Traditional, Cloud and Team Brokerages Explained

The short version

New agents often hear three words: traditional, cloud and team. They describe how a brokerage is set up, not whether it is good. The right fit depends on how you learn and what you need in year one.

We do not rank them or give an opinion. Facts come from SEC filings and TREC pages, labeled with check dates. The Bauer Group is also a brokerage, so we compete with all three models. Read with that in mind.

Education only, not legal, tax or financial advice. Confirm licensing rules with TREC.

Side by side

These are common patterns. Features vary by company, office and team.

Traditional office

Many traditional brokerages are franchises. The RE/MAX Holdings 10-K for 2025 says franchisees "fund and manage their own operations" and work with agents as independent contractors. So terms are set office by office. Two offices with the same name can differ.

See our profiles of RE/MAX, Coldwell Banker and Century 21.

Cloud

eXp World Holdings' 10-K for 2025 says it had over 83,000 agents and describes "low entry fees" and a revenue sharing plan. Fathom and Real Brokerage also describe set fees with yearly caps in their filings. Read the terms in our profiles of eXp, Fathom and Real.

In its own risk list, the eXp filing says it pays "under a multi-tiered compensation structure similar in some respects to network marketing." That is the company's wording, not ours.

Team

A team is usually a lead agent and a group who work inside a larger brokerage. The Compass 10-K for 2025 counts team leaders as principal agents. Teams can give steady business and coaching. They can also mean a share of each deal goes to the team and less room to build your own brand.

Ask these before you join a team: Who owns the listing? Who owns the client relationship? What happens to my clients if I leave? Who pays for marketing? Our guide on team or solo has more.

What every model shares

In Texas, you work under a sponsoring broker in every model. TREC says a license holder must give a written agency notice at first substantive contact about a property, using its Information About Brokerage Services form. See what a sponsoring broker does.

How to compare them for your first year

Do not compare models by name. Compare them by what you will pay and get in your first twelve months. Pick a number of deals you think is realistic, then ask each brokerage to show your total cost on one page.

Count every charge: fees per deal, yearly fees, any team share, tools you must buy, and any cost to leave. Then count what you get: training, a person to call, and any help with clients. Put both lists next to each other for every brokerage on your list.

Then ask about people. Who will answer when a contract question comes up at night? Who reviews your first deals? A model can look strong on paper and still leave you alone if no one is assigned to you. Write down a name, not a department.

• Pick a realistic deal count for year one.
• Ask for total cost on one page, in writing.
• List what you get, with a name for each kind of help.
• Ask what it costs and what happens to pending deals if you leave.
• Talk to two agents who joined in the last year.

Common mistakes when comparing models

The first mistake is to treat a label as a promise. Cloud, franchise and team are patterns, and every company varies. The second is to compare only the split. A higher share of each commission can come with fees that change the total. The third is to skip the exit terms. Read how you leave before you join, because that is when the terms matter most.

A fourth mistake is to rely on someone else's story. One agent's year tells you about one office, one market and one effort level. Use stories to find questions, then use written terms to decide.

What agents and reviewers say

Review data was limited when this page was written. We could not load a public review source that allows reading, so we are not reporting review counts, scores or quotes. We will not guess what agents think.

Ask each brokerage for two or three agents in your market who joined in the last year. Ask each what surprised them.

Questions to ask any model

These are our planning questions, not TREC rules. Get answers in writing.

• What is every fee in my first year?
• What is the commission plan and any cap?
• Who owns my clients and listings?
• What happens to my pending deals if I leave?
• How do leads reach agents, if at all?
• What is the training plan for 90 days?
• Who is my sponsoring broker?
• Who answers contract questions, and how fast?

How we wrote this

Sources: SEC filings from RE/MAX Holdings, eXp World Holdings and Compass, and the TREC brokerage notice page, checked October 14 and 15, 2026. Facts we could not read from a primary source were left out.

Experiences vary by office and team. If you see an error, write to agents@joinbauergroup.com. We apply corrections within 2 business days.

Comparing options?

Ask any brokerage the same questions. Our guides on choosing a brokerage in Texas and the six types of brokerages can help you set up your list.