You have an agent who says to a brokerage: "I want all of this, but I will only pay for this." The brokerage was unable to provide the services they requested and keep costs low for agents. The agent suddenly realizes that they actually needed all the services they offered. Then teams start to form and provide the value that brokerages can no longer provide.

How can a team still make money if the brokerage cannot? The answer is that the brokerage can push expenses such as lease expense, liability insurance, and other things that are not considered by the brokerage. The brokerage takes care of those expenses, and the team gets them for free. They can then give a commission and still make money so they can add value. There's a financial thing going on with brokerages which really helped create these teams.

I believe that the creation of teams began to accelerate, especially when online buyer leads started to be a thing. Here's what stopped happening when online buyer leads became popular. Mike Ferry and Brian Bufinni coached old school lead generation and that's just old-school.

We started to notice that the grind was lessened when online lead generation became available. If you want to rely on lead generation online, you need to have the money to pay for them. Individual agents did not have the money. They saw that people were making money from online leads. They said, "I want online leads." I want online leads. Could the brokerage provide leads online? Nope. You squeezed them with your commission split. Their brokerages negotiated a good deal. Now their brokerage is unable to provide them with anything, yet they need it. They don't have enough money to pay for it.

What do they do now? They join a team within the same brokerage. Now they have a lower commission split with their team compared to what they would have received from the brokerage. What the hell is going on? What's happening? What will it look like in the future? It may continue on this path, because we now see a lot more teams.

They are now opening their own brick-and-mortar brokerages. We're beginning to see this more and more, especially as virtual franchises are on the rise. We're beginning to see that it was as if everyone went virtual. We don't have to use offices. All of a sudden, you start to see them. Now I see a virtual office that was once a company. There's a new office. What's happening?

Now it's going around again. Teams are acting almost like brokerages. But I believe that the team concept, with someone being a leader while others come in and offer service, may be here to stay. I don't think this will ever go away, but I do believe that larger teams are really brokerages. It's just no one wants to refer to themselves as a brokerage, because it sounds old-fashioned. Oh no, it's a team. It's just a bunch of nice words. It's people trying to figure out what the next iteration is and how to stay in front of the crowd.

There are many different factors at play. When you speak about agent value, there are a few things that are obvious. They are training and coaching. Let's also include accountability to some extent. If I am a solo agent, and I am not accountable to anyone, and I do not have a coach who can I trust?

Overall, it's not going to be as great. They could have some sort of training, coaching or accountability. They will have the technology, and they won't need to worry about implementing or thinking about it. They plug in, sit down and get their logins. After some training they are ready to go.

If they are not a technical person, you will have specialists who can support and provide some leverage in a variety of positions, such as an ISA team, or a very rich transaction coordination function. What are the main buckets of value that you consider when thinking about a team delivering value that a brokerage cannot afford? Are these things and more?

What do agents value most? This has been a long-standing argument between brokerages. It's almost like, "Well, what is our value?" Who cares about our value? What do agents value, and why? How can we tell? Why don't you just follow their money? What do they spend so much money on? They must value coaching because they spend so much money on it. What else? Leads are important to them, and they spend a lot of cash on it. It takes a lot of money and time to figure out the best way to hire assistants.

If we look at lead generation, coaching, and transaction management, then that's where they spend a large portion of their budget. They don't have the best or latest technology because it is expensive and takes a lot of time to learn.

It doesn't really matter which brand you choose. That's why I always say to follow their money. If they are at a traditional broker, they will have to spend the money outside of their brokerage since their brokerage does not have enough profit. This is what brings them to a team.

It really comes down to four things: leads, coaching, transaction management, and marketing. You'll find that no matter what the value proposition of a team is, they all have these four things. These four things are the core. They may add some enhancements, but they're still the same. Traditional brokerages will tell you that the four things are the same for a team. Just the brokerages need to figure out a way to make money. To be able to offer it, they need to make a profit.

What about culture and camaraderie? It's harder to measure. It's not paid for explicitly or specifically. No matter how much money you invest, it's very difficult to calculate a return on investment. Is it the same in a brokerage versus a team? This is where you may have two different management groups.

Why would a highly-experienced agent join a team at their splits, when they are doing almost everything on their own? Why would they choose a team if they could get a brokerage that offers something like an 80/20 split? Does it come down to culture, camaraderie or a sense of belonging? What is the value of culture to you? It's so, so, so worth it. The value of a culture is based on its stickiness, or as we like to call it, retention. So, the team or brokerage that can provide an excellent culture will see a higher rate of retention.

This is very profitable for everyone, whether the team leader, brokerage owner, or agent themselves. Everyone wins if we stick together for a long time and coexist. It's a great deal of value. I'm not the type to say that people gravitate towards teams or brokerages purely because of culture. The challenge is that. You won't know how important the culture is until you have already committed to the team. It's hard to recruit and communicate this accurately. We should not forget that people gravitate towards teams or brokerages who can provide these four main things.

Brokerages like to claim that their culture is what makes them special, but in reality, when someone thinks about moving to a brokerage, they are thinking, I need to earn a bit more money, and I'm hoping I'm evaluating all my options.

This leaves a huge void in the market for boutique style brokerages, which can help agents who don't want to be part of a team or build their own small team. A brokerage with all the technology. This can provide the best tech stacks, which would be prohibitively expensive for a solo agent. Coaching of the highest quality to help agents reach their peak performance. All this while allowing solo agents to brand themselves and market themselves.

MOD REALTY

Mod Realty fills the void that exists in the market. We are powered by Stack Wrap, Follow up Boss, (the best CRM in its class). leading marketing and technology company Ylopo, AI powered MaverickRE, and many other addons in the tech stack will help you to be the best and top professional Real Estate success coaching. All in all it’s cut and paste training and systems to help you reach the top level of performance.

The real estate industry is undergoing a profound transformation driven by economic pressures, technological innovations, and changing agent needs. What began as a response to shrinking brokerage commissions has evolved into a complex ecosystem of teams, virtual offices, and reimagined value propositions.

At the core of this shift are four fundamental elements that agents consistently seek: leads, coaching, transaction management, and marketing. These pillars have become the benchmark by which teams and brokerages are now evaluated. The traditional brokerage model is being challenged, with teams emerging as agile alternatives that can provide comprehensive support and resources.

While technology and practical services are critical, the intangible element of culture cannot be overlooked. The "stickiness" of an organization—its ability to create a sense of belonging and foster long-term relationships—has become increasingly valuable. However, culture alone is not enough; it must be accompanied by tangible benefits that help agents grow and succeed.

Looking forward, the real estate landscape will continue to favor those who can adapt, innovate, and provide genuine value. Whether through boutique brokerages like ours, Mod Realty or dynamic team structures, the key will be staying responsive to agents' evolving needs while leveraging cutting-edge technology and strategic support.

The future belongs to those who can balance technological sophistication, professional development, and a compelling organizational culture. As the industry continues to transform, agents, brokerages, and teams that embrace change will be best positioned to thrive.

Mark Jensen