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After hitting a low point in membership in the mid-1990s, the National Association of Realtors is growing by leaps and bounds.

The growth comes in the face of predictions – starting about the same time membership reached its nadir – that the Internet would reduce those numbers even further, since it was leveling the playing field by making information that was once the sole possession of real estate agents available to all.

Although there are those who expect the shakeout to occur somewhere down the road, the reason it hasn’t happened is attributable entirely to the current housing boom.

The continued strength of the real estate industry has attracted a great number of people who have lost their jobs in fields affected by the sluggish economy over the last couple of years.

There are changes afoot in the industry, and they focus not on the agents but on the brokerages with which they are associated.

A recent survey conducted by Realtors research staffers Ellen Roche and Kate Anderson and reported in a recent issue of the NAR’s Real Estate Outlook identifies current and future business models for brokerages.

The current ones are very familiar.

There is the traditional brokerage, which is a firm with one to 20 agents in a single office, where all sales associates are independent contractors. These firms provide no ancillary services such as title insurance. Access to technology has leveled the playing field and opened up opportunities for such firms – again, defying predictions that these brokerages would be swallowed up by larger creatures.

Specifically, the larger creatures are the vertically expanded brokerages, with more than 200 agents in multiple offices.

Selling real estate remains the main function of these firms, but they have expanded services to increase sources of revenue, offering ancillary services such as mortgage lending.

Roche and Anderson say that by getting involved in such endeavors, these vertical real estate firms "offer additional value to the real estate consumer."

But such diversification increases sources of revenue and leads to new opportunities for growth as well as financial stability for the firms.

These brokerages also increase their opportunities by belonging to national or international relocation or referral companies and use their Internet presence to generate new business.

Finally, there is the agent service bureau, in which agents retain 100 percent of the sales commission but pay a fee to the brokerage firm.

Besides that fee, these agents pay all other costs, including office expenses, individual property advertising, and personal promotion.

Although this kind of firm represents a higher risk to the agent, once the fee is covered, he or she gets to keep more money from every transaction.

The main goal of the manager running an agent service bureau is to recruit "productive agents who are consistently productive and thus willing and able to pay the management fee," according to Roche and Anderson.

The more agents, the more revenue the brokerage receives.

Each model has distinct advantages: Traditional brokerages have lower overhead costs; vertically expanded firms have better access to capital; and agent service bureaus have high volume.

Still, though the effects of the Internet on the real estate industry have not as yet been as earth-shattering as was predicted a decade ago, the combination of instantaneous information delivery and changes in regulatory policy are creating new business models.

One is the unbundled service provider, also known as "fee for service." In this model, consumers get to choose which services they want a real estate agent to perform in the house sale.

Customers are drawn from the for-sale-by-owner category, since a seller may choose to market and negotiate the deal but hire an agent to handle certain portions of the transaction.

Unbundling may increase the efficiency of real estate firms because they can evaluate the services providing the most consistent client satisfaction.

Another model is called the market maker, in which consumers use an auction format to determine fair market value of a property and shorten the sales cycle.

The market maker depends on sufficient buyers and enough information - including property inspection - and uses the Internet. The real estate agent provides marketing and pricing advice before the sales contract is signed and helps handle the closing.

Finally, there's the corporate model. Residential real estate firms are purchased by non-brokerages or financial-services companies with deep pockets. Once purchased, real estate may not be the primary focus of these firms but may be used instead to generate business for the corporation.

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