- Adam Contos became chief executive of the residential brokerage franchisor RE/MAX in February 2018.
- Contos' vision for RE/MAX's tech stack prioritizes relationship-management ahead of automation, and looks to connect RE/MAX's agents with digitally native clients.
- In his time as CEO, RE/MAX has made two tech acquisitions. RE/MAX bought booj, a real-estate agent-centric CRM, and First, a machine-learning tool that mines an agent's contacts to see which of them might be looking to move soon.
- Growth in the number of agents is key for RE/MAX's franchise model.
- But in the US, RE/MAX's agent growth had stalled in 2018 and 2019, even though it continues to grow its international business.
- Visit Business Insider's homepage for more stories.
In February 2018, RE/MAX founder Dave Liniger handed over the reins to new CEO Adam Contos. The same month, the company made its first major tech acquisition, the real-estate tech firm booj.
RE/MAX had grown from a single Denver office in the early 1970s to the second-largest American real-estate franchisor, according to real-estate consulting firm , with a presence in more than .
While the company, like any real estate company, worked with third-party tech providers, a new wave of tech-forward competitors like eXp Realty and SoftBank-backed Compass were developing tech tools in house.
2020欧洲杯小组赛Technology has become an important part of attracting and retaining agents, and of making those agents, and the brokerages they work for, more productive.
2020欧洲杯小组赛Growth in the number of agents is key for RE/MAX's franchise model, as almost 2/3 of all of the company's revenue comes from franchising fees, broker fees, and annual dues paid by the agents that work for RE/MAX or one of its franchisors.
2020欧洲杯小组赛But in the US, RE/MAX's agent growth had stalled in 2018 and 2019, even though it continues to grow its international business. Total agent count increased roughly 5% to 130,889 agents in 2019, while the U.S. was basically flat at 63,121 agents.
The broader industry is adjusting to agents that are now including technology, and the productivity it can bring, as one of their criteria for choosing where to work.
"Historically, what most of the franchise owners offered their franchisee is the brand halo," Clelia Warburg Peters, president of Warburg Realty and a co-founder of proptech VC MetaProp "Now that is less relevant, what matters are the practicalities you can offer."
Real estate tech startups have seen a massive wave of funding over the last few years. Last year, there was $31.6 billion in funding for real estate tech according to CRETech. Brokerage and broker-adjacent companies Opendoor, Knock, Compass, and Chinese-brokerage Beike commanded four of 2019's ten largest funding rounds.
And real estate experts have told Business Insider that technology could drastically change the brokerage landscape by 20302020欧洲杯小组赛, with iBuyers and assembly-line like brokers gobbling up much of the traditional real estate market.
RE/Max, like other brokerages, is racing to keep up with Compass, which has grown from to . Compass, flush with cash from SoftBank2020欧洲杯小组赛, acquired . and has used its technology as a tool to recruit agents from other brokerages.
Similar to Compass, RE/MAX has acquired tech providers and brought its tech fully in-house, while other competitors partner with external tech providers.
2020欧洲杯小组赛The end of last year saw what could be a welcome inflection point for RE/MAX. On a call to discuss the results, Contos said that RE/MAX's tech acquisitions, as well as other recruiting initiatives, drove a net gain of 573 US agents from the third quarter to the fourth quarter.
2020欧洲杯小组赛He said that he is "optimistic about the direction of recruiting agent growth," and expects franchises to grow with new RE/MAX agents, attracted by tech-enabled increases in productivity.
"It's a cycle that builds upon itself," Contos said on the call.
'We need to take complete control of this'
The acquisition of booj in the same month that Contos took the helm as CEO was followed by the release of the booj platform in August of last year, adding a centralized CRM that can create agent websites, automate some communications, and integrate into deal-management software.
2020欧洲杯小组赛RE/MAX also bought real-estate machine learning firm First in December of last year, and then launched a new real estate search website that integrated into booj in February. A RE/MAX spokesperson told Business Insider that booj is free to all RE/MAX affiliates, and that First is $39 a month for a yearly plan and $59 a month for a quarterly plan.
RE/MAX acquired booj for $26.3 million in cash and $10 million in equity-based compensation to be earned over time, and First for $15 million in cash and $10 million in equity-based compensation to be earned over time, according to RE/MAX's 2018 and 2019 annual reports.
Contos told Business Insider that RE/MAX has made acquisitions central to its tech platform, so that the company can make sure RE/MAX's tech experience matches its brand vision.
2020欧洲杯小组赛"We need to take complete control of this," Contos told Business Insider. "Not 100% complete control, but as close to that as possible by acquiring our own firm that can build out the framework and structure."
Still, unlike some of the proptech competitors, RE/MAX is looking to attract agents and make them more productive, as opposed to cutting out the human component.
"You don't put your real estate business on autopilot and then just let people log into a vending machine that can conduct transactions," Contos said.
Still, Contos said that other industries have set consumers' standards for quick communication, but that the emotional and transactional complexities of real estate have made that industry lag behind.
"There are no wows," Contos said when asked about what technology has been most exciting or unexpected. Instead, he called RE/MAX's tech investments a "foundation" for strong relationships with digitally-native clients.
In March of last year, the RE/MAX and Redfin announced that Redfin would refer customers in areas that Redfin didn't service to RE/MAX agents in return for a fee.
2020欧洲杯小组赛Two months later, the partnership was dissolved. A Redfin said that RE/MAX withdrew from the partnership as a result of Redfin rolling out its Direct service, which allows Redfin's sellers to sell to unrepresented buyers and save on buyer side commission fees. Redfin's press release said that "RE/MAX became concerned that Redfin Direct would undermine the standing of North American buyers' agents."
While Redfin's Direct program isn't a traditional iBuyer2020欧洲杯小组赛, it shares features with the model, which uses technology to replace some of the agents' usual function in a transaction.
RE/MAX didn't publish its own press release on the news, and Contos declined to discuss the topic further in conversation with Business Insider.
A household CRM approach
Contos told Business Insider that good technology provides a better experience, but "it doesn't remove human interaction."
The booj platform, developed after RE/MAX's acquisition of booj, is a series of programs that connect together and act as a central clearinghouse for all RE/MAX agent's interactions with their leads.
Agents access their leads in booj's CRM, a program that details all of an agent's contacts and communications, where agents can set tasks to follow up with potential leads and send communications.
Ido Zucker, booj's cofounder, said that the platform shares features with other CRMs, but that the company's almost 15 years of experience creating tools for real estate sets it apart.
"We're not building in an ivory tower," Zucker said. Zucker is familiar with the needs of real estate agents: his wife is a real estate agent and he has developed for scores of agents since launching the company in 2006.
One distinguishing feature of the booj, according to Zucker, is the household feature.
2020欧洲杯小组赛Typical CRMs classify contacts as individual contacts, but booj sorts them into households, so that agents are able to map out their contact with multiple members of the same household. It also allows them to track when the children move out, and are looking for their own home, or when a divorce leads to one, or more, members of the household looking for a separate home.
Households are also presented geographically, instead of in a contact list, allowing an agent to quickly understand where there leads are, and what areas they may want to develop leads in in the future. Zucker said that unique features like these should drive adoption of booj by RE/MAX's agents.
While currently just available for RE/MAX's US agents, the goal is for booj to catch every interaction RE/MAX's leads have with the company around the world.
How First's machine-learning tools fit in
2020欧洲杯小组赛The booj platform's data warehouse will feed into First, Contos's other major tech acquisition, announced in December of last year. First, founded in 2015, developed a machine-learning tool that maps an agent's network and tries to find relationships that could turn to leads.
2020欧洲杯小组赛First uses a wide range of factors to determine if a dormant lead may be looking to move, and also makes suggestions to agents as to the best way to reach out to a potential client in their network. The idea is to use machine-learning to foster a more personal relationship.
"Ultimately, the home buyer and seller and the people in your relationship list don't want to be leads. They want to be in conversations with somebody that they believe in and trust," Contos said, explaining why First's relationship-mining was so attractive to RE/MAX.
Mike Schneider, CEO and co-founder of First, told Business Insider that being acquired by RE/MAX was a "much more cost-effective way" to gain more users, and therefore increase the amount of data that the machine-learning system could train itself with.
2020欧洲杯小组赛Complete access to booj's CRM database will give First the ability to expand its view further into the lifecycle of leads, tracking how each decision an agent makes affects whether the agent closes the deal. It could even predict the potential outcomes based off of the characteristics of the lead before it is even identified.
Both First and booj have kept separate offices, in Durham, North Carolina and Denver, Colorado. Contos was quick to point out that First, keeping with the startup ethos, has an actual slide in its offices. Zucker, from booj, said that the company has kept its office, and startup culture, even though its office is very close to RE/MAX's corporate headquarters.
2020欧洲杯小组赛The hope is that the companies can retain a startup ethos, and startup tech talent, under larger corporate owners.
2020欧洲杯小组赛"I don't want to buy a company. I want to buy the talent," Contos said.