MAIN IMAGE: Samuel Seeff, Chairman of the Seeff Property Group; Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa
The working world has seen significant changes in the wake of the Covid-19 pandemic, with ways of working being revised to hybrid models offering better office/home flexibility. Many previously permanent employees have also decided to make the move to working for themselves. The real estate industry is no different, with eXp South Africa, now in its second year, claiming to have grown to 600 agents since 2020.
eXp, a cloud-based real estate agency, offers an agent-centric approach which allows for independent, non-franchised, flexible working conditions, with education and technology resources being provided for a monthly fee. Agents are also incentivised to bring new property practitioners on board.
“A few years ago, the media wrote about Keller Williams being the fastest growing company in SA. Then there were claims about the growth of Leadhome. Now it’s eXp. Each of these companies grew, off a zero base and I think they have done very well to get to where they are with their respective value proposition offerings,” says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, “That being said, it doesn’t matter how many agents you have. It only matters how many productive agents you have. How many people do you have that are good at what they do, can be trusted with their clients’ most important investment and how many of them truly care about the client and put their needs above their own?” asks Goslett.
“In the case of eXp, they’ve certainly grown quickly and to that extent the business model of incentives for bringing more agents on board works. However, one has to ask whether such rapid, incentivised growth doesn’t run the risk of becoming a quantity over quality situation,” shares Samuel Seeff, chairman of the Seeff Property Group.
“RE/MAX focuses on both quantity and quality. At RE/MAX we don’t focus purely on how many agents we have or how many we can add. Our focus is on helping our agent base grow their business, helping them to increase their productivity and provide a better life for their family by delivering quality service to more clients. That said, we do have over 3,000 agents in South Africa and are the largest company by some margin. But, when an agent sits in front of a client, the client wants to know what that specific agent brings to the table, not the other 2,999,” Goslett remarks.
If it’s not about growth, what about commission?
Andrew Thompson, Principal eXp South Africa, shares that “We are big on reward and retention, our company compensates property practitioners through an attractive 75% to 25% commission split and revenue share. We are a debt-free, cash-flow positive, profitable business”.
“The question is less about what the split is and more about what the agent gets for that split. It’s a balance of price vs value. Whether you’re on a 50%, 70% or 90% split, the question you should ask as an agent is ‘What do I get from my principal for the amount I pay them?’. Regardless of whether that’s a percentage, a fixed fee or a combination of the two, can the company you’re with help you to do more sales? 75% of zero is still zero,” says Goslett.
“The questions about agents’ commission split really boils down to what the agent needs. Some prefer a higher commission split, but then make do without the added benefits and services that an agency with a lower split, offers such as access to other agents, infrastructure, marketing services and experienced advisors – all of which generally offsets the lower commission split. It is up to the individual agent to decide what their needs are. My advice would be for agents to determine their needs and to make sure they know what they’re getting, and what not,” explains Seeff.
Let’s look at on-boarding and education
Thompson shares that at eXp “there is already a huge learning initiative under way with new agents inducted via 30/60/90-day training – arguably ground-breaking for a highly-competitive industry known for leaving new agents feeling isolated”.
Seeff has a different approach, “Any company claiming to on-board property practitioners within thirty days to three months can only possibly provide a topline introduction. The PPRA mandates the completion of the PDE exam which in itself takes longer. That also doesn’t account for practical training and experience. We believe it takes at least six to twelve months to gain the necessary experience, and even then, provide continued guidance to our new agents, explains Seeff, “A good salesperson can definitely sell within a shorter period of time, but are they knowledgeable about all of the legalities? How many of those sales will fall through due to lack of experience with the process?”.
Added benefits
According to Thompson, eXp’s generous commission structures, wealth creation incentives and revenue share with shares on the US stock exchange (Nasdaq: EXPi) make it extremely attractive to property practitioners, and the company has made substantial inroads into key metros, including Cape Town, Johannesburg and Durban.
What about brand recognition?
Seeff shares that one of the biggest advantages to working with an established estate agency is brand recognition – sellers and buyers know and trust the brand. Agencies such as Seeff and RE/MAX have invested decades into building their brand equity, and their agency model delivers results for clients.
Many ways of working
Finally, Seeff believes that “A variety of methods of operation is taking root within the industry and I believe that going forward we’re going to see many different “shades of grey” as agents and agencies find their comfort zones. There is an increasing range of options, and it will be up to agents to decide what works for them”.
Ultimately, great businesses are built by focusing on the consumer. It is unclear how the eXp model benefits the consumer?
