Residential & Commercial Real Estate Brokerages
| Low | 1.5× |
| Median | 2.2× |
| High | 3.5× |
| Low | 2× |
| Median | 3× |
| High | 4.5× |
A mid-size residential brokerage with $350K SDE and strong agent retention (80%+ annual agent retention) typically sells for $525K–$1.225M (median 2.2× SDE). Brokerages with significant commercial transaction revenue and property management books can command 2.5–3.5× SDE.
The U.S. residential real estate market generates ~$2.3 trillion in transaction volume annually (NAR 2024), with agent commissions representing $85–100B. Commercial real estate adds another $50B+. Brokerages are highly sensitive to interest rate cycles — volume dropped 20%+ in 2023–2024 as mortgage rates hit 7–8%, crushing transaction volume and agent income. Brokerages with commercial or property management revenue have more stable earnings that smooth the residential cycle.
Contact-based value drivers — buyer due diligence essential.
SBA loans for real estate brokerages are available but lenders view the industry as highly cyclical. Brokerages with property management revenue (5–10% of revenue) and commercial transactions (higher ticket = fewer transactions needed) are more financeable. Approval rates 62–68%. Most buyers are agents who want to move into a leadership role, often financed through personal assets + seller carry.
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Open Business Valuation Calculator →Current mortgage rate environment (7–8% in 2024–2025) has suppressed transaction volume ~20–25% vs 2021 peaks. This creates a buyer's market for brokerages — lower transaction volumes mean lower SDE, which means lower acquisition prices. But the key question is: do you believe transaction volumes will recover? If rates drop to 5–6% (a plausible 2–3 year scenario), transaction volume could recover 30–40% and the SDE you buy today could double. Brokerages bought at 2× SDE in a low-volume market and sold at 3× SDE when volume recovers is the classic real estate play.
Three revenue streams in order of stability: (1) Property management: recurring monthly revenue that doesn't depend on transaction volume. Brokerages with 15%+ of revenue from property management are more stable and command higher multiples. (2) Commercial transactions: higher ticket ($20K–$200K+ per deal) means fewer transactions needed and wealthier clients who are less rate-sensitive. (3) Residential transactions: cyclical and rate-sensitive. Target: at least one of these three is recurring/contractual to smooth transaction volume swings.
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