Editor’s Note: RISMedia recently released its 2023 Top 1,000 Power Brokers, exclusively for RISMedia Premier Members. In this special interview series, we talk to some of our top-ranking brokers to garner their insights and strategies for sustaining their firms’ success. For more information, click here.
Josh Harley, the CEO of Fathom Realty, says agents at his firm are poised for success no matter the market because of the company’s low-fee/high-commission-split model. That’s been one of the drivers of agent growth, which has in turn kept the company successful through the ups and downs of last year’s residential real estate markets, he says. “We will continue to grow by attracting more agents who are looking for ways to invest more into their business and take advantage of this market, “ Harley says.
Here, Harley shares some candid insights into the challenging year that was 2022, how they forged ahead against challenges from rising interest rates, the Fed, mortgage rates and more. But, he adds, “we are already seeing improvements in our business,” encouraging his agents to understand how in this down market there are incredible opportunities for them to gain greater market share. He shares some of those in this exclusive interview with RISMedia for this year’s Power Broker Report.
No. 12 Sales Volume
No. 9 Transactions
Chief Executive Officer
Was your company’s performance in residential sales volume and transactions for 2022 in line with your expectations for the year? Why or why not?
Nobody—who is being honest—can tell you that their transactions for 2022 were in line with expectations as they moved into the year. Even the analysts were dumbfounded. We all saw disaster looming, but nobody anticipated the Fed taking too long to react and then overcompensating when they finally did. Then again, that is par for the course when it comes to the government and related parties.
What was the biggest contributor—positive and/or negative—to your results in 2022?
The breakneck speed at which the 10-year and subsequently mortgage rates increased was the greatest negative contributor to the reduction in closed transactions that we all experienced. At the same time, we were one of the least negatively impacted brokerages overall simply because the reduction of closed transactions and income for agents drew more agents to join our ultra-low fee model. Agents ended up earning more commission with us compared to their previous brokerage even though they closed fewer sales.
How are you keeping agents motivated and productive in the shifting market?
We are helping our agents understand that this down market is an incredible opportunity for them to gain greater market share as other agents drop out of the market. As they net more commission with Fathom, we encourage them to invest those savings into their marketing and business growth.
What’s the biggest threat to business in the coming months?
The greatest threat to the real estate industry is the government continuing its carefree spending and the Fed having to battle that by continuing to raise interest rates.
How do you anticipate 2023 ending up? Are you seeing signs in your market(s) that things are turning around?
While transactions are down across the country, people still have to move. Even during the last housing recession, we were only down around 15% in sales. I believe we will ultimately see something similar as people continue to be promoted, get relocated, get married, or divorced, etc. We are already seeing improvements in our business as buyers and sellers are coming to the realization that low rates are not likely to return anytime soon, if at all.
What are the biggest opportunities for growth ahead?
For individual agents, the biggest opportunity is simply doubling down on their marketing efforts and solidifying their relationships. As more agents exit the industry, it is important for agents to be in the right place at the right time. For Fathom, by offering agents the ability to enjoy some of the highest commission splits available, we will continue to grow by attracting more agents who are looking for ways to invest more into their business and take advantage of this market.