The immense potential for transformation and expansion encourages major capital investors and private equity companies to commit substantial resources. The magnitude of their investments signifies the feasibility of the overlooked prospects across various sectors. In this environment, it is significant to highlight that private equity firms have turned their attention to the real estate market in recent years, pouring billions into cutting-edge technology aimed at creating new efficient systems that would unlock greater market opportunities.
The overall framework requires investors to assess the serviceable available market (SAM) and the total addressable market (TAM). This assessment enables them to gauge the need for a particular service or product along with the market share they can feasibly address. Focusing on the real estate brokerage framework, the SAM encompasses transaction fees related to property sales and purchases. It also involves ongoing revenues generated from associated brokers and agents.
More established brokerages tend to generate additional revenue through supplementary services like mortgages and insurance, which play a significant role in the overall SAM. This results in multiple revenue channels, enhancing the value proposition for the brokerage.
Private equity firms have excelled in challenging conventional models by infiltrating the real estate sector. These firms recognize that new players in the market aim to cut costs, streamline processes, and provide enhanced services via advanced technology. Their goal is to assist companies in seizing market opportunities they previously viewed as unattainable, consequently broadening the SAM and TAM while improving the unit economics of the real estate service model.
United Real Estate has pioneered a business framework that transcends the limits of the traditional transaction-based brokerage structure. This national brokerage, known for its presence in key international markets, is committed to scaling its operations to provide agents and brokers with maximum compensation. This initiative, which deviates from conventional methods, aligns with United’s overarching goal of enhancing the outcomes and profitability of its affiliated brokers and agents.
The innovative company offers its agents compensation rates that are 30% to 60% higher than those provided by other models, fostering a solid partnership with its agents. This ultimately results in enhanced retention and lower customer acquisition costs, thereby ensuring growth and expansion into new market segments.
