Real estate brokerages are experiencing enormous pressure on their already razor-thin profit lines as they face declining sales volume, mortgage rate uncertainty, stagnant inventory, recruiting and retention contraction, commission compression, agent productivity reduction, the impact of team growth and threats of new lawsuits.
RTC Consulting reports that real estate brokerages average gross margins of less than 14% and net margins of less than 4%. Industry research found that between 2012 and 2021, the average brokerage gross margin decreased by 50.8%. Firms had to reduce operating expenses by 7% to stay profitable!
Cutting the fat, not the bone
The demand to cut costs is forcing brokerages to yield machetes when they should be using paring knives. Too many times, brokerages attempt to cut costs and unknowingly cut into the bone while slicing away the fat.
One concerning cut involves the number of brokerages eliminating their investment in search engine optimization (SEO). Unfortunately, eliminating your SEO is akin to sawing off the branch you’re sitting on.
Take the case of a large independent brokerage client looking for the greener grass offer of a free website. They abruptly switched to the new vendor, and the impact was immediate—and devastating.
Organic search accounted for nearly 50% of their traffic in 2024. Before they jumped ship, we helped them grow their organic search by 16% year-over-year. Leads from organic search were up nearly 100%. SEO accounted for 63% of their leads.
These organic SEO leads were the most valuable to their 300-plus agents because they’re most likely to transact leads.
In 30 days since the brokerage abandoned its SEO, visibility plummeted by more than 66%.
SEO: Only missed when it’s gone
When a brokerage stops investing in SEO, the impact isn’t always immediate—but over time, it becomes unmistakable. SEO works in the background, constantly optimizing, and when you stop or don’t take it into account when moving to a new provider, rankings drop, traffic decreases and the once-steady flow of organic leads dries up.
Brokers often only realize just how crucial SEO is once it’s gone. It’s the invisible force driving traffic, leads and revenue from the place that, according to the National Association of REALTORS®, over 97% of homebuyers begin online. It’s also the place that most buyers cite as where they find their home—through online searches.
That’s why losing organic search visibility can instantly weaken your brokerage’s lead funnel, putting your agents at a competitive disadvantage.
You can’t cut SEO and grow
Maintaining your SEO investment remains one of the best strategies for brokers who want to continue to grow. Eliminating SEO is risky and could drastically impact your brokerage’s visibility, lead flow and, ultimately, profitability. In any market, but especially a chaotic one, understanding the value of SEO is crucial for any brokerage that wants to grow.
For more information, visit https://www.deltamediagroup.com/.
Michael Minard is CEO and owner of Delta Media Group, a leading and trusted technology partner for many of real estate’s top brands, and 100% family-owned and operated.
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