Leading the charge in the property industry

September 21, 2016

Adrian Goslett doesn’t chase media coverage. The fact that collectively his businesses fetched R23bn in sales in 2015 means he doesn’t need to

Earlier this year I attended a RE/MAX awards event where the broker/owner of RE/MAX Independent Properties in Nelson Mandela Bay, Kobie Potgieter, distinguished herself as the recipient of the Circle of Legends award. Her total commission earned was in excess of $10m.

I’m not sure why this resonated so loudly – I’ve met other agents and brokers who have earned millions. Maybe it was because she was a mother of two, like me … Maybe it was because she was selling in Port Elizabeth, not Camps Bay and Clifton … Whatever it was, the fact that she had earned more than $10m in total commission stuck with me.

So when it came to interviewing Adrian Goslett, regional director and CEO of RE/MAX of Southern Africa, I asked him about Potgieter: what did he think she was doing so right? And did he wish all his agents were similar to her?

PICTURE OF A TOP PRODUCER

“There are a few agents like Kobie. Wherever you go, with whichever brand, you’re always going to have Pareto’s 80/20 Principle: 20% of agents are responsible for 80% of the revenue. And you try and increase the 20% and educate the remaining 80% through training and support to increase their productivity.

“What Kobie and agents like her have is a vision and a bigger picture. It’s not just about the money, because if it was, everyone would be successful. But there’s another emotional driver – for her, maybe it’s to send her kids to a great university. It starts with a larger dream than merely selling houses.

“These brokers work out the cost of their dream and devise a business plan and strategy to achieve exactly that. They know exactly how many appointments a day they need to make in order to sell the required number of houses to earn the commission.”

Goslett describes that type of agent as specific, entrepreneurial and business-driven. “When you ask someone like that how business is going, they don’t say I’ve had a good month or I’ve had a bad month. They don’t think month to month,” he says. “They take a long-term view.”

THE 100% COMMISSION MODEL

Goslett believes the RE/MAX model attracts the Kobie Potgieters of the industry and it has done so from day one when RE/MAX of Southern Africa was founded in 1994. The 100% commission model didn’t exist at the time in South Africa. But it made perfect sense to entrepreneurial brokers who realised their fixed costs were capped, so they were only too happy to take 100% commission and pay a service fee back to the owner.

If the RE/MAX model was the original attraction for brokers and agents, the support in terms of training and technology are now equally appealing drawcards.

Says Goslett: “The majority of our money as a business is spent on our people – training, services, technology … About 70%-75% of RE/MAX transactions are repeat or referred business and we don’t take that for granted. We work that specifically. It sounds easy to do – just get your clients to tell people about you – but agents don’t know where to start. So we have programmes on how to contact people, what to say and how to say it.”

CHANGING LIVES

Goslett recognises the Pareto Principle and the fact that there can only be so many top producers. But where he really finds inspiration is in the kind of stories where the property business completely changes lives.

He tells this story: “An ADT security guard, Clifford Nxasana, used to service the RE/MAX office in Pinetown, Durban. He was struggling to make ends meet. His kids weren’t going to a good school; his family lived in a shack. He often helped to open and close the Pinetown office, and started asking the franchisee about RE/MAX and the industry. Over time, she gave him a lot of information and he was keen on getting involved. He put what little he had aside to get into the business.

“The upshot is that because of his entrepreneurial spirit, Nxasana joined that office as a rookie agent. After two years he received the Platinum Club award, which means he earned more than R600,000 in commission. He bought his own car, his kids are going to a good school and he has built his own house.”

LEADERS IN TRANSFORMATION

From changing lives to changing the face of the industry – or at least starting to – it’s fair to say that RE/MAX took the lead on the industry transformation road. In January 2015, it became the first company to conclude an empowerment deal with Z Capital Properties.

Says Goslett: “We had willingness to take the first step. RE/MAX was born out of the post-apartheid era – we weren’t allowed to bring RE/MAX to South Africa until the 1994 elections. Peter and Val Gilmour’s vision was to start a company that serviced all markets, from R3,000 to R30m. That was the big picture, along with equality across the board at a national level. Hence Amanda Cuba came in with Z Capital Properties with a 45% ownership interest.”

It doesn’t appear to be a box-ticking, quota-filling move – that Cuba is now the chief operating officer speaks volumes. “I was looking for someone who would be more than just an investor; I was looking for someone who was going to help to grow the business.”

THE PROPERTY MARKET

“While we foresee 2016 to be a challenging year within the real estate sector, with the interest rate hikes and a declining economy, opportunities will open up. It is not a good market or a bad market – it is merely the market and business as usual.”

“It’s been a seller’s market but it’s moving to a buyer’s market. But it’s unlikely that it will become a distressed property market.”

“Markets work in cycles and through the economic ups and downs in the property industry over the past few years, the people in the RE/MAX network have been able to perform above industry norms because of the extensive resources and training available to them.”