The middle-sized broker may be going the way of other middle-sized businesses. Oblivion.

Cendant has just about absorbed every independent brokerage firm in Silicon Valley. Large independently held companies such as Fred Sands in California and Henry S. Miller in Texas are expanding by improving their market share street corner by street corner. Sands has just announced expansion plans northward to the Seattle region and also into Nevada. Miller is buying key boutique competitors such as Clements Realty, Allie Beth Allman Real Estate and Judge Fite. And the trend continues across the country.

What is left are mom and pop operations with a large gap in middle-sized brokers, according to Sandicor's, Bill Stegall. "We serve over 8,300 licensed agents in San Diego County in 2,400 offices. Sixty percent of those offices are one-broker operations. I think our customer base reflects society in general - you either have the little guy or the mega broker, with very little in between.

Head of the nation's second largest MLS, Dale Ross, says, "I think the trend has been there for years, larger firms have grown and are getting larger and the boutique firms are still active players in their market. The mid-sized companies can play a role, but as large franchises move in and take market share, it could come from the mid-sized broker. I think what will happen is that as larger franchises acquire larger companies in the marketplace, they will come down to the next tier, which is the mid-sized broker.

"There is still a role for the mid-sized broker. Each market is unique, some mid-sized brokers have been long term players and are well-positioned to retain their market share. In our geographical area, we have a lot of sub-markets," explains Ross. "MRIS covers parts of Washington D.C., Maryland, Virginia, the eastern panhandle of West Virginia, Pennsylvania, and Delaware."

Pat Bybee president and CEO of Metrolist Inc. in the Denver area says that every region has its own snapshot. As RE/MAX's back yard, the Denver area has a larger number of strong independents than other areas. She says, "This is an attractive market for the one-person shop. In our region we have over 13,000 agents in 3,300 offices. About 2,700 of those offices have one or two agents."

Bybee notes that her figures are based on offices, not firms. "There is an office suite concept called MetroBrokers, another 100% concept like RE/MAX where the brokers share the facilities. So out of those 2,700 offices, 1000 of them are Metro Brokers."

"About 4,000 or one-third of our agents are in the mid-range, and about 16 percent are in larger offices."

Published: July 25, 1998

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