What is a Brokerage Firm?

Every career in real estate begins with one key connection–the brokerage firm. Whether you’re just starting out or exploring how agents and brokers work together, understanding the role of a real estate brokerage firm is essential to navigating the industry. 

Brokerage firms are the link between individual agents and salespersons and the larger real estate market. They provide structure, training, and legal oversight so professionals can focus on helping clients buy, sell, or lease property. In many ways, the brokerage you work with shapes your entire experience in real estate, from how you learn the business to how you grow your career. 

In this guide, we’ll explore what defines a brokerage firm, how different types of brokerages operate, and what to consider when choosing one that aligns with your goals. 

What is a Brokerage Firm in Real Estate?

A real estate brokerage firm is the licensed business that connects agents, brokers, and clients within the housing market. It serves as the foundation of nearly every real estate transaction–providing the legal authority, structure, and support that allows agents to represent buyers and sellers.

In simple terms, a brokerage firm (or brokerage company) is a licensed entity where real estate professionals work under the supervision of a managing or principal broker. This broker holds the license required by the state to oversee transactions, ensure compliance with real estate laws, and safeguard client interests.

A helpful way to understand this is to look at a real example. Firms like RE/MAX, Keller Williams, and Coldwell Banker are well-known real estate brokerages. Each operates under a licensed broker who supervises the agents working within the firm. While the brand names are recognizable, it’s the brokerage structure behind them that provides agents with legal oversight, training, and the authority to represent buyers and sellers. 

Here’s how it fits within the industry:

• Brokerage Firm: The business itself–registered, insured, and licensed to conduct real estate activity.
• Broker: A professional who holds a broker’s license and manages the firm, supervising agents, and reviewing contracts.
• Real Estate Agent or Salesperson: A licensed professional who works on behalf of clients under a brokerage’s supervision and cannot operate independently. 

Every state requires agents to affiliate with a licensed brokerage to practice legally. This structure ensures consumer protection, professional accountability, and ethical standards in every transaction.

For newcomers to the field, this setup means that joining a brokerage isn’t optional–it’s the next essential step after earning your real estate license. And for clients, it’s a reminder that every home purchase or sale involves not just an agent or salesperson, but also the brokerage company that stands behind them.

What Does A Brokerage Firm Do?

A real estate brokerage firm does much more than hang licenses on the wall or split commissions. It’s the engine that keeps real estate professionals moving–offering guidance, structure, and resources so agents can focus on helping their clients.

A brokerage firm exists to ensure every real estate transaction runs smoothly, ethically, and in compliance with state regulations. Here are a few of the key roles and functions of a brokerage firm:

• Provides oversight and accountability. Every deal an agent completes goes through their brokerage for review. Brokers check contracts, disclosures, and timelines to ensure everything meets state and federal requirements.
• Offers training and professional support. Especially for new agents, a brokerage can feel like a built-in mentor. Many firms provide onboarding programs, continuing education, and hands-on coaching to help agents grow their skills and confidence. 
• Handles business operations. From managing trust accounts to maintaining office technology and marketing systems, brokerages take care of the behind-the-scenes logistics that allow agents to focus on their clients. 
• Creates a legal and ethical safety net. Since brokerages are licensed entities, they carry responsibility for their agents’ actions. This means clients have additional protection when something goes wrong, and agents have guidance when complex situations arise.

How Does A Real Estate Brokerage Make Money?

A real estate brokerage earns money by supporting the agents who represent buyers and sellers. While the exact structure can vary from one firm to the next, most brokerages generate revenue through a combination of the following:

• Commission Splits: When an agent helps a client buy or sell a property, the commission earned from the transaction is shared between the agent and their brokerage. The percentage each receives depends on the firm’s compensation model, the agent’s experience, and the local market norms.
• Monthly or Desk Fees: Some brokerages charge their agents a flat fee, often monthly, to cover office space, technology, marketing tools, and administrative support. These fees help fund day-to-day operations and allow the firm to offer resources its agents rely on.
• Transaction Fees: Certain firms apply a per-transaction fee that agents pay each time they close a deal. This helps the brokerage maintain compliance systems, document processing, and staff support that ensure each transaction meets regulatory standards.
• Training, Coaching, and Service Add-Ons: A smaller portion of brokerage income may come from optional services such as enhanced marketing packages, coaching programs, or lead-generation tools that agents can purchase to grow their business.

Brokerages earn their revenue by creating an environment where agents can succeed–providing oversight, tools, education, and support that help real estate professionals represent clients effectively.

Types of Brokerage Firms in Real Estate

No two brokerage firms operate exactly alike. Their size, culture, and approach to business can vary widely, and those differences often shape how agents grow and how clients experience real estate. Understanding the types of real estate brokerages helps you see what sets each model apart. 

Here are the most common kinds you’ll encounter:

• Franchise Brokerages: These large, nationally recognized brands–like RE/MAX, Keller Williams, or Century 21–combine local ownership with the backing of a well-known name. Franchise brokerages often provide in-depth training, marketing resources, and brand credibility that can help newer agents build trust quickly.
• Independent or Boutique Brokerages: Locally owned and operated, boutique firms tend to emphasize community relationships and hands-on support. With smaller teams and flexible business practices, they often foster closer mentorship and more personalized service.
• Virtual or Cloud-Based Brokerages: Technology-driven firms, like eXp Realty or REAL Broker, conduct nearly all operations online. Agents collaborate through virtual offices, complete transactions digitally, and often enjoy lower overhead costs. This model appeals to those who value autonomy and a remote work environment.
• Specialized Brokerages: Some companies focus on specific markets or property types. These include residential firms that handle homes and condos, commercial brokerages that manage office or retail space, and niche firms that specialize in areas such as waterfront properties, luxury homes, new construction, or vacation rentals. 

How to Choose the Right Brokerage Firm

Once you’ve earned your real estate license, the next big decision is finding the brokerage that fits you best. The choice can shape your early career–impacting everything from your income potential to the kind of mentorship and support you receive. 

When comparing brokerages, it helps to look beyond the name on the door and focus on what truly matters:

• Training and Mentorship: New agents often learn the ropes through their brokerage. Look for a firm that offers structured on-boarding, access to experienced mentors, and continuing education opportunities to help you grow and learn.
• Commission Structure and Fees: Every brokerage handles earnings differently. Some take a higher percentage in exchange for strong support systems, while others offer larger splits but expect agents to manage more independently. Make sure the math works for your goals and experience level.
• Company Culture and Values: You’ll be spending a lot of time with your colleagues and leadership team. Visit the office, attend meetings, and pay attention to how agents collaborate. The right environment should motivate you–not drain your energy.
• Technology and Marketing Tools: Modern real estate moves fast. Choose a brokerage that provides up-to-date tools for listings, marketing, and client communication. The right technology can save you hours and help you stay organized. 
• Reputation and Market Presence: A well-known brokerage can boost credibility, especially when you’re new to the field. Research how the firm is viewed by both clients and agents in your area–reviews and word-of-mouth can tell you a lot.

Why the Brokerage Firm Matters in a Real Estate Career

Behind every real estate transaction, there’s more than an agent and a client–there’s a brokerage ensuring that everything runs smoothly and legally. The strength of that firm often determines how well the entire process works. 

Here’s why the brokerage firms play such a critical role in the real estate industry:

• They uphold professional standards. Brokerage firms set the tone for how business is done. They reinforce ethical practices, ensure agents follow state regulations, and maintain the trust that keeps the industry credible in the eyes of the public.
• They create consistency for clients. Whether buying, selling, or leasing, clients rely on brokerages to provide oversight and dependable service. A strong firm helps ensure transactions follow the same high standards across every agent and office.
• They keep the housing market moving. By connecting licensed professionals, buyers, and sellers under one umbrella, brokerage firms make large volumes of real estate activity possible. Without them, the process would lack organization, accountability, and efficiency. 
• They support long-term careers. Brokerages give real estate professionals a home base–a place to grow and refine their skills. Even seasoned agents benefit from the structure and resources a brokerage provides. 

How Real Estate Brokerage Licensing Works in the U.S.

Real estate in the United States is highly regulated, and for a good reason–it protects both professionals and the clients they serve. Every state has its own licensing laws and oversight systems, but the overall framework follows the same basic idea: brokers supervise, agents represent, and the state enforces compliance. 

Here’s how real estate brokerage licensing typically works:

• Brokerage Licensing: To open or manage a brokerage firm, an individual must earn a broker’s license, which requires additional coursework, professional experience, and a state-administered exam. Once licensed, brokers can operate a firm and employ or contract licensed real estate agents under their supervision.
• Agent Affiliation: Real estate agents and salespersons cannot work independently. They are legally required to affiliate with a licensed brokerage, which handles oversight, ensures all transactions meet state laws, and maintains proper record keeping and trust accounts.
• Broker Supervision: The managing or principal broker is ultimately responsible for all activities conducted under the brokerage. This includes reviewing contracts, managing client funds, and ensuring agents follow ethical and legal standards.
• State Oversight: Each state operates a governing body–such as the California Department of Real Estate, the Texas Real Estate Commission, or the Florida Real Estate Commission–to issue licenses, enforce rules, and investigate complaints.
• Consumer Protection: These licensing requirements aren’t just red tape–they protect clients by ensuring that anyone representing them in a real estate transaction meets education, ethics, and performance standards.

Future of Real Estate Brokerages: Emerging Trends Shaping the Industry

The real estate brokerage model has been around for decades, but it’s changing faster than ever. Technology, evolving client expectations, and shifts in how agents work are redefining what a brokerage firm looks like and how it operates. 

Here are some of the key real estate brokerage trends shaping the industry’s future:

• Technology-Driven Operations: Brokerages are increasingly adopting digital platforms that handle everything from client management and virtual showings to e-signatures and AI-assisted marketing. Tools that once felt optional–such as CRM software, transaction management systems, and mobile apps–are now essential for efficiency.
• Rise of Virtual and Hybrid Brokerages: The popularity of cloud-based firms shows a growing preference for flexibility. Many agents now prefer remote collaboration, virtual meetings, and digital paperwork over maintaining traditional office space. 
• Shifts in Commission Models: Traditional commission splits are being challenged by new structures, including flat-fee and capped-commission systems. These models give agents more earning flexibility and are attracting professionals seeking greater autonomy. 
• Greater Focus on Education and Compliance: As regulations evolve and transactions grow more complex, brokerages are placing greater emphasis on continuing education and ethics training. Staying current isn’t just a competitive edge; it’s a compliance requirement.
• Consumer-Centric Experiences: Today’s clients expect more transparency, faster communication, and data-backed insights. Brokerages are responding by using technology to personalize listings, streamline communication, and make the buying or selling process simpler. 
• Sustainability and Community Impact: A growing number of firms are aligning their brands with environmental and social values–promoting energy-efficient housing, supporting local causes, and integrating sustainability messaging in their marketing efforts.

Start Your Real Estate Career with Kaplan

A strong understanding of how real estate brokerage firms operate gives you a foundation to build a successful career. The next step is getting the education and credentials to open doors in the industry. With Kaplan, you can:

• Prepare for your licensing exam with expert-led online courses built around your state’s requirements.
• Develop career-ready skills through continuing education and professional development courses. 
• Learn from experienced instructors who understand real-world real estate practice.

Start your path toward a rewarding real estate career with Kaplan–where quality education meets industry expertise.