Tabrizi: The M&A wave proves agents still run this business

The views expressed in this column are solely those of the author.

Three of the largest brokerage transactions in the history of North American real estate happened in the last four months.

Compass acquired Anywhere in January. Real Brokerage announced its merger with Remax Holdings at the end of April. Last week, eXp World Holdings announced it had acquired NextHome, picked up 500-plus franchisees, and changed its Nasdaq ticker from EXPI to AGNT, literally renaming itself after the one thing the cloud-based model spent a decade insisting was optional.

Headlines will treat each of these as standalone deals. They’re not. They’re the same story told three different ways — a decade of confident narratives finally meeting operational reality.

For 10 years, our industry argued across the same table. Cloud-based brokerages told us offices were obsolete, franchises were dead and leadership was a cost centre. Dashboards, AI and revenue share would handle the rest. Traditional firms dug in on the other side and dismissed the whole movement, insisting nothing built online could replace relationships built in person.

Both sides were too certain. Technology didn’t eliminate the human side of the business. And legacy brokerages didn’t exactly race toward innovation either. The truth landed in the middle, where it usually does, and the companies that recognized it early are the ones now writing the cheques.

The boom hid everything

From 2020 through 2023, the market made almost everyone look like a genius. Transactions surged, agents were closing eight, 10, 12 deals a year, and even fragile business models looked unstoppable. When volume is exploding, nobody asks hard questions. Recruiting feels effortless. Revenue rises on its own. Every model gets labelled scalable and disruptive.

Markets have a way of restoring clarity. When conditions normalized in 2024, the music slowed — and that’s when people started noticing who was actually dancing and who was just leaning on the speaker.

Today, the average producing agent in many club-style models is closing somewhere between three and five transactions a year. Drop overall market volume another 30 per cent on top of that, and the math falls apart quickly. Agent count loses its shine. Headline growth stops paying the bills. Recruiting cannot rescue a model when productivity per agent is declining underneath it.

Technology is table stakes now

The biggest misconception of the last decade was confusing technology with the actual engine of the business. Technology improves efficiency. It scales operations. It cleans up workflows. But technology does not go on listing appointments. It does not negotiate at the kitchen table. It does not earn the call back from the seller who has three other agents pitching them. Agents do that.

And here’s the part nobody likes to say out loud: technology is now commoditized. Every brokerage in this country has a CRM, an AI assistant, a transaction platform, automation, analytics and digital marketing. None of it is a differentiator anymore. It’s table stakes. The differentiator is what it has always been — visionary leadership, culture, productivity, accountability, mentorship and human connection. The things that don’t show up in a pitch deck.

Apples, oranges and the franchise discount

Cloud-based models were rewarded for being labelled “technology platforms,” a phrase that quietly expands valuation multiples almost by default. Investors saw centralized revenue, fast top-line growth and one consolidated balance sheet, and they paid a premium for it.

Franchise models were judged through a completely different lens. A significant portion of their economic value sits at the franchisee level, with local operators absorbing costs, building teams, running offices and generating profitability. Most of that EBITDA never flows into the parent company’s public reporting. So for years the industry compared apples to oranges and occasionally declared the orange a worse apple. It wasn’t a worse apple. It was a different fruit, and a more durable one.

The rev-share reality check

Rev-share may have been the most effective recruiting narrative our industry has ever produced. Passive income. Financial freedom. Recruit your way to retirement. It is a beautiful pitch and some people do receive a cheque. That part is real. But was it meaningful, consistent, life-changing income? That sits with a very small fraction of participants, likely under one per cent. For everyone else, once you account for the time spent recruiting, mentoring, onboarding and supporting downline agents, it stops looking like passive income and starts looking like an unpaid second job. In a strong market, the gap between perception and reality is easy to ignore. In a slower market, when transactions drop but obligations don’t, that gap becomes impossible to hide.

The question every business model and every investor eventually has to answer is the same one: what does this look like when things stop going up?

The deals say it all

Which brings us back to the transactions. Companies that spent a decade telling the industry there was no need for offices, no need for franchises and no need for traditional leadership are now buying offices, franchises and traditional leadership. eXp’s own framing tells you everything: “multi-model platform,” “maximum optionality for agents and franchise owners,” a new ticker called AGNT. After 10 years of disruption talk, the messaging has quietly returned to the obvious — agents matter, and so does the local leadership standing behind them.

This isn’t a reversal. It’s a recalibration. The industry is admitting, transaction by transaction, that it needs both sides of the equation. Technology and people. Systems and leadership. Scale and substance.

Every brokerage model — cloud, franchise, hybrid, boutique — eventually faces the same test. Not how it performs when transactions are easy and stock prices are rising. How it performs when volume drops, margins tighten and the only thing holding the business together is operational discipline and productive agents.

“The future of this business is not traditional versus cloud. It is not old versus new. It is not office versus no office. It is integration — companies that combine high-tech and high-touch with discipline, and run both sides well.”

That is where the answer becomes obvious. Real estate is a people business supported by technology. It is not a technology business that happens to involve people. Listings come from agents. Transactions come from agents. The data everyone wants to monetize comes from agents. A brokerage, a brand or a portal without productive agents is empty infrastructure. Trust, reputation, negotiation, local expertise, coaching, leadership — those are the assets. Software amplifies them. It does not replace them.

The future of this business is not traditional versus cloud. It is not old versus new. It is not office versus no office. It is integration — companies that combine high-tech and high-touch with discipline, and run both sides well.

Maybe the biggest takeaway from this cycle is that the industry didn’t discover a new answer. It just spent 10 years and a lot of capital circling back to the one it already had, with better technology wrapped around it.

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