Dan Duffy, CEO, United Real Estate
Illustration by Lanette Behiry/Real Estate News

Why United’s CEO isn’t interested in ‘shiny’ downline models 

United boosted agent count in 2023, but not with rev share or stock incentives. CEO Dan Duffy shared his thoughts on why the flat-fee model is a win for agents.

February 20, 2024
5 minutes

Key points:

  • Duffy said United’s double-digit agent count growth last year was “all organic.”
  • When agents do the math, he said, some are realizing the rev share model isn’t for them — and moving to firms like United that offer other benefits, like health care.
  • In this market, he doesn’t think going public would be “an appropriate way to induce someone to join you or to retain them.”

While many real estate companies were just trying to make it through a challenging year, the flat-fee brokerage United Real Estate experienced double-digit growth in agent count, surpassing the 20,000 mark in 2023.

The company isn't attracting agents with the promise of revenue sharing or stock grants. Instead, it offers benefits like health care and financial planning as it competes with other brokerages to recruit and retain top talent. 

United Real Estate CEO Dan Duffy talked with Real Estate News about the company's growth and why he believes United's flat-fee model makes more sense to working, professional agents than downlines and revenue shares. This interview has been edited for length and clarity.

Your company reported 13% growth in agent count in 2023. What was your strategy, and what kind of agents or teams are you trying to attract?

All of our growth last year was organic — all of it. In prior years, our growth was largely driven by both organic and mergers and acquisitions, but in 2023, it was all organic. 

We're focused really on three cohorts. One is people who are experienced and very productive. And we have special incentive programs for our agents to refer people like that to us. Another is teams and small brokerages that can make their team or brokerage more efficient but still maintain ownership in the brokerage, either through a franchise or by becoming part of one of our hubs. And then we are interested in inviting serious newly licensed agents.

The mix is weighted way more to the experienced agents, but we do have mentorship programs that help serious people who have recently gotten their license make the move into real estate. For the first few deals, they pay a split, and that's shared with their mentor who is a very successful real estate professional. And then they're on 100% commission if they want to be.

How does your flat-fee model stand up to newer models like downlines and revenue shares?

When some of the downstream rev share models first came out, they looked very, very shiny — but when agents looked at their personal results from it, they discovered that some of those downstream rev share models only served to amplify their exposure to the real estate market.

For some people, because they have enough in their downstream, or they got in early enough where the math is working, it's rolling up to them and it's fine. But especially in this market, people who are paying their fees and their dues don't want to be recruiters. They want to actually have real production. That's how they pay their bills, and that's how they bring money into their household.

So we won't see United adopting the rev share model? 

I think in some cases, agents are realizing they have an option. They can stay with a traditional model and have poor economics because they have to pay a large split and fees to be affiliated with a traditional brokerage. Or they can go with the rev share model. They're thinking, I'm gonna be able to create a wealth opportunity for myself, and I'm willing to pay higher splits than if I went with a 100% flat-fee model because I believe there's going to be upside.

But now we're seeing a reversal of people who went for the rev share and stock programs. They saw the math and how it could work, and then they realized, "Wait a minute, I'm putting thousands more dollars into this brokerage because of this comp plan than I otherwise would have to. And I don't see my rev share paying off, and I'm not a recruiter and I don't want to be a recruiter — I want to be a professional real estate agent."

So I think that as time has passed, people looked at returns on rev share models versus what they could have made with a model like ours, and we're seeing attrition come into our model. 

What are some of the other benefits United offers?

We have a wealth program, and it's not based on downstream or based on stock, so I think it's way more impactful. We bought 23,000 seats of Dave Ramsey's Smart Dollar for all of our agents — so it's free to them. They can get an online tool with advisory services and the entire Dave Ramsey methodology. 

We also have a fiduciary partner who is connected with TD Ameritrade and Schwab and brokers to trade, but they also look further into your financial house and everything in your will, your estate, your insurance and overall financial plan. And so our agents have access to that partner.

Plus we've partnered with Clearwater Benefits and we have United health plans. So 88% of our people are eligible for the Health Share, which saves 60% out of pocket. On top of that, we have established a 501(c) to allow dollars to be dropped in so our agents' direct descendants can apply for scholarships. 

Have you considered going public?

If there's a time in the future where it makes sense to go public, and we have an opportunity to allow all of our agents to participate and can reward production or volume with stock grants, we will look at doing that. But for right now, especially given the volatility in the market, I don't believe that's an appropriate way to induce someone to join you or to retain them.

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