Editor's Note: T3 Sixty's research and publications division, a unit editorially independent of its consulting division, conducted a case study on the Jason Mitchell Group, which included an in-depth business model review and a profile of the experiences of several key partners and agents. Below is a digest of that research and analysis; a full version can be downloaded here.

With shrinking profits and ongoing challenges in demonstrating value to agents, brokerages are finding business generation an increasingly valuable strategy to deploy.

Brokerages can leverage a variety of ways to generate business for themselves and their agents, including purchasing leads, leveraging ad-based lead generation systems and using demand generation strategies. In the last two decades, firms have increasingly used these tactics, but customer acquisition costs continue to rise.

Jason Mitchell Group, which transformed from a team into a brokerage in 2019 and is led by Founder and President Jason Mitchell, has developed an innovative business generation model that has fueled spectacular growth. The Scottsdale, Arizona-based firm has grown into the U.S.'s 38^th largest brokerage by 2024 sales volume with operations in 42 states and over 140 metro areas.

Inside the JMG business model  

JMG generates approximately 80% of the business its approximately 900 agents do from institutional partners, predominantly mortgage firms, who pre-qualify or pre-approve a buyer and refer them to JMG to help find them a home. 

The firm pairs technology with a rigorous follow-up system to achieve an average conversion rate of approximately 22% (according to JMG) of the hundreds of referrals it receives from its partners each month. 

JMG's systems and agents keep partners informed about the status of referrals, which keeps partners in the loop and feeling connected.

To encourage homebuyers to use the referring partner's services, JMG offers incentives such as 1% of the purchase price as cash at close when buyers transact with JMG and use of the referral partner's mortgage services.

When JMG closes a transaction, it pays 35% of the brokerage fee it collects to the referral partner. JMG then splits the remaining transaction amount 50-50 with the agent.

The company reported a net profit of approximately $20 million in 2023.

How it works

Approximately half of the institutional partner leads JMG receives each year come from lenders such as Rocket Mortgage, Veterans United and AmeriSave. The firm also partners with credit unions and search portals. In the first 10 months of 2024, JMG received over 43,000 referrals from 68 different referral partners. The company aims to provide its agents, who are all independent contractors, with eight referrals each month. 

On deals agents generate themselves, they receive an 80-20 commission split. When agents reach $20 million in sales volume or 50 transactions at JMG, they move to an 85-15 split on deals they generate and an annual $24,000 cap.

JMG also charges agents fees:

• $350 per transaction

• $124 per month platform fee

• $100 per quarter for errors and omissions insurance

JMG, which hires new agents based on referral flow, leverages a revenue-sharing model to facilitate organic growth as well. Recruiting agents earn 5% of the commissions that their recruits close for as long as they are with the company. 

Partner and agent value

JMG's high level of communication and relatively high conversion rates appeal to its partners.  

NAF Homes, a national mortgage company's brokerage wing, sends the majority of its approximately 300 monthly referrals to JMG. Most are first-time homebuyers pre-approved for a loan, with JMG converting them into brokerage clients at a rate of approximately 40%, according to Susie Wright, senior vice president of business operations at NAF Homes.

For NAF Homes, JMG checks in with the officer within 24 hours of receiving a lead, and the agent provides detailed notes on their follow-up. Loan officers then receive updates every 14 days.

JMG agents appreciate the steady lead flow they receive from the company, which helps them maintain a steady business. They also appreciate the opportunity to grow those customers into repeat and referral business, which have better economics for them than the referrals. 
JMG ranks agents by performance, which includes responsiveness, conversion rates and how close they follow the referral guidelines for partners. This helps the company ensure agents apply the practices that the company knows lead to higher conversion rates. 

What's next for JMG

The firm appears poised for further growth, with a revamped tech platform in the works. Some of the pains uncovered in this case study exemplify the unavoidable challenges that come with rapid, foundational growth, as JMG has experienced in recent years.

JMG has achieved remarkable success in its short life as a brokerage. As it grows, however, it will need to balance an increased volume of leads with maintaining a quality of lead that keeps conversion rates high, a key factor for both its partners, and its agents, who need high-quality leads to maintain the volume required to thrive.

The brokerage's achievement reveals the potential innovative models its leaders can realize in the industry.

Read the full case study here.