RE/MAX has been around for almost half a century, and the company with the red balloons spent their annual convention, held this week in Orlando and virtually, making the case for their continued relevancy.
Nick Bailey, RE/MAX Chief Customer Officer, paced back and forth on a convention hall stage Thursday, warning of a “bogeyman,” be it Zillow or some other existential threat, that always seems to threaten the home broker.
But Bailey assured the assembled crowd of agents huddled around circular tables that RE/MAX always innovates enough to persevere. The latest change? Health care for all its U.S. real estate agents, who are independent contractors.
“It’s through Aetna, one of the big companies,” Bailey said.
Benefits are available for all RE/MAX agents starting April 1, a company spokesperson confirmed, except those in Hawaii, where “coverage is forthcoming.”
Technology has given consumers the power of choice and expedited the entire real estate purchasing process. Successful agents, brokerages and loan officers of the future are going to rely significantly on technology to find, nurture and engage with buyers and sellers while also playing an expanding role as personal advisors.
Presented by: Propertybase
Time will tell how many of RE/MAX’s 62,303 U.S. agents (a figure taken from the company’s annual report – RE/MAX reported 138,000 agents total) avail themselves of the program, and how expensive it will get for the profitable but lean brokerage.
RE/MAX billed health care coverage as a way to recruit and retain agents. Just 2 % of National Association of Realtor members obtain health care through their brokerage, according to a 2020 NAR Report.
The news punctuated a convention that highlighted RE/MAX’s identity as a middle-class brand. During Bailey’s presentation, agents were invited on stage for a real estate “price is right” in which they guessed how much Manhattan studio apartments, and Los Angeles single-family homes sell for.
A 48-year-old, Denver-based outfit, RE/MAX makes money from franchising out its name, marketing, and tech resources. It has a market cap of $1.16 billion as of March 23, a fraction of publicly traded competitors Realogy, eXp, and, perhaps soon, Compass.
But the company is neck-and-neck with Keller Williams and Berkshire Hathaway HomeServices for the most transaction sides in the U.S. and Canada. And RE/MAX turned an $11 million profit in 2020, generating $290 million in revenue, largely from franchising and broker fees.
Low inventory, high trash-talking at RE/MAX
The convention featured a potpourri of breakout sessions, including two separate panels on “how to create inventory in a low inventory market.”
“Emotions run high, when inventory runs low,” lamented Cleve Gaddis, a RE/MAX Agent for the Atlanta.
Gaddis recommended a series of measures. These include showing homes outside a buyer’s desired geographic area, searching for “sale by owner” on Zillow and other websites, and “knowing every single home builder in the area” so an agent can snag a listing “three to six months out.”
Both Gaddis and Jared James – “A national speaker and trainer in the real estate industry” – tried to tactfully advise agents to find homes off the beaten Multiple Listings Service path. Per National Association of Realtors guidelines released last year, members agents cannot shop homes unless they are listed on the local MLS.
Other sessions explained to RE/MAX agents the brokerage’s technology including the booj platform, which alerts agents’ smart phones about a client lead or relevant available home.
Kevin Doll, executive director of industry analysis at RE/MAX, hosted one of the more entertaining sessions. It highlighted “competitors’ glaring weaknesses” – vulnerabilities RE/MAX could exploit to lure rival brokerages’ agents.
Zillow “chickened out” by pausing iBuying at the pandemic’s start, Doll said, and Redfin is aggressively recruiting RE/MAX agents of late with emails touting that company’s salary and benefits – including health care – for agents.
But eXp, the Bellingham, Washington-based virtual brokerage, came under the most fire. The rival was dinged for its controversial agent revenue sharing program and focusing too much on Virbela, a cloud-based platform, instead of home sales.
“They are not thinking about sales, but the commissions they are getting from the agents they recruit,” Doll said.
“We never disparage a competitor,” added panel member Kevin Ard, a Fair Oaks, California, RE/MAX broker. Ard proceeded to knock Realogy brands’ Coldwell Banker and Century 21 for “living in the past” with technology that allegedly does not alert agents to leads.
A lot of hot air
One big advantage RE/MAX touted is brand awareness.
An in-house company survey found that 37 % of U.S. consumers are aware of the company. That’s compared to 33 % for Century 21, 19 % for Keller Williams, and less than 2 % for the likes of Compass and eXp.
Part of the reason is RE/MAX’s longevity. Another part is bright red hot-air balloons, “a marketing tool to help us maintain #1 brand awareness,” stated a company spokesperson.
RE/MAX’s 110 “eight-story high” hot air balloons are touted as the largest fleet in North America. The company has one dedicated employee for its balloon program, but 22 independent balloon pilot contractors.
Though the balloons were sidelined amid the pandemic, RE/MAX is reviving the balloons for appearances in “highly trafficked roads.”