Outsource Labor Cost prices for Real Estate brokerages

What does it cost to outsource accounting work for a Real Estate brokerage in 2024

Only some of the work in a Real Estate brokerage can be outsourced.  There is fundamental work that needs to be done locally and in person. But some work with sellers, buyers, and agents doesn't need to be done in person - or doesn't involve interacting directly with clients at all. Accounting is a great example of work that is ideal for outsourcing.

AccountTECH, a leading provider of enterprise-class accounting software for the Real Estate industry, conducted a price survey out Real Estate outsourced accounting service prices as of 8/31/2024. 

Before examining the cost of outsourcing accounting labor, AccountTECH’s team examined what real estate brokerages are spending on labor in 2024.  For the first six months of 2024, the average labor cost per agent in Real Estate brokerages was $461.99 per agent per month.  

This number represents the total labor cost, including all staff, managers, and executives.  Obviously, the accounting department is only a portion of the total labor cost in any brokerage. Additionally, the total labor cost per agent per month varied based on the number of offices, managers, and agents at each company.

Current Labor cost per agent per month

The numbers below show the average Total labor cost per agent per mo for the first 6 months of 2024
 

One important finding is that labor cost per agent begins decreasing as a Company gets bigger.  But that trend reverses as a Real Estate company has more than 100 agents.  For the larger brokerages, the labor cost of managers and executives increases the unit cost of labor.

Study results: Outsourced accounting labor cost averages from AccountTECH survey

AccountTECH finds that generally, when outsourced, accounting services are provided to a Real Estate brokerage, the price is based on agent count.  There is an assumption that the quantity of accounting work that needs to be performed on a monthly basis is directly related to agent count. For comprehensive outsourcing of all Real Estate brokerage accounting functions, our survey found these average prices as of 8/31/2024.
 

* for this survey we asked accounting firms to assume the company had only 2 bank accounts and 1 credit card

One of AccountTECH's divisions, BrokerOwnerBooks.com, which provides outsourced accounting services, was included in the nationwide pricing survey.

Analysis

Brokerages are struggling with EBITDA margins (or Return on Revenue margins).  One key finding of a recent AccountTECH benchmark study was that labor costs in a Real Estate brokerage tend to be relatively fixed and incapable of adjusting quickly to increases or decreases in either transactions count or agent count.

It seems clear that outsourcing some areas of a Real Estate brokerage operation could meaningfully improve profit margins.