The changing tide of the housing market has pushed several companies to reevaluate their gameplans for the future. While navigating a more challenging environment may seem cumbersome to some, it also presents a vision of new possibilities to others.
That’s how Glenn Sanford, founder, chairman and CEO of eXp World Holdings, sees it as he looks ahead to what the future holds for real estate and the company he launched more than a decade ago.
As the market faces the headwinds of harsher conditions and economic uncertainty that have strained business for many in the industry, Sanford saw the perfect opportunity to return to the helm as CEO in addition to his current responsibilities.
“We are laser-focused on driving exponential growth and innovation across eXp Realty and the industry,” Sanford said in a recent statement announcing his return to the brokerage.
RISMedia spoke with Sanford about his return as CEO and how he plans to rally the troops and capitalize on the opportunities of a shifting housing market to promote growth and innovation at eXp Realty.
Jordan Grice: Let’s start with your return as CEO. What does that mean to you and eXp Realty given current market conditions?
Glenn Sanford: Jumping back into the CEO role is about getting more hands-on. With the new market and, to some extent, new competitors, it creates an opportunity to sort of jump back in and actually play a more critical role in the company. We had a unique model that had hit a tipping point of growth, so we didn’t have to do a bunch of new things to maintain our growth trajectory because the economy was so good.
For me, it’s like being a wartime president. Now we’ve got stuff to do that’s clearer about the goal posts.
JG: What challenges do you face returning as CEO at this time, and how do you plan to address those hurdles?
GS: The interesting thing is that we ran eXp for the better part of 13 years without any real competition—someone with a business model that was similar to ours. But now, there are four or five companies. We’ve got a number of companies that are sort of competing in this space of really treating the agent as a true owner partner in the brokerage. That plus the economy are two great reasons for me to be more at the helm when it comes to driving some of the changes. I think the biggest challenges are staying relevant for the next generation of agent and identifying the innovations we need to continue to iterate on to make sure we’re positioned as the best place for agents to hang their license.
JG: What can you tell us about the work Jason Gesing will be doing as Chief Industry Relations Officer for eXp World Holdings?
GS: He has already been serving on a large brokerage board for the National Association of REALTORS®. Still, there are a lot of opportunities we need to leverage to be more connected to REALTOR® associations, MLSs, regulatory bodies, lobbying bodies, etc. Jason will spend more time on those types of activities.
There are also opportunities to expose some of the other products and services that we might be doing at the eXp World Holdings level. The role gives him a lot of latitude to be involved in championing some of those other products and services out into the market in some capacity.
JG: Part of his new role will include metaverse advisory, an intriguing topic in real estate. What can you tell us about that and how eXp plans to embrace that medium further?
GS: We’ve been running our entire company since day one in a metaverse-type environment. We’ve been doing this longer than anybody else as a commercial enterprise, so we know as much or more about how to create engagement and community while driving collaboration and all the other things in a metaverse-type environment. It’s the thing that’s allowed us to continue building and scaling without having to invest in brick and mortar. It’s kind of an anchoring tool for where you are going to meet and have your serendipitous collisions with other people in the organization. For us, we typically go to our virtual world, Virbela, and we’ve invested a ton—tens of millions of dollars—in developing that technology.
Outside of maybe a couple of companies, we’ve invested more in building out metaverses for the enterprise than anybody else.
JG: Is there any interest in getting involved in the more public-facing metaverse space with buying and selling virtual real estate?
GS: No. I’ve fortunately been through this exercise a couple of times already when the earlier stages of Second Life attempted to do some stuff like this back in 2006 through 2008. The reality is that a metaverse works as a social network, first-person gaming and for a company where everyone knows that that is where you’re going to go to work. I don’t believe it works with the idea that you want to be Snoop Dogg’s neighbor.
I can tell you that when I’m not working, I’m not in the metaverse. I think that’s the challenge. People don’t use it for things other than gaming or enterprises, and there isn’t a really good in-between space for it to be used socially, and that’s the part that makes it tough to sell a property in the metaverse.
It may be different when Apple comes out with its mixed reality glasses, and perhaps there are ways to create things where you can be in two places at once, but the metaverse as a place to actually buy and sell a property I don’t think will actually get any traction for the next 10 years.
JG: Considering that the metaverse may not be the future of real estate transactions that it was rumored to be, what would you say stands to become influential for the industry?
GS: I think AI is going to play a larger role in the property selection or some general light Q&A chatbots which warm up leads and keep people engaged between showings. There are many generalized prospecting functions of real estate where I think AI is going to play a role because I know that even now, there are several apps that I use almost to the same level that I would use a coach or a trainer. I can see where technology can play the role of an inside sales agent (ISA). I don’t think it’s going to be that much more disruptive than that. Still, I think that the ISA function of AI will become a real value to both the consumer and the team and brokerage because it’s an always-on persona that you can pass the generalized questions to that will eventually be something of value in a process.
JG: What are your thoughts and expectations for the 2023 market?
GS: It’s going to be a tough market, especially the first half. I went on record last year in March or April to say that I didn’t think the housing market was going to bottom out until maybe the second quarter of 2023 before we started to see some green shoots. It might go to the end of Q3 now.
In terms of seeing year-over-year growth, obviously Q3 was a little rocky in 2022, but Q4 was really rough, and I think Q1 2023 is going to be rough, so the bottom of the market is still another couple of quarters away. That means we’re probably going to see sales off 30% to 35% in the first quarter and probably in the second as well. The third quarter will likely be fairly moderated but probably a little down. Given how brutal Q4 was for the industry last year, I think that Q4 will be our first up quarter this year.
JG: Despite the headwinds of a rebalancing market and economic uncertainty, eXp has said that it’s focused on growth. What opportunities do you see to make that happen?
GS: We know that there is going to be a lot of growth from real estate brokerages that are looking for a new home. We’ve had a lot of conversations with brokers who, quite frankly, weren’t set up to deal with a market that turned as hard as it did, so they are saying to themselves “what do we do now,” and “is eXp a better option for us?” There are a lot of broker/owners who are going to be looking for a way to transition out of their brick and mortar, and eXp is a good option for them, but I think there are a lot of agents who are going to be looking at where they can get a better overall return on their time spent in real estate. The eXp model has proven for a fairly large number of agents that the ability to co-grow the brokerage and then earn some equity in the process of being an active agent are two very strong value propositions that are allowing many of our agents to weather the storm better than those in a non-similar kind of model.
JG: What are eXp’s top priorities this year amid the current market and economic conditions?
GS: Helping agents with their production in a slower market through coaching and training is going to be a big one. We are also working on new sources of lead generation that are exclusive and give us our fair share of leads. Being as large as we are, leveraging our network to create a relatively exclusive or a high percentage of lead flow that makes it easier for the company that’s finding the leads to have one point of contact that can really push those leads to a larger ecosystem.
We’ll also be working on lead gen, and the third one, which is core, consists of growing agent count. Since I got into real estate and heard about real estate brokerage as a service, it has been all about recruiting and retention.
We’re still going to be working heavily on attracting agents and retaining them while creating raving fans by continuing to iterate around the agent value prop.
JG: With some forecasters expecting agent attrition amid the challenging market conditions, how are you and your team planning to rally the troops and help agents and eXp thrive in the 2023 market and beyond?
GS: One of them, for me, is being more visible as both the founder and spokesperson for the company. In the last 30 days, I’ve been on four different events that have been shared out and live streamed. I aim to make eXp more visible so that they understand our mission, visions and values of the company.
For us, that is a big thing, to make sure agents who are looking can find us because agents are always looking. We want to make sure that when they’re looking, they’re actually thinking about eXp Realty.