RE/MAX Holdings Inc. is launching an array of strategic initiatives to grow its business by attracting new brokerages and agents, building on the agent-teams model, investing in its mortgage line and introducing a third-party technology platform that will replace existing in-house systems and result in the layoff of 17% of the company’s workforce, or about 120 tech-focused employees.
“RE/MAX Holdings continues to focus on increasing our near- and long-term profitable growth,” CEO Steve Joyce said in a press release. “After a thoughtful and thorough review, we are moving forward with these strategic endeavors, each of which is expected to contribute to our growth objectives.”
Brokerage mergers and conversions
To bring in new brokerages, the company formally launched a mergers-and-conversions initiative under which franchise sales personnel have been given the go-ahead to offer financial support to entice brokerages into converting to the RE/MAX network, either through upfront capital to assist with conversion costs or a temporary waiver of recurring franchise fees.
“Our data shows that U.S. and Canadian agents who join RE/MAX and stick with the brand typically increase their sales over time,” Bailey said. “These statistics address a chief concern about agent productivity that tends to hold many of these potential mergers or conversions back. And that’s an important message for us to continue to reiterate across the industry, especially now as the market is fluctuating and we see many experienced, successful brokers looking to transition their businesses.”
Pilot program to boost teams
RE/MAX is also launching a pilot program in California, Florida, Maryland, New Jersey and Texas that will offer an alternative fee structure for medium to large teams. The program will reduce the continuing-franchise and marketing fees for team members, not including team leaders, and it will cap the broker fee for participating teams at $1,000 per team member, including leaders.
“Teams have scale and capabilities that give them a clear competitive edge,” RE/MAX President and CEO Nick Bailey said. “We realize not everyone wants or needs to be on a team — and in our network we have many individual top producers — but more and more teams are seeing RE/MAX as the network to join if they want to grow and thrive.”
Motto Mortgage growth
RE/MAX will make additional investments in its Motto Mortgage and wemlo lines with the goal of boosting its annual mortgage-related revenue to $100 million by 2028. Future Motto Mortgage franchises in most cases will be required to use wemlo’s processing services, the company said.
“Motto has sold over 300 franchises to date and we have 200 open offices,” said Motto Franchising LLC and wemlo President and CEO Ward Morrison. “We believe we can eventually grow that number to more than 1,000 open franchises. Motto has a unique and attractive value proposition, and we would like to get to 1,000 open offices much sooner than our current growth trajectory suggests.”
Beginning in the fourth quarter, RE/MAX will begin rolling out Inside Real Estate’s kvCORE technology platform for brokers and agents, replacing the booj products developed by the company. These will sunset mid-2023, and as a result of the phase-out, it will reduce staff, most of whom work in the tech department.
The new kvCORE platform will provide an integrated customer relationship-management (CRM) system with customizable websites, enhanced lead-generation services, “robust” listing tools and presentations, a marketing autopilot feature and business analytics, the company said in an SEC filing.
Other in-house tech systems, like RE/MAX’s First app and its Seller Star ratings that use predictive analytics to help identify potential sellers, as well as certain functions of the Megaphone marketing tool, will remain available, while other systems, like the RE/MAX Hustle custom-video tool and Photofy, which allows agents to send RE/MAX-exclusive graphics and videos via social media or text, will be integrated into the new kvCORE platform.
“In today’s highly competitive market, much of the agent-facing technology — CRM, websites, etc. — has become table stakes,” Bailey said. “Providing our network with RE/MAX technology powered by kvCORE, including our proprietary tech and branding integrations, alongside an ongoing commitment to invest in and enhance the www.remax.com website with internal resources will enable us to focus on what we do best: Help small business owners build their businesses.”