Most brokerage owners don’t start their companies thinking about selling them.
They start them because they want to build a culture they believe in, a place where agents are supported and a company that reflects their values and vision for the business.
But those values, while mission-critical, aren't what make a brokerage saleable. Instead, the best way to build a brokerage that you might one day sell is to focus on the qualities that make the business healthy, durable and scalable.
Recently, I spoke with Lisa Piccardo of T3 Sixty, a firm that advises brokerages on valuation, mergers and acquisitions. Our conversation revealed a reality that may surprise many brokerage leaders: The things owners often think are valuable in their business are not always the things buyers care about.
She confirmed that the things buyers do care about are often the same fundamentals that make a company strong in the first place. Here are the six elements to take into account and why they matter.
Productivity Generally Trumps Agent Count
One of the most common misconceptions in real estate brokerage is that bigger automatically means more valuable. Piccardo says that’s not necessarily true.
“People often think agent count is the primary driver,” she tells me. “But buyers are usually looking more closely at profitability and agent productivity.”
In other words, a brokerage with fewer highly productive agents may be far more attractive than a large company filled with marginal producers.
Of course, strategy matters. Some companies are chasing market share and scale. Others are looking for high-performing firms that fit a particular model.
But in most cases, productivity and profitability carry far more weight than sheer size.
Profitability Still Rules
Real estate is full of companies that generate impressive top-line numbers. But when it comes to acquisitions, buyers ultimately focus on what’s left after the expenses.
“In brokerage acquisitions, valuation is typically based on EBITDA,” Piccardo explains.
“Earnings before interest, taxes, depreciation and amortization” is a financial metric that calculates how much a business has made before the necessary and required cost of doing business. Buyers are interested in this because they want to understand how efficiently a brokerage converts revenue into actual profit. It sounds obvious. But in practice, many companies struggle here.
“Many brokerage owners don’t fully understand their financial structure,” Piccardo says.
Expenses may be categorized inconsistently. Cost of sales may be blended with operating expenses. Personal expenses sometimes run through the business without clear documentation. All of that makes valuation harder. And more importantly, it makes the business harder to manage.
Clean Financials Are Not Optional
If there’s one foundational step every brokerage owner should take, it’s getting the financial structure right.
Compensation, lead generation costs and production-based bonuses should be clearly categorized as cost of sales. Operating expenses should be separated accordingly.
Owners should also understand which expenses reflect the ongoing operation of the brokerage and which are owner-specific costs that a buyer may view as discretionary. For example, if the brokerage pays for the owner's personal vehicle or cell phone, a buyer may evaluate whether those expenses would continue under new ownership and adjust the company's earnings accordingly.
"It's common for owners to have certain personal benefits running through the business," Piccardo says. “But you need to clearly identify those so the true profitability of the company is visible.”
If the Brokerage Is You, It’s Hard to Sell
Another major issue in brokerage valuation is owner dependency.
Many real estate companies are deeply tied to their founders. The owner recruits the agents, manages the culture, solves every problem and sometimes still produces significant sales volume. That’s admirable, but it creates risk.
“If the owner is responsible for a large percentage of the production or decision-making, it can make the company much harder to sell,” Piccardo says. Buyers want to know the business will continue operating if the founder steps away. That’s why many brokerages eventually start building a leadership bench—presidents, COOs or operational leaders who help run the organization.
This is a logical and necessary step at a certain level, because no company should depend entirely on one person.
Culture Still Matters
While financials are most critical, culture also plays a role in whether acquisitions succeed.
Piccardo has seen situations where merging companies looked compatible on paper but struggled once the integration began.
“Cultural alignment is a big factor,” she says. A brokerage known for high productivity may not mesh well with a company built around a completely different model. At the end of the day, real estate companies are collections of people and relationships. When those cultures collide, the math alone doesn’t solve the problem.
The Hidden Deal Killers
Interestingly, some of the biggest surprises in brokerage transactions come from operational details—technology contracts, equipment leases and staffing structures, the “boring” stuff.
“These are the kinds of things owners often overlook,” Piccardo says. For example, if a brokerage has signed long-term technology agreements, a buyer may not want to inherit them. Similarly, unclear organizational structures can create complications during due diligence.
“We recently worked with a large brokerage where no one had formal job descriptions or performance metrics,” Piccardo says. For buyers evaluating a company, that lack of clarity can raise red flags.
Why This Matters Even if You Never Sell
The lesson from these conversations isn’t that every broker should be preparing for an exit. Rather, it’s that the disciplines that create a sellable brokerage are the same disciplines that create a strong one.
- Clear financials.
- Defined leadership roles.
- Operational structure.
- Strategic awareness of how the business actually performs.
At T3 Sixty, Piccardo’s team often conducts a full “360 business review” with brokerage clients—evaluating everything from recruiting and profitability to marketing and website performance.
The results can be eye-opening.
“Sometimes owners discover things they didn’t even realize were happening in their business,” Piccardo says.
Her audits have surfaced issues like broken website pages, inefficient staffing structures and financial blind spots. Those discoveries are valuable to brokers, whether a sale is on the table or not.
The Real Goal
Real estate is a relationship-driven industry. Most broker-owners build companies not as financial assets, but as communities. That said, strong communities still need strong businesses behind them.
So even if selling your brokerage is the last thing on your mind, it’s worth asking an important question: If someone wanted to buy this company tomorrow, would it be ready?
If the answer is yes, chances are you’ve built a brokerage that can thrive for the long haul.
