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Should I sell my home with a big brokerage, or a small local one?

Big vs small brokerages
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Big vs small brokerages
Bloomberg/Getty Images

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Selling your home is a big undertaking, and you want to make sure you have the best professionals on your side to help you. There are so many different types of real estate firms, it can be difficult to know how to find the best agency or brokerage. In fact, there are more than 106,500 brokerage firms registered in the U.S., according to data from the National Association of Realtors (NAR).

Before listing their house on the market, home sellers should consider whether a small local brokerage or a large national one will serve them best — and it may not be a clear-cut decision. Here’s everything to consider, including pros and cons for each.

What is a real estate brokerage?

Brokerages serve as intermediaries between the buyer and seller in real estate transactions — they literally broker the transaction. A brokerage can be either a single individual or a multiperson legal entity. Think of it like a stockbroker, who helps people buy and sell stocks, but instead helping people buy and sell properties.

Individual real estate brokers or agents typically work as independent contractors through a brokerage firm, which is a company that oversees multiple agents and their transactions. Brokerages come in all sizes, from mom-and-pop operations to huge national conglomerates. You’re probably familiar with some of the larger ones, like Century 21, RE/MAX, Compass and Coldwell Banker. Keller Williams claims to be the largest by agent count, with 164,399 agents registered in the U.S. and Canada as of December 2021.

Of course, being with a supersized brokerage isn’t required to be a great listing agent. Some smaller firms offer client service and care that is just as good as — if not better than — some of the larger firms. It all depends on what you’re looking for as a seller.

Is it the same as an agency?

“Typically the words agency and brokerage are used interchangeably,” says Rebecca Winebrenner, a Boise, Idaho, Realtor and director of operations of the Ben Kinney Team at Keller Williams. “It’s important to check each state, though, as sometimes the language differs a little.”

Technically, according to NAR, an agency creates a legally binding agreement between the real estate agent and their client. This agreement helps ensure that the agent works in the best interests of their client. A brokerage, however, refers to the ability of the real estate professional to act as an intermediary for their client in the buying or selling process. Brokerages are also agencies, since the firm assumes agency for the client — generally speaking, the terms mean more or less the same thing.

Large brokerage pros and cons

Selling your home with an agent from a large brokerage comes with both benefits and challenges.

Pros

  • More resources: A larger organization is likely to have more resources available to its agents — and therefore, its clients. This might include better technology and ongoing education opportunities for agents, for example.
  • Brand recognition: While brand recognition may not make your home sell quicker, it does offer some accountability with the brand and a sense of assurance that they will provide quality assistance.
  • A larger network: “Being a part of Keller Williams gives me a large reach,” says Winebrenner. “If I have a client moving out of state, I can potentially connect them with another Keller Williams agent in the area they are moving to. If I have a buyer who wants a specific type of home in a specific area, but haven’t yet found what they are looking for, I can reach out to my network to find out if someone knows of a listing coming on the market soon.”

Cons

  • Less room for fee negotiation: A large brokerage typically requires its agents to pay it a set percentage of fees earned. This fee structure can sometimes be set in stone, meaning the agent can’t lower their fees much.
  • Higher possibility of inexperience: With a larger organization comes more space for real estate agents who are new or not yet seasoned veterans.

Small brokerage pros and cons

Listing your home with a small brokerage will likely result in a more personalized, localized experience — but they may not have as many resources available.

Pros

  • Personalized service: A real estate agent at a small brokerage will likely have more freedom to customize and cater the experience to your specific needs.
  • Greater local knowledge: A local brokerage specializes in its own area, sometimes to a very high degree. Its brokers will have a deep knowledge of the ins and outs of the market. This can be especially helpful in small areas where there’s not much available, or in very large cities where real estate is hyper-local to specific neighborhoods.
  • Room for fee negotiation: While small brokerages might take a percentage of the agent’s commission, as well, agents there may have more wiggle room to negotiate a smaller commission.

Cons

  • Less resources: With a lower volume of commissions funding a smaller-sized brokerage, they may not be able to invest in all the latest technology or marketing tools to help with your sale.
  • Not as much brand recognition: You might not have as much familiarity with or knowledge of the reputation for a small brokerage, so be sure to do your research.

What is a boutique brokerage?

The term “boutique brokerage” typically refers to a small or extremely localized firm. It usually employs a limited number of agents and specializes in a specific niche, whether that be neighborhood, price point or home type. The client list is also often short, which means more dedicated attention for each client.

If I like my agent, does it matter what agency they’re with?

Knowing the pros and cons of small versus large brokerages can help you find the right agent to sell your home. If you are considering multiple agents, it could be helpful to compare the different types of brokerages they work for. Ultimately, though, what matters most is that you find someone you click with and feel like you can trust.

“Asking questions is really important,” says Winebrenner. “There’s the perfect agent fit for every home seller. I encourage sellers to ask questions to make sure they feel confident in who they hire. It’s important that they find someone who can represent their best interests, and confidence in that decision typically comes by asking questions to understand the agent, their company and how they do business.”

Bottom line

There are advantages and disadvantages to working with both large and small real estate brokerages. Consider what’s most important to you as you prepare to list your home. But remember, what matters most in the end is that you like your agent, not your agent’s brokerage.

Written by
Emma Woodward
Contributing writer
Emma Woodward is a former contributor for Bankrate and a freelance writer who loves writing to demystify personal finance topics. She has written for companies and publications like Finch, Toast, JBD Clothiers and The Financial Diet.
Edited by
Senior real estate editor