Editor’s Note: RISMedia recently released the Top 500 firms ranked in RISMedia’s 35th Annual Power Broker Report, exclusively for RISMedia Premier Members. The Top 1,000 firms will be available this April.
Although we’re still in the first quarter of 2023, it’s already been quite a year for eXp Realty. Ousting long-standing, legacy firms to nab the No. 1 transaction ranking in RISMedia’s 2023 Power Broker Report, the firm reported more than 397,000 residential transactions in 2022 and over $159B in sales volume.
At the same time, a shadow was cast over the firm as news of an incendiary lawsuit alleging sexual assault broke in February, potentially putting into question the firm’s cornerstone of success thus far: recruiting agents.
Meanwhile, Glenn Sanford stepped back into the CEO role on January 3, ready to dig in and guide the firm to its next phase of growth amid the choppy waters of the current market and, now, the legal battle the firm must contend with. Sanford sat down with us to discuss eXp Realty’s success formula so far and how he intends to double down on growth, despite challenging circumstances, within and without.
No. 4 Sales Volume
No. 1 Transactions
What was the biggest contributor to your success in 2022?
We continue to focus on creating a very agent-centric real estate brokerage model…it’s kind of like Field of Dreams—’If you build it, they will come.’ That’s really the way we approach it every day, and now, it’s ‘how do we continue to improve it?’ We did cut some costs last year because the market was slowing down quite a bit and, outside of that, it was really around continuing to figure out what agents were looking for.
We brought on a couple of key hires last year, Shoeb Ansari, our chief information officer, and Patrick O’Neill, our chief operating officer. They are doing a great job of industrializing the organization and putting in better feedback loops to actually listen to agents for improving the brokerage. That’s been really key. Leo Pareja joined us as well (chief strategy officer), so that we continue to make sure we have new product and service offerings for agents that they can participate in if they choose to.
A big focus of ours is making sure we structure that feedback loop so that we can continue to win going forward. As companies scale, they tend to become corporate and they tend to make decisions for the company and not for the people they serve, so for us to get to 200,000 agents-plus, we have to continually break down the siloing of the organization and make it as consumer—in our case agent—centric as possible. That’s the thing we do each and every day. I’m in there as kind of a tech entrepreneur, but who’s also sold a lot of real estate, trying to make us work like a technology startup at scale—less concerned with titles and job descriptions and more about how to address the needs of the customer in real time, that again, being our agent.
What are you doing this year to sustain your success? What’s the biggest change you’re making?
The biggest change was January 3 when I came back to the CEO role at eXp Realty. When you’re in high-growth mode, especially when, in a lot of respects, we didn’t really have a lot of competitors—you could say that the legacy franchise models were competitors but we didn’t really consider them to be competitors—but when you don’t have competitors and you’re growing really fast, how do you make a meaningful difference? How do you improve? One of the benefits of a slowing housing market—and now we have competitors in the space—is that it’s fun to get back involved and continue to build on (success).
So January 3 was the big day, and for the most part, I’ve been on full blast and it’s already starting to make an impact. We’re definitely moving fast, so that’s helping maintain the momentum, and potentially increase it from a marketshare-capture perspective. We shifted the language in the company in 2022 and into 2023—we talked about it being about marketshare. We know that a lot of agents are going to leave the business, so what we can do is focus on marketshare versus agent count. When the market improves again or flattens out, I think the agent count will be the metric that most people will recognize, but right now, we’re focused on marketshare.
Speaking of agents, can you comment on the recent lawsuit allegations?
When we learned about the situation that took place in 2019, we actually released the agent that was (named in the suit). The press release that was written by the plaintiff’s counsel made it sound (like) they left on their own accord…no, we released (him). And there were allegations in the civil complaint against another agent that we had never heard before but immediately upon reading that—because we’d never been presented that information, that I’m aware of—we released that other agent pending an internal investigation. We took immediate action in both cases when we found out that there had been potential wrongdoing. In the case of the first agent, the charges were dropped. He tried to come back because the charges were dropped, but we actually refused because the information was still bad, and we didn’t feel like that made sense.
You’re No. 1 in transactions on our Power Broker Report this year. And other non-traditional models are rising in the ranks. What does the rise of tech brokerages and tech models say about the future of traditional real estate?
I play with the idea that the legacy franchise brokerages are basically dinosaurs, all teaching other dinosaurs how to be better dinosaurs.
How will you help agents grow productivity-wise?
That’s the million dollar question. One thing about productivity, it’s a self-selection, opt-in business. Productivity isn’t something that can be mandated by the brokerage. If you want to attract lots of agents, you basically treat them as adults—independent contractors with the appropriate oversight. The reality is, agents get into this business for a variety of different reasons. I believe that increasing overall agent productivity is a subtle activity, not an overt activity. When we mail Success magazine to all of our agents and provide them with content and podcasts, it’s subtly helping them become more productive, and for those that want to opt in for more specific training and coaching, we have direct coaching. We think the formula is to provide subtle approaches to agent productivity and provide more overt things they can opt into.
In 2022, we distributed through our rev share and equity program over $240 million in the form of equity for active, productive agents. Agents got that as part of their compensation. The agents are the primary beneficiaries of the company and they also own 20% – 30% of the company as the equity shareholders.
And what do you see for the remainder of 2023?
The only reason I think Q4 will be better this year than last year is because Q4 last year sucked so bad!
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