Real Estate's Volume Problem Is Now a Margin Problem

Written by:

Alejandra Rodriguez

Date:

11 Aug 2026

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Home values have climbed steadily in most U.S. markets, but transaction volume remains well below the peaks of 2020 and early 2021. That gap matters more than it might seem: brokerages earn money on deals closing, not on values rising, and when fewer transactions clear, revenue falls even as the cost of running a brokerage – technology, agent retention, growth initiatives – keeps climbing. The result is a margin squeeze that has left many firms looking for outside operational expertise, a category that has historically been thin in residential real estate.

Finance, law, and healthcare all have deep benches of specialized consultants. Residential real estate does not, and the reason appears to be structural rather than a lack of demand. People with deep brokerage knowledge have tended to move laterally within the industry – firm to firm – rather than stepping off the transaction side to build advisory practices. “So many people have just bounced from firm to firm versus leaving and going and saying, ‘I no longer want to represent clients, I want to consult for a brokerage.’ It just never happened,” says Briggs Elwell, CEO of RLTYco, one of a small number of firms that have recently moved into brokerage consulting.

The Margin Problem in a Flat Market

The pressure itself isn’t new, but it has intensified. Brokerages that have operated the same way for decades now need to find efficiencies without the transaction volume to fund experimentation. Many of the largest firms outside of Compass have run on brick-and-mortar models and client engagement approaches that haven’t changed substantially in years; a firm with 10,000 agents may not have examined its cost structure or organizational design in a long time. “If you are not making more money, how do you continue to invest in growth?” Elwell says.

That gap has begun drawing outside consultancies, RLTYco’s among them, positioning themselves as neutral operators for firms rethinking how they’re organized. Elwell says he can currently identify only two or three firms with any long-standing reputation in brokerage consulting specifically, a sparse field compared to the hundreds of established firms serving finance or legal.

The Independent Contractor Benefits Gap

A related, longer-running problem sits underneath brokerage economics: most real estate agents work as 1099 independent contractors rather than employees, which means they typically miss out on the group benefits, structured tax treatment, and retirement infrastructure that salaried professionals take for granted. Brokerages face a structural constraint in closing that gap themselves – offering too many benefits to contractors risks triggering employee reclassification under government scrutiny – which has opened space for third-party providers to step in without that legal exposure.

RLTYco’s version of addressing this grew out of its original commission-advancing business, which offers agents early access to earned commissions before a deal closes. While underwriting those advances, the company says it noticed a recurring pattern in agents’ tax filings: many file as individuals rather than through a business entity, exposing themselves to liability risk and forfeiting available tax benefits. “They often jump over the foundational things that are necessary to launch a business because they look at it as, ‘I’m just one person coming out here to sell houses,'” Elwell says. “You’re actually your own business. You’re a business within a business.”

Only half of all licensed U.S. agents work full-time, according to Elwell’s estimate, a population he argues is large enough to access the same group-rate benefits, from healthcare to insurance discounts, that employees receive at larger companies. The broader retirement-savings question follows a similar logic: agents’ income is often irregular, with some closing one or two deals a year, which makes consistent saving difficult even before accounting for the lack of employer-matched plans available to independent contractors.

What This Means for Agents and Brokerages

The scarcity of brokerage consulting and the gaps in contractor benefits point to the same underlying shift: as transaction-based revenue tightens, both brokerages and the roughly two-thirds of agents working full-time are looking for infrastructure – operational expertise, tax and legal support, group benefits – that the industry’s traditional structure was never built to provide. Whether that gap gets filled by a handful of specialized firms or by broader change in how brokerages and agents are organized, the underlying need is unlikely to go away as long as transaction volume stays below its recent peaks.

About the Expert: Briggs Elwell is CEO of RLTYco, a firm operating in brokerage consulting and commission-advancing services for real estate agents and brokerages.

This article is based on information provided by the expert source cited above. It is intended for general informational purposes only and does not constitute legal, financial, or real estate advice. Readers should conduct their own research and consult qualified professionals before making any real estate or financial decisions.