How off-market deals and investor demand are reshaping residential real estate
The combined forces are reshaping the industry
The real estate market is experiencing a once-in-a-generation disruption, driven by forces that are reshaping the role of agents and brokers. Private deal networks, a growing class of small investors, legislative and regulatory shifts, and intensifying competition between online portals are creating an unusual environment.
High mortgage rates and limited property have pushed existing home sales to a 30-year low, forcing agents to rethink traditional strategies. New home listings in the US fell 1.7% year over year during the four weeks ending December 7, 2025, the biggest decline in more than two years. Success now depends on navigating the operations of the multiple listing service (MLS), working with investors, understanding changing regulations, and adapting to the portal wars that are redefining how buyers find homes. Alternative models of home ownership (renting to owner, shared ownership), non-bank financing sources, and the growing amount of capital to renovate existing homes in the rental market) continue to expand the touch points for buyers and investors in the housing market.
Off-market ecosystems are changing the playing field
An increasing share of homes are sold outside the MLS in private networks and niche markets. Fix-and-flip operators, wholesalers, small investors, and specialized forums are increasingly buying and selling homes through traditional channels, especially in the $100,000 to $300,000 range. This has intensified competition where first-time buyers have historically played, especially in the last two years after decades of ultra-low interest rates and loose credit conditions.
We are now realizing that buyers are no longer just homeowners. Fix-and-flip operators and institutional investors are increasingly competing for homes to rent. While this helps address the housing shortage, it also makes it difficult for first-time buyers to compete. These off-market ecosystems are not a reaction to market cycles, interest rates, or regulatory upheavals, but are now a permanent part of the landscape because investors of all sizes have given their existence a big boost.
Small investors are reshaping ownership
Along with off-market activity, a growing number of small investors are changing where money comes from and how inventory flows. Realtor.com’s mid-year review found that 10.8% of homes sold in Q2 were purchased by investors, with small investors accounting for more than 62.5% of those purchases. Many of these buyers include rental portfolios of 10, 20, or 100 homes, meeting the growing rental demand driven by high construction costs and limited rental availability.
Interest rates have had more of an impact on existing home sales than any other factor, but competition at the low end of the market remains fierce. For agents and brokerages associated with fix-and-flip or investor groups, this creates a new source of transaction volume. Although the transaction conditions are the same, the thinking is different: instead of helping someone buy a home, agents help investors create a strategy. This represents a different channel, not a diversion of business from traditional consumers.
Non-institutional investors (“retailers”) have many different sources for finding distressed and/or off-market deals such as BiggerPockets, HomeVestors, New Western, Roofstock and their personal networks, which often include experienced “regular” agents and deep coverage of local markets. Access to all of these sources is increasingly becoming the basis for making the deal necessary to build and maintain a portfolio of rental properties.
In recent weeks, President Trump’s administration has floated the idea of limiting institutional purchases and single-family home ownership as a way to address affordability issues. In a nutshell, the prospect has industry participants on edge in part because of the amount of investment capital and human infrastructure planned for the single-family rental market. There is a lot of speculation about how this can be done or how it will be implemented (unfavorable financial treatment, volume limits, allowing individuals to have the right of first offer, etc.) but this may remain a hotly debated topic until 2026.
Regulatory and legal uncertainty
Regulatory and legislative changes have introduced another layer of complexity. DOJ inspections, the changing role of the National Association of Realtors’ (NAR), and changing commission rules have affected the workflow of agents. Although it was expected that the commission’s changes would significantly change the results, the impact was more modest. Transaction dollars move more than they disappear, and interest rates remain the main driver of activity.
Early uncertainty in 2025 has paved the way for more clarity, and once the rules are understood, market activity tends to follow predictable patterns. Looking ahead, the housing market’s biggest challenges are affordability and availability rather than consumer satisfaction. Zoning restrictions, multifamily restrictions, and vacant properties have a more significant impact on supply than changes in commissions.
After the industry’s settlement with the DOJ, consumer commission negotiations and disclosures created significant but short-lived turmoil for agents and consumers. As the industry navigated that both conversations and processes needed to change, clarity emerged, and both buyers and sellers adapted; buying a home is still an important, stressful process, and transparency has benefited the market in many ways.
Portal competition is fierce
Competition between Zillow, Realtor.com, and Homes.com is intensifying as each platform vie for market share through marketing, agent strategies and technology, all of which have created a “site war” for buyer attention and listing data. Homes.com, backed by CoStar, is positioning itself as the most transparent and affordable way for agents, challenging Zillow’s long-standing dominance. Although multiple portals can theoretically increase spending and transparency, measuring their impact is difficult when transaction volumes drop by 20–30 percent.
Overall, it remains a challenge to distinguish what really benefits agents or buyers when activity is slow.
Compass’ purchase of Anywhere Real Estate for approximately $1.6 billion, which was completed in early January, is an example of strategic M&A in the residential business as firms combine to protect market share amid weak sales, regulatory uncertainty, and competitive pressure from portals and technology-enabled models. In March, mortgage company Rocket Cos. agreed to buy brokerage Redfin Corp. an initiative that aims to reshape the way Americans buy, sell and refinance their homes. That same month, Keller Williams raised money from Stone Point Capital to equip it for expansion.
Effects on agents and consumers
The industry is starting to split in two. Agents may be outclassed in sales or investor-driven operations, but they remain important in complex, consultative deals. Diversified buyers to markets outside of the MLS, partnering with investment groups, or providing services such as concierge repair programs or property management can remain central as these ecosystems grow. Investor-driven activity also affects affordability and property. As repair and maintenance activities increase, older houses may move quickly, requiring agents to advocate for policies that maintain access and promote supply.
The concentration of market share among a small number of umbrellas such as Compass, ReMax, Berkshire Home Services and Keller Williams is, in some ways, a response to the real estate data empire, increasing consumer demands for low-friction access to assets, and the slow but inexorable impact of technology and AI on the way consumers interact with knowledgeable agents and brokerages.
In discussions with PE and strategic investors, we have seen an increasing number of brokerages and groups/agents developing specific, targeted strategies to identify and work with investors to acquire or dispose of single-family homes (either for fix-to-flip or rental purposes); the same techniques are used to work with new construction developers, regardless of the goal of the final buyer (ownership or rental unit). Agents and brokerages with local market knowledge can benefit from these multiple channels, as long as they recognize that their approach to each of these markets may require different marketing, process expertise, and customer relations.
Looking ahead
The real estate landscape is evolving rapidly. Off-market ecosystems, new categories of investors, regulatory shifts, portal wars, and agents’ bifurcating roles create both challenges and opportunities. Human skills remain important, as most buyers continue to rely on agents or brokers. Success will belong to those who embrace change, foster relationships, and continually refine their value proposition. We believe that experienced, tech-savvy brokerages and agents will increase market share from those unable or unwilling to adapt. In addition, using data to find opportunities for buyers, prices and market homes more accurately for sellers, and reducing the administrative burden common to many operations will be the key to buyer satisfaction and sustainable income for agents.
Brandon Dobell and Seth Rosenfield are Managing Directors at Brown Gibbons Lang & Company (BGL), where they lead the firm’s Real Estate Services and Technology banking team.
This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners. To contact the editor responsible for this piece: [email protected].
