. The entirely virtual brokerage remained fast-growing, with over 2,100 active agents in Dallas, up from last year, according to managing broker Karen Richards. (Reliable numbers couldn’t be obtained for eXp’s agent headcount last year.)
From there, it’s a big leap to the second and third places in the rankings, captured by Fathom Realty and Ebby Halliday, which are almost neck and neck with about 1,500 active agents each, according to TRD Data. Ebby now has 1,744 agents across the Ebby Halliday Realtors, Dave Perry-Miller Real Estate and Williams Trew brands, company spokesperson Steve Smith said.
The ranking spans the Metroplex, covering agencies in Collin, Dallas, Denton, Ellis, Hunt, Kaufman, Rockwall, Hood, Johnson, Parker, Somervell, Tarrant and Wise counties, and is based on residential real estate agencies’ active licenses in the greater DFW area. It shows evidence of cuts in agent numbers after post-settlement changes to the industry and a resettling after a wave of new agents joined the ranks in the years since the pandemic.
Decision time: Cull headcount, or plow on?
Over a quarter of Realtors today got their start in the years since 2020, according to NAR.
But not all of them have had a successful few years in Texas.
Century 21 Judge Fite Realty — the fourth-largest agency in Dallas, with just over 1,000 active agents, according to TRD Data — curbed growth this year, Fite said.
The firm took time to adjust after being hailed as one of the best agencies for new-agent training in the years preceding the pandemic, according to the Dallas Morning News, and its downsizing comes in advance of an expected surge in demand.
In addition to slimming the roster, Dallas agencies have also been taking a hard line this year when screening for new agents, brokers say, hunting for those who cultivate relationships over leads.
The shrinking headcount sounds unpleasant but is actually a bounceback strategy: cleaning house ahead of an expected boom.
For now, the election wild card and mortgage rate flux have most buyers waiting to move, and sellers waiting to list. But after September’s first Federal Reserve Board rate cut in over four years, and with more potentially on the horizon, Dallas brokerages predict a resurgence beginning in the early months of 2025 once buyers and sellers are coaxed out of their waiting.
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For Fite, the rationale is that if inventory and demand do surge in the near future, experienced agents who prospect for appointments will be more valuable to the agency than those passively prospecting through, say, leads or email blasts. In the early stages of listing a home, active agents will keep in touch with past clients, friends and acquaintances and offer their services to “go much deeper,” Fite explained.
“It is surprising how many licenses have entered our industry post-Covid,” said Compass’ DFW senior managing director, Bryan Pacholski.
Compass, which ranks fifth in DFW by headcount, does not pursue newer licensees, Pacholski added, opting instead to focus on more experienced agents. But for other brokerages, the best strategy is to keep on keeping on, expecting that robust economic growth, especially noticeable in the suburbs and surrounding areas, will mostly insulate them from interest rate and inventory ups and downs.
“I am very not market-driven in the way I approach our business, and I think that’s one of the reasons we’re up,” Coldwell Banker Apex owner and broker Lori Arnold said. “Some years it’s going to be high inventory, some years it’s going to be low inventory.”
CB Apex took the seventh spot on the list, with 749 active agents, and was one of the only agencies outside eXp to grow its headcount in the last 12 months.
Among some brokerage leaders, there is also a belief that high-performing agents can maintain or even increase transaction volumes no matter the weather, handling more clients with less effort through the use of technological tools like new customer relationship management systems and artificial intelligence.
At firms like CB Apex, agents receive property-specific marketing resources, including AI-generated descriptions and social media content, within an hour of listing, Arnold said. Compass Realty has long touted its now $1.5 billion end-to-end customer technology, which provides agents with automated marketing material updates powered by AI as listings age.
Negotiation > marketing
The oft-mentioned fact that Dallas’ top brokerages want you to know about their post-settlement performance is that they were using buyer-rep agreements long before the NAR deal required them.
Agents who have experience with buyer-rep agreements have become a hot commodity. Brokerages recruiting them claim that their know-how will deliver an edge over competitors by preventing post-settlement stumbles, as negotiation seems to edge out marketing as the No. 1 skill agents need in order to perform well.
Homebuyers, in many cases now responsible for much of the negotiation that was handled by agents in the before times, also need to be reassured of the value of retaining an agent.
“Negotiation, confidence and knowledge are paramount,” Ebby Halliday President Carolyn Rosson said. “In some cases, an agent’s compensation is being questioned, and they have to be able to validate their professional fee.”
Post-settlement adaptation has looked different for each of the largest agencies. For example, eXp established a system barring broker-to-broker compensation in July. Rather than a predetermined commission rate, listing agents provide sellers with “a menu of options,” which won’t be shared with the buyer’s broker.
All the change creates a lot of work.
“Now is not the time for agents to not do anything,” Pacholski said. “Instead, agents need to double down on the basics of connection and engagement.”
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