Someone once told me that taking a company public the right way would be one of the hardest things I’ve ever done in my life. Of course, as an eight-year Marine Corps Infantryman, that idea was absurd. But, while it certainly wasn’t harder than fast-roping onto the deck of a moving ship or clearing enemy combatants from a building, I can now fully appreciate what they meant. It’s a different kind of hard, a different kind of stress, and like the military, it’s not for everyone.
Many people ask us why we decided to go public so early in our business, and the answer is simple. We had more opportunities than we had capital. Our biggest expense was not offices, employees, or even technology. Our biggest expense was simply keeping up with our explosive growth. After two years and countless man-hours, plus millions of dollars spent on the process, we finally made our debut on the NASDAQ on July 31, 2020.
During our IPO, we stated that we were raising capital for three main purposes: accelerate growth, invest in our proprietary technology, and make strategic acquisitions to include mortgage, title, insurance, and smaller brokerages. That was twelve months ago, and we haven’t missed a beat executing on our vision.
We felt it was important to acquire and wholly own these companies. An agent’s reputation is on the line when referring to another company, so we thought it was important to own the experience rather than rely on others to provide quality service.
Fathom Realty has a unique business model compared to our peers. We charge our agents a simple, small, flat transaction fee per sale. Plus, we do not charge monthly fees, which means if our agents don’t close a home, they don’t pay. Yet, even with taking a fraction of the fees our peers charge, we could still achieve profitability on the brokerage business at fewer than 10,000 transactions per quarter. To accomplish this, when most of our peers didn’t achieve profitability at even 30,000 transactions per quarter, is a testament to our operation, especially when we provide everything an agent needs to be successful without having to sacrifice anything.
Running a profitable real estate business with our model requires us to keep our costs low. The best way to do that is by owning our technology and eliminating the bloat that accompanies office spaces. Our full technology platform allows us to streamline our operations, reduce required manpower, cut our costs and reliance on others, and ultimately provide a better user experience for our agents and clients. Our mission is to provide the greatest value to agents.
If you want to know whether agents love the brokerage they’re with, there’s no better evidence than that of agent attrition. We have one of the lowest agent attrition rates in the industry. In fact, 77.5% of agents who leave close 1 or 0 homes per year, 94.5% close less than four homes per year, and only 2.5% close north of 10 homes per year. In fact, we ended 2020 with 5,471 agents and only lost 14 who would be considered high-producing.
As we invested capital in our technology, we decided to make two more strategic acquisitions:a home search and CRM company called Naberly and a big data aggregator and hyper-local content creator called LiveBy. These two companies filled out our full technology offering, and in time, will allow us to roll out our own national, brand-agnostic, home search portal. In addition, we plan to generate leads for our agents, so they no longer need to buy leads from large portals competitors.
In the last 12 months, we grew our revenue by 118%, our agent count by 53%, and our transactions by 74%. We made numerous strategic acquisitions, and we’re exceeding every promise we made on our IPO roadshow. Plus, as we expand across the U.S., we’re actively talking to more brokerages about mergers and acquisitions. I could not be prouder of our humble beginnings and the fantastic employees and agents who I’m honored to serve every day.
To learn more about Fathom Realty, visit FathomCareers.com.
Josh Harley is a serial entrepreneur, Founder, and CEO of Fathom Holdings, tech geek, innovator, disruptor, marketer, teacher, artist, U.S. Marine, and an Alaska-raised sweet tea fiend. Josh believes deeply in the principles of servant-leadership and strives to be an example to his leadership team and his agents on serving others first.
