• Even though technology has changed considerably since the end of World War II, up to the 1990s the basics of the industry remained the same so the brokerage model did not change.
  • In each of the areas where brokers were dominating, the advancement of technology has now changed the system dramatically as far as education, office space, information, branding and more.
  • Brokerages will need to work more as service providers that will supply talents and attributes to agents instead of the other way around, as it has been in the past.

In the first part of our brokerage model series, we discussed a number of the business setups we’ve seen in the past and why they have existed. But as we also saw, there are a handful of companies that are changing the status quo.

Why the role of the broker has changed so dramatically

The value of brokers was paramount for decades because they offered services that were a necessity for real estate transactions to occur. In their profession, brokers provided myriad services that actually propelled the real estate industry through the many changes from the post-World War II expansion through the end of the 20th century. Their impact was profound as millions of families purchased and sold homes.

Their services touched on a number of different aspects that were crucial to the real estate process. Their major areas of influence were the following;

  • Education
  • Office space
  • Information
  • Brand
  • Leads
  • Advertising
  • Community

For real estate agents along with buyers and sellers, what brokers provided was so important that they were in a system that worked smoothly because of their efforts. Even though technology has changed considerably since the end of World War II, up to the 1990s the basics of the industry remained the same, so the brokerage model did not change.

However, the development of the Internet and the advancement of personal computers have changed the landscape that brokers once operated. This technological change brought about new thinking on the part of real estate agents, which has already changed the dynamic of the broker-agent relationship.

Although the effect is still progressing, the tide toward these new methods has created a new system that brokers will have to adapt to — or get left behind.

How changes are progressing

In each of the areas where brokers were dominating, the advancement of technology has changed the system dramatically.


Now that most of the process is happening online, the information needed to conduct the sale can be handled with far fewer educational needs than before. This is because the information is easy to access and readily available.

Office space

Nowadays, the office space that held so many employees and offered a location for negotiations is simply not as in-demand. In fact, not only is less space needed, but that space can be rented or shared, which is far more economically efficient.


Everyone can easily share the information that is available and store it, too. With everyone equally informed, the need for the specific information from the broker is now less important. But there is still a great benefit that the broker performs by having the information at the ready.


The brand is still vital, but the emphasis of the consumer is more on the agent. Thanks to websites such as Yelp and Zillow, consumers can find important feedback and ranking information in mere seconds, which plays a powerful role in who they choose when it comes to real estate. For the broker, the brand-building efforts of the past are becoming less relevant.


Certainly one of the biggest changes is found in the collection of leads. In the past, brokers were supposed to work with agents in sharing leads, even if they were competing for the same ones.

Today, anyone can buy leads using online companies such as TigerLeads or Zillow. In this manner, they can find new clients even if they have little to no experience in gathering leads.

While the leads can be expensive and bad agents will not be able to make full use of them, the truth is that an agent no longer needs the help of the broker to find the leads that they need.


With many new tools available, agents are now able to perform incredibly well on their own. Tech companies such as Nestio, Propcy and Placester are all helping real estate agents perform a number of tasks. Nestio and Propcy, for example, assist with customer relationship management, while Placester helps real estate professionals take control of their online presence.

Interestingly enough, commissions remain roughly the same, though there are more 100 percent commission brokerage setups. However, the 50/50-split still exists in many cases with brokers keeping the money.



Who will be the WeWork of brokerages?

In the end, the traditional brokerage is going to have to adapt and change to keep up with new technology. Brokerages will need to work more as service providers that will supply talents and attributes to agents instead of the other way around as it has been in the past.

This represents a substantial change in the broker-agent relationship, but one that is needed given the changes seen today. We are have already noticed sprouts of these new kinds of brokerages when Real was launched last year.

The modern brokerage will need to become an online supermarket that will provide the following services:

  • Online education
  • Mentoring per demand
  • Office space when needed
  • Community
  • Tools
  • And more

One of the services in which brokerages will need to excel is providing the best leads and working with the community. In this capacity, the brokerage will add its services to the changing world of real estate in a positive manner, which will help secure their future.

Brokerages that continue to pursue the outdated models of the past will find themselves with shrinking demand for their services. Thus, the brokerage must adapt their services with technology and stay on top of the ever-changing needs of the real estate market.

As the times change, so too must brokerages if they want to survive in the 21st century.

Read “Wake-up call: The brokerage model is evolving.”

Omri Barzilay is the CEO at Propcy. You can follow him on his blog or Twitter.

Email Omri Barzilay.

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