The Private Marketplace Reshaping Real Estate M&A

Written by:

Date:

10 Apr 2025

“In the residential real estate industry, as a broker owner, when you want to sell, you can’t tell anybody. The second you do, rumors start, and your competitors hear about it. It’s like crabs in a bucket… And so they have to keep the whole thing secret.” – Brad Clayton, President of Clayton Wolf.

Discretion can determine the success of a sale in the real estate brokerage world. Broker owners looking to exit their businesses face a challenging dilemma: how do you sell your company without letting your competition — or your agents — know you’re on the market?

The Seller’s Dilemma

For residential real estate brokerages, the traditional M&A process has been fraught with risk. The moment word gets out that a brokerage is for sale, competitors swoop in to recruit top agents, potentially decimating the company’s value before any deal can close.

Brad Clayton, President of Clayton Wolf, a valuation and M&A advisement firm based in Tempe, Arizona, has witnessed this challenge firsthand. “When a broker really wants to retire, they don’t know how much their company is worth. And secondly, they don’t know who to sell it to. The second that word gets out, they’re very limited,” Clayton explains.

Traditionally, brokers would engage firms like Clayton Wolf or Real Trends Consulting, who would then leverage their networks to identify potential buyers. Yet even the experts acknowledge the limitations of this approach. “Based on our network and assessment of the company, we’ll make a couple of phone calls, and we’ll find them one, two, sometimes three, viable buyers. But we don’t even know if we’re finding the best buyer,” Clayton admits.

A Dating App for Real Estate M&A

Drawing inspiration from an unlikely source — the dating app Bumble — Clayton and his team have developed a patented solution to this industry-wide problem. Their new platform, Fiji app, has effectively reversed the traditional M&A process.

“We’ve reversed the process where anyone in the industry interested in buying a real estate company can advertise saying, ‘Hey, I’m a buyer in Cincinnati, I’m a buyer in Phoenix, I’m a buyer in Denver,'” Clayton explains.

The platform allows broker owners who are considering selling to browse potential buyers completely anonymously. They can learn about brokers, watch videos, review promotional materials, and even connect through a private chat without revealing their identity.

“They can figure out and say, ‘I like how this particular buyer is answering my questions. They seem really educated. I know about their brokerage. They don’t even know that I’m their next door neighbor,'” says Clayton. When a seller feels comfortable, they can send a non-disclosure agreement directly through the platform, officially beginning the acquisition process.

More Than Just Matchmaking

Beyond connecting buyers and sellers, Fiji app also addresses another critical pain point for brokers: understanding valuation.

“Valuing a residential real estate company appears simple from the outside, but it’s actually quite challenging,” Clayton notes. “Valuations are costly. On average, they’re about $5,000.”

The platform offers a streamlined solution, allowing brokers to complete a valuation in under ten minutes for just $400. “As long as they have access to their latest 12-month income statement, they answer anywhere from 10 to 14 questions, put in some basic information, and immediately they can download a report and see what their value range is worth today,” he explains.

Market Momentum in 2025

After what Clayton describes as a “brutal” 2024 where “the entire industry just stopped,” M&A activity is picking up significantly in 2025.

“Now in 2025, we’re starting to see significant movement. M&A activity is picking up right now. Valuations are picking up,” Clayton reports. “The year is just starting, so we expect more consolidation and movement, especially in 2025.”

Certain geographic markets are particularly active. “California right now, very hot. We’re seeing tremendous movement,” Clayton notes. The Middle Eastern Seaboard from Connecticut through Georgia is also seeing significant activity, with North Carolina and the greater Dallas-Fort Worth area in Texas generating numerous inquiries.

Industry Polarization

Clayton also observes a continuing trend of industry polarization, with both the largest and smallest companies positioned to thrive.

“The larger companies are absolutely going to thrive because they’ve got tools and systems available. They’ve got economies of scale and synergies,” he explains. At the other end of the spectrum, “boutiques, fast, nimble. These are the firms that specialize in a particular niche, or they’ve been in business for 40-50 years, and the community knows them.”

It’s the middle that may face challenges. “We’re going to see the middle start to condense,” Clayton predicts, though he cautions against the industry cliché that “if you’re stuck in the middle, you’re just going to get eaten up,” calling it “not necessarily entirely true.”

Building Value in Uncertain Times

For brokers not yet ready to sell, Clayton advises focusing on fundamentals. “Even if you’re not building it for sale, it’s a great time to take a look at all your expenses and identify where you might be overspending or what you no longer need.”

He also emphasizes the importance of listening to agents and strengthening value propositions. “Start really focusing on building the value of what you offer as a brokerage. That will multiply in spades for you, especially this year, because of the amount of movement that we’re already seeing.”

With plans to expand Fiji app to include property management, escrow, title, and mortgage companies by mid-year, Clayton is positioning his platform to become the comprehensive private marketplace for real estate industry M&A, addressing a problem that has long plagued the sector.

“This is not a ‘me too’ product,” Clayton emphasizes. “We have invented a new category. We own the patent on it, and we’ve put together an incredible team. I created this because we want to help brokers solve a real issue.”

For more information on Clayton Wolf and their new platform, visit fijiapp.com.