As other companies are contending with executive shakeups, multi-million-dollar acquisitions, recruiting wars, rapid-fire technology rollouts and lawsuits for 2021, EXIT Realty is facing a unique challenge the average brokerage has little trouble with: visibility.
Jeff Lobb, SparkTank Media
“Some of the challenges they face, especially even now more than years ago, is getting the message and branding out in a very noisy world of many new models,” Sparktank Media CEO and former EXIT franchisee Jeff Lobb told Inman. “Getting their name and brand out not only to the consumer but to agents [who] will actually understand what their model is.”
Founded in 1996, EXIT Realty has 22,400 agents across the United States and Canada who pulled in $20.39 billion in sales in 2020. EXIT has added two new regions and 19 offices since last March, which the brokerage expects will result in a 15 percent year-over-year growth in agent count and transactions from 202o to 2021.
The brokerage has also cemented several technology and leadership partnerships; however, there’s been little fanfare.
“They need to get more name-brand recognition and exposure for what differentiates them,” Lobb added while noting EXIT has the chops to compete with bigger, well-known brokerages such as Keller Williams or eXp. “While I think they know that internally, they need to do a better job at the higher level of branding and marketing.”
So, what challenges and opportunities lie ahead for EXIT in 2021? Here are four things to watch out for.
Challenge: Marketing ‘The EXIT Formula’
When EXIT launched in 1996, the company shook up the real estate industry with a unique commission model the brokerage called the “The EXIT Formula.” The formula starts agents on a 70/30 commission split (which becomes 90/10 after reaching $100,000) and provides the opportunity for ongoing residual income beyond retirement through recruiting new EXIT agents.
When the new agent makes a sale, the recruiting agent receives residuals equal to 10 percent of the gross commission, which EXIT calls “sponsoring.” After retirement, the recruiting agent’s residuals will drop to 7 percent per sale and will continue as long as their recruit stays with EXIT. Lastly, agents can name beneficiaries to receive 5 percent residuals after their death.
“What attracted me initially to [EXIT] as a sales representative and then a franchise owner was the model,” Lobb explained. “It was unique and beyond anything that was available — to offer residual-based income and to reward helping grow and build other people.”
“So it wasn’t just real estate, it was the proposition of having another stream of income within the sales model because let’s face it, if you don’t perform in real estate, you don’t get paid,” he added. “So that type of solution was rewarding people to help build the company rewarding to help make other people successful, and you got a piece of it.”
Now, there are a plethora of models available, such as J.P. & Associates Realtors’ 100-percent commission splits, Keller Williams and eXp’s profit-sharing options, Redfin’s salaried positions, and the growing number of brokerages switching to a virtual model with lower overhead for franchisees and agents alike.
Lobb said the disconnect in marketing is blocking the brokerage’s growth, which unsurprisingly, impacts transactions and cash flow. To compensate, he said EXIT should look into other revenue streams such as title and mortgage services.
“I think they need to find other revenue streams, or they need to recruit at a faster pace,” he explained. “Every state has different legalities of how to [launch mortgage and title services], so it’s not a broad statement.”
“But many [brokerages] create marketing arrangements or other revenue streams from those [mortgage and title] providers,” he added.
EXIT CEO Tami Bonnell said the brokerage has taken a different marketing approach than its competitors, who create wide-ranging print, digital and social media campaigns. Instead, she said, EXIT has adopted a hyper-local approach that hinges on creating marketing for the specific regions EXIT serves.
“We do a tremendous amount of target marketing, which you wouldn’t necessarily see unless you were in real estate in those markets,” she said in an emailed statement post-interview. “In addition to target marketing via social media and other outlets, we do a tremendous amount of speaking engagements that give us a great return.”
“We also have the spirit of EXIT — money from every transaction goes to a charity in that market, the consumer is notified and we provide press releases free of charge to our brokerages,” she said. “The consumer wants to work with good corporate citizens and we track all marketing to see the return. We always try for a unique differentiator [by] not doing what every other brand does.”
Opportunity: Investing in technology
EXIT’s moves this year have focused on technology, with the brokerage cementing two partnerships with homebuying and homeselling estimate platform NetSheet and concierge platform MooveGuru. Bonnell said both partnerships are part of the brokerage’s commitment to making sure its agents can provide a robust end-to-end transaction experience.
Exit Realty CEO Tami Bonnell
“We want to make sure our agents have clients for life,” she said. “The more value they provide for the consumer, the better off they’re going to be.”
The NetSheet partnership allows agents to generate leads through detailed estimates that reveal the total cost of a transaction for a buyer (down payment, closing costs, etc.) and the net proceeds for a seller (sales price minus commission, appraisal, renovations, etc.). Meanwhile, the MooveGuru partnership enables agents to provide post-transaction assistance for clients who need help with moving and arranging their utility and mail service.
“When the consumer can have [that service] free of charge [and] all those nitty-gritty details that drive you crazy when you’re moving, such as changing your phone and electricity and utilities, it creates a really smooth transition,” Bonnell said of the MooveGuru partnership. “It just ups the experience. This is the experience economy and we wanted to update the experience for every consumer and make it easier.”
Bonnell said she’s also proud of the updates EXIT has made to its suite of proprietary technology that includes 14 desktop and mobile tools to create agent websites; generate, capture and manage leads; market listings through ads and social media; and manage transactions.
However, Bonnell said she’s most excited about EXIT’s mobile business card and Smart Sign technologies that allow consumers to access on-the-go information about agents and listings through texts.
“We have a digital marketing strategy with our EXIT app that is phenomenal and interactive,” she explained. “We also have a mobile business card — if you text 85377 and you just punch in TAMI and hit send, you’ll get my mobile business card sent to your phone.”
Bonnell said EXIT has a similar texting system for their listing signs, which have come in handy during COVID as buyers and sellers seek to reduce the number of face-to-face interactions as much as possible.
“[With our interactive signs], the biggest comments we’re getting back from our agents are [their buyers] looked at 10 homes but they only want to go into two — that makes the seller feel safer that makes the buyer feel safer,” she explained. “But it’s also an efficient use of time and people love playing with the tools, right?” she added.
Lobb, speaking of his years as an EXIT executive, said EXIT’s technology initiatives are a longstanding part of the brokerage, as they were some of realtor.com and Dotloop’s first broker partners: “We were helping navigate those relationships to bring better tools and systems to our agents.”
“I can tell you that they have evolved their technology a bunch towards being much more mobile, being much more lead generating if you will, and while I don’t have any insight to their proprietary stuff, I know they’ve continued to enhance the agent experience,” he added. “I think they have evolved quite well.”
Challenge: Expanding into secondary markets
Over the past year, EXIT has added two new regions and 11 new region owners, who own the rights to a state or province and are responsible for the growth of EXIT’s presence within their area. Bonnell said the addition of leaders in markets primarily along the coasts, such as Virginia, Massachusetts, Oregon and California, represents the brokerage’s focus on growth.
“Since we were sheltered in place, we’ve put in 11 new regional leaders, which are people that own the rights to a state or a province,” she said. “We have three more [regional leaders] coming in March, so we’re really in growth mode.”
“When you bring in these strong people and they’re building a strong base, and when they go to retire, they’re passing the baton to somebody that’s even stronger,” she added. “We stay focused on the same few areas, but we’re upping our game every year.”
Bonnell said her team is focusing on expanding their footprint into second-home and secondary markets, as the rise in remote working has opened the door for buyers and sellers to relocate to smaller cities with plenty of room for growth and development.
“We’re seeing migration patterns that are changing so rapidly. You can’t even follow migration charts anymore,” she explained. “Because people are moving because of quality of life, I strongly believe cities are going to revamp themselves to become more attractive with more affordable prices.”
“I can’t wait to see some of the unique zoning that’s going to happen with more mixed-use buildings,” she added. “People are able to satellite from home, so communities are going to be connecting in a different way. We’re definitely paying attention to where consumers are going to.”
Lobb said EXIT’s focus on secondary markets is a smart move as it gives the brokerage an opportunity to dominate markets that have been overlooked by competitors.
“I don’t know their inner plans, but where I’ve seen some expansions happen really successfully has been in some of the secondary markets where competition is lessened,” he explained. “[People in those markets] are open to a new way of doing business because there’s a lot of businesses that are still running as they did 30 years ago, and they see a model like [EXIT] that brings in culture and leadership.”
“They’re having much more success in those secondary markets and there’s a lot of business out there for that,” he added.
Opportunity: Leaning into leadership and education
Lastly, EXIT’s scaled-down approach and model have enabled them to deeply invest in leadership and education, which has only intensified during the pandemic. Bonnell said EXIT has doubled-down on classes about productivity, managing finances, emotional intelligence and mental health, alongside several new certifications regarding climate change and homebuyer finances.
“I believe this year and next year are going to be really good transaction-wise, but then we know the market is going to shift,” she said. “The more we educate [our agents] on all the possibilities, the better they’ll be. That’s why we were the first to sign up to have disaster certification.”
“There are some things that are changing because of the climate, whether that’s drilling or fracking or weather patterns,” she added. “We want to make sure our people are aware and give them the big picture of what those possibilities are.”
EXIT Director of Leadership, Bob McKinnon
EXIT Director of Leadership Bob McKinnon said the brokerage’s investment in leadership training and agent education has enabled their team to navigate a difficult year filled with unexpected twists and turns. By helping agents and brokers build an optimistic and resilient mindset, McKinnon said, EXIT has created a strong foundation that’s able to outlast market shifts, whether its due to a pandemic or climate change.
“[Our agents] have a great opportunity this year to increase their value as a brand,” he said. “Agents are reading, staying connected to the marketplace, being optimistic, and using that in their personal marketing.”
“This isn’t a time, in my opinion, to be just marketing yourself and who you are and what you do — it’s an opportunity to be giving people facts and figures,” he added. “Agents should be strong in their ability to counsel buyers and sellers as to what the opportunities are, why they should move now and those kinds of things.”
In addition to new certification courses, McKinnon said he’s spent more time than ever doing one-on-ones with regional leaders and agents to learn about their specific concerns and needs. He’s also doubled-down on interviewing leadership experts, such as John Maxwell, to help raise what he calls EXIT’s “leadership lid.”
“We are reading lots of leadership books, and we are having mastermind Zoom calls where we’re literally going through these leadership books together,” he said. “John Maxwell says every person has their own ‘leadership lid,’ and if you’re a ‘five,’ it’s going to be hard for you to hire people that are above a five, and keep and motivate people above the five.”
“Therefore, we want to provide a scenario where you can raise your individual lid. It’s an intentional commitment to learning the basic principles of leading your enterprise,” he added. “You can learn to do it and we have examples of people who are doing it.”
McKinnon and Bonnell said EXIT’s intense commitment to leadership training is at the core of their model and purpose, which is to raise and build on human potential. McKinnon, who co-founded Century21, said as the world focuses on technology and tools, it’s easy to forget about what truly makes real estate companies tick.
“I’ve been around a long time in this business, and I believe that our focus as managers and leaders in real estate has been on how many agents we have numbers, on market share profits, stock prices and shareholders, and that’s exemplified in that we have 100 percent turnover rate [as an industry].”
“In real estate, every four years, we’ve allowed hundreds of thousands of people to fail in this business because we’re focused on the wrong thing,” McKinnon added. “So my message to real estate is: This is a time to double down on connecting with your real estate agents in a very personal way.”
“Empathy-driven leadership right now will win the day.”
