A brokerage business model connects buyers and sellers, earning income through commissions, fees, or flat rates. Brokers profit via transaction fees, advisory services, margin lending, and referral income. Today’s models range from full-service to flat-fee platforms with leaner overhead.
In most cases, brokers have the potential to make more than agents, but it depends entirely on the brokerage business model they run.
At Realty Hub, we’ve built a structure that flips the old commission-split system on its head. Instead of the outdated model where brokers take a large percentage of every agent’s earnings, we operate on a flat-fee platform where agents keep 100% of their commission.
If you want to understand why brokers make more, which models work best today, and how you can build a profitable brokerage without the headaches, keep reading. We’ll break down every major brokerage model step-by-step so you can decide which path fits your goals.
What Is a Brokerage Business Model?
At its core, a brokerage business model connects buyers and sellers who wouldn’t easily find each other on their own. The broker acts as a neutral middleman, helping both parties complete a transaction smoothly, whether it’s buying a home, trading stocks, or purchasing insurance. In exchange, brokers earn fees or commissions for facilitating these deals.
Brokerages make money through several channels:
- Transaction commissions, a percentage or flat fee on each sale
- Service fees, charging for advisory services or premium support
- Other revenue streams, such as lending, managing client funds, or referral fees
Today, businesses operate under several types:
- Full-Service Brokerages: Provide hands-on advice, full support, and charge higher fees for premium service.
- Discount Brokerages: Rely on automation and self-service tools with minimal human interaction, offering lower fees.
- Flat-Fee Brokerages: Charge a predictable flat rate per transaction, allowing agents to keep 100% of their commission.
- Referral-Only Models: Focus on connecting clients to other agents and earning a portion of the referred commission.
At Realty Hub, we operate as a flat-fee brokerage, allowing our agents to keep everything they earn while still accessing the compliance, transaction management, and support they need.
How Do Brokerages Make Money? (With Examples)
Traditional Revenue Streams
For decades, most brokerages earned their income through familiar methods:
- Commissions: Taking a percentage of every agent’s transaction, sometimes 30% or more, before the agent gets paid.
- Asset Management Fees: In financial brokerages, many charge wrap-fees, usually 1-3% of a client’s assets under management, in exchange for ongoing portfolio oversight.
- Margin Lending Interest: Allowing clients to borrow money to invest, then earning interest on those loans.
Modern Revenue Streams
Today’s brokerage landscape has evolved with technology, offering new ways to profit:
- Payment for Order Flow (PFOF): Brokers, especially in stock trading, sell their clients’ trades to market makers who profit from executing the orders.
- Securities Lending: Loaning out securities held in client accounts for additional revenue.
- Advisory Upsells: Selling higher-tier financial planning or proprietary products with recurring fees.
- Uninvested Client Cash: Brokers reinvest client idle cash and pocket the interest spread.
Are Brokerage Business Models Profitable?
Absolutely, but profitability depends entirely on the structure you build.
- Traditional models scale by taking a cut from many agents.
- Virtual, flat-fee models scale by eliminating unnecessary overhead.
At Realty Hub, we’ve seen firsthand how lean models lower costs dramatically. Without brick-and-mortar offices, bloated management, or franchise fees, we operate efficiently while delivering meaningful broker support.
Referral income can also build significant revenue streams, especially when you attract part-time, investor, or referral-only agents who want low-cost license maintenance but still generate occasional commissions.
Of course, no model is bulletproof. Competition is fierce, technology is compressing margins, and regulations constantly shift. But for brokers willing to break from outdated structures, the opportunity is larger than ever.
The 4 Common Types of Brokerage Models
Full-Service Brokerage
This is the most traditional model. Full-service brokerages provide hands-on support, in-depth advice, and concierge-level guidance for their clients. These firms typically employ large teams of brokers, advisors, trainers, and administrative staff. In exchange for this high-touch service, they charge higher fees, often taking a significant portion of agent commissions or charging clients substantial asset management fees.
Discount Brokerage
Discount brokerages cut costs by streamlining operations through technology. Clients handle most of their own transactions using online platforms or apps. These brokerages attract customers with low fees and minimal human interaction, relying on self-service tools rather than personal advisors. In real estate, this translates to agents who pay a small split or flat transaction fee with limited back-end support.
Flat-Fee Brokerage
The flat-fee model has disrupted traditional brokerage structures. Instead of taking a percentage of agent commissions, these brokerages charge a predictable, fixed fee per transaction. For example, at Realty Hub, agents pay $100 per year plus $100 per closing. Agents keep 100% of their earned commissions. This model allows agents to build wealth on their own terms while still accessing the legal support, compliance systems, and broker oversight required by law.
Referral-Only Brokerages
Referral models allow agents to generate income by referring clients to other agents. The referring agent earns a portion of the commission when the deal closes. These models appeal to agents who prefer not to actively engage in daily transactions but want to monetize their network. Realty Hub supports both active and referral-only agents, offering unique flexibility rarely found in the industry.
Common Worries About Brokerage Models
With innovation comes hesitation. We hear these concerns often:
- Can flat-fee models survive long-term?
Answer: Yes, when built with lean infrastructure and agent autonomy. Flat-fee models thrive by attracting self-motivated agents seeking independence and higher take-home pay. However, they require strong compliance systems and responsive broker support to remain sustainable. - Are order flow models ethical?
Answer: In stock brokerages, payment-for-order-flow raises valid concerns. Brokers profit by selling trade execution access to market makers, which can create conflicts of interest for retail investors. In real estate, thankfully, this practice doesn’t apply, your deal is always your deal. - Will regulations limit newer models?
Answer: Regulatory environments constantly evolve. Some financial and real estate innovators fear that governments may clamp down on disruptive models. That’s why brokerages like Realty Hub remain hyper-focused on compliance, legal soundness, and agent protection. - Is state licensing a barrier for new broker founders?
Answer: In most states, broker licensing requires agents to gain years of experience before opening a brokerage. But there are solutions, entrepreneurs can legally hire experienced licensed brokers to run day-to-day operations while owning the firm’s infrastructure.
7 Tips to Build a Successful Brokerage Today
If you’re building a brokerage business today, here’s the model that’s working:
- Simplify pricing: Flat-fee structures eliminate confusion and attract agents seeking predictable income.
- Lower overhead with virtual infrastructure: Skip the office space, bloated staff, and expensive franchises.
- Allow agent autonomy: Agents want “support when you need it, independence when you don’t.”
- Offer real compliance & licensing support: Protect agents while giving them the freedom to run their business.
- Build trust through transparency: Avoid misleading promises and complex revenue models.
- Serve part-time, investor, and referral-only agents: Diversify your agent base while maximizing license utilization.
- Stay flexible on MLS/Realtor membership: Don’t force association dues if agents don’t need them.
The Future of Brokerage Models
- Technology is rewriting the brokerage playbook. Complex fee structures, bloated overhead, and forced office culture are giving way to leaner, smarter models that prioritize efficiency and agent autonomy. The brokers who will thrive are those who simplify their platform, leverage technology, and focus on delivering real value, not outdated prestige.
- Niche expertise matters more than size. Clients and agents alike care less about the brand name on the door and more about who gives them flexibility, transparency, and control over their earnings.
- Agents increasingly seek independence. The new generation of real estate professionals doesn’t want micromanagement, mandatory meetings, or complicated commission splits. They want to run their business, keep more of what they earn, and still have reliable broker support when needed.
Ready to Build Your Business on a Smarter Brokerage Model?
For agents and brokers tired of the old rules, Realty Hub was designed to flip the script.
Here’s what we offer:
- Flat-Fee Simplicity: Pay just $100/year plus $100 per closing, and keep 100% of your commission. No splits. No desk fees. No franchise cuts.
- Full Broker Support Without the Hand-Holding: Access real-time broker guidance, document compliance systems, E&O insurance, and licensing support, all while running your business independently.
- Virtual Infrastructure That Works: Eliminate the costs of office space, staff overhead, and unnecessary tech packages. You get the platform, you control how you work.
Who is Realty Hub perfect for?
- Agents who want freedom, efficiency, and real take-home income.
- Experienced professionals ready to own their career without franchise restrictions.
- Part-time agents, investors, and referral agents looking to maintain their license without paying thousands in dues.
The choice is simple: Keep splitting your commissions under an outdated model, or build your real estate career on a platform that finally puts you first. At Realty Hub, you’re the boss. We’re just the infrastructure.
If you’re ready to stop giving away your hard-earned income, explore how Realty Hub works.
