The massive potential for disruption and growth prompts large capital investors and private equity firms to make significant commitments. The scale of their investments attests to the viability of the untapped opportunities within industries. Given this context, it’s worth noting that private equity firms have focused on the real estate sector in recent years, investing billions in advanced technology that can develop new efficient systems that will open more market opportunities.
The overall process involves investors taking the serviceable available market (SAM) and total addressable market (TAM) into consideration. These allow them to discern the demand for a service and product as well as the market portion they can serve. Looking through the lens of the real estate brokerage model, the SAM covers the transaction fees from the sale and purchase of properties. It also includes the recurring revenues from affiliate brokers and agents.
More established brokerages usually secure additional revenue through ancillary services like mortgage and insurance. These contribute to substantial portions of the SAM. This translates to multiple revenue streams and, in turn, enhanced value proposition for the brokerage.
Private equity firms succeed in disrupting traditional models by penetrating the real estate sector. These entities acknowledge that new market entrants aim to reduce costs, streamline operations, and deliver improved services through advanced technology. They intend to help companies tap into market opportunities they deem inaccessible, allowing them to expand the SAM and TAM and augment the unit economics of the real estate services business model.
United Real Estate has introduced a business model that overcomes the limitations of the conventional transaction-based brokerage system. This national real estate brokerage, known for its operations within strategic international markets, has made it its mission to scale its operations to provide its agents and brokers the highest possible compensation. Its initiative, which shifts away from traditional approaches, aligns with United’s broader mission of improving the outcomes and profitability of its affiliated brokers and agents.
The forward-thinking company compensates its agents with a percentage of 30% or 60% higher than what other models offer, allowing United to build a robust relationship with its agents. The inevitable result is improved retention and reduced customer acquisition costs, which then guarantee growth and penetration of new market segments.
Thanks to its unique model, United has expanded its SAM and created a broader TAM. Its transition from a transaction-based approach to a more inclusive strategy has enabled it to provide outstanding value to both agents and clients. Consistently exceeding client expectations has positioned United as one of the fastest-growing real estate brokerage firms over the past five years, with a jaw-dropping 727% growth.
Since its foundation in 2011, the company has been dedicated to giving back to those who work for it—the agents, as well as their clients, families, and communities. It has turned this vision into reality by surpassing the traditional brokerage model, illustrating its commitment to agent growth and support.
“We recognize that our agents need the appropriate tools to improve their performance and income. They also need the knowledge to protect their financial wellness. That’s why we launched our Financial Wellness Program—to positively impact our agents’ financial health,” Dan Duffy, the CEO, shares. No other traditional brokerage has initiated such programs, attesting to United’s position as a leader in guaranteeing agent growth.
The Financial Wellness Program creates tangible change in an almost stagnant industry. It helps agents achieve financial security through strategic investment management and financial planning, as well as tax, estate, and retirement planning. United also launched the United Real Estate Group Healthcare Program, which provides affordable, high-quality PPO health plans, dental, vision, and supplemental insurance to agents and staff. This program has generated more substantial annual savings than open-market plans.
All of these make United stand out as an employer. As it fills the gaps in healthcare and retirement benefits, the company continues to attract and retain top talent. With this, United strengthens its market position. “We distinguish ourselves from others in the industry with this question that we always ask before developing innovative strategies: ‘How can we support our agents so they can achieve their goals?’ That’s how we provide them with personalized solutions,” the CEO shares.
With this dedication to supporting affiliated agents, it’s hardly surprising that United has over 24,000 people in its system. “We look forward to organically growing this number by 50% in the next 18 months, targeting 100,000 agents in the United States. There are also plans for international expansion in the works,” Duffy remarks.
United Real Estate stands out for its efficient business model, which offers its agents competitive compensation and robust support. Initiatives like the Financial Wellness Program show the effectiveness of this unique framework, improving agent profitability while helping the company withstand industry fluctuations.
