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Leo Pareja believes there’s something that sets him apart from many of today’s other real estate executives.
“I actually sat across from people at a kitchen table for 16 years of my life,” Pareja recently told Inman, his point being that he has been in the trenches as an agent who works with consumers.
Leo Pareja
Today, Pareja serves as the CEO of eXp Realty. That puts him in charge of a company that has turned into one of the real estate industry’s most famous success stories in recent years. And it gives him a vantage point from which to advocate for the world he’d like to see — a vantage point he’s used recently to champion Clear Cooperation.
Pareja will appear on stage next month at Inman Connect New York. In advance of his appearance, Pareja sat down for a phone conversation with Inman to discuss the future of his company and the industry. The takeaway from this conversation was that he sees change as inevitable and technology as promising, among other things. And, he argued that jettisoning the values of Clear Cooperation risks breaking America’s unique MLS-based real estate landscape.
What follows is a version of that conversation that has been edited for length and clarity.
Inman: When you take the stage at Inman Connect New York next month, what message do you want to share with members of the industry?
Leo Pareja: The one thing we’ve been talking about is, change is inevitable in this industry. I’ve been doing this for 23 years and I never remember being in a year where it’s like, “this is average.” It’s almost always like it’s up, it’s down. It’s hard, it’s busy, right? Because it’s never easy. It’s either we’re struggling or it’s an overwhelming amount of activity.
I think this year, my biggest takeaway was, at the end of the day, would you like to be a market participant and help families go through this very difficult, expensive, emotionally charged, infrequent transaction? If the answer is yes, arms wide open, we accept you into the space.
I think we’re caught up in our inside baseball of jargon and rules. Like, “Did you get the [buyer broker agreement] executed at the perfect time of disclosure?” But at the end of the day, a young family who’s never done this before just needs a professional to give them as much information as possible, educate them as much as possible, and guide them to the decision that’s best for them and their family.
Inman: You mentioned that change is inevitable. In what ways has eXp specifically changed? If I joined you, say, two years ago versus today, how might the experience be different?
I would say two years ago, we were still somewhat of a novelty in the industry.
You picked 24 months, so I’m just going with that, and if you look over the last 24 months, almost all the growth has come from very similar models to us. We went from a niche idea — a cloud brokerage — to the way that new companies are growing. So kind of agnostically looking at it from a distance, whether I happen to run this company or not, it’s like the most energy and the most excitement has been around the cloud-based, virtual, corporate-owned models. Almost every new competitor looks a lot more like us than the legacy companies.
And we’ve grown up from a cool, unique model to being the best brokerage on the planet. So, can we pay our agents faster? Can we answer [agents’] questions and give them the broker support they need 24-7, around the clock, with 30-second hold times? We’re actually obsessing over the operational excellence at scale because if we’re no longer special purely on the model and more companies look like us, to me the differentiator is value and service and just the full value stack.
So, [we’re] leaning in on training and education products. And, do we have the best possible stack of third-party tech?
One of the things that’s important is that I realize I serve many constituents. We approach this very much from the perspective of, “How does this make my life faster, stronger, better?” [eXp World Holdings CEO Glenn Sanford’s] North Star has been super clear. It’s the first thing he told me when he was trying to get me to come over here. It was like, “I want to be the most agent-centric company on the planet.” And that’s how he makes all decisions. That’s literally the only instruction I’ve gotten since I got here.
Inman: If that’s your North Star, what are your goals for next year?
How do we deliver the best tools and education to empower agents to serve consumers while still limiting liability for themselves and their customers?
Also, it’s staying on top of what is considered cutting-edge technology. With the introduction of AI, it’s kind of the co-pilot experience. So now I can have ChatGPT proofread for spelling while keeping tone and context. It’s editing or correcting punctuation, moving the sentence around correctly. And that’s just one implementation.
That same thing could be done to creative, to graphics, to whatever kind of weaknesses you would have in your general personality profile or ability profile.
So we’re really experimenting with what kind of AI upgrades we can do throughout the entire experience.
Let me pivot here to Clear Cooperation, which you’ve been vocal about supporting. Where is this issue going next?
If you remember my background, I know a lot about MLS technology because I built some. Years ago, I actually spoke to the Japanese government and the Australian government when their associations wanted what we have. And they said, “How does it work?” And I said, “MLSs have a two sided coin: cooperative compensation and mandatory participation.”
To me, that was the glue that created the North American real estate marketplace. And let’s be candid, we lost half that value proposition this year. Deleted, right?
The other thing where I get kind of very big in my feelings is the concept of, “Hey, I’m going to market [a listing] off-market. And if I don’t get the behavior I want, then I’ll bring it to the marketplace.” It’s like, hey, do you realize that the concept of off-market only exists if there’s a market? And that’s where I think some of the folks on the other side of the argument, they’re just missing the forest for the trees here.
We’re still fierce competitors, right? And that’s what I would say to the DOJ or any detractors. We’re fighting to the death for these transactions. We’re competing on value and service and cost and everything else.
We all agree to play by these rules because this third party enforces the rules of engagement in a subscriber agreement. But if you’re telling me you’re going to hold properties off market, but you still want my IDX feed side by side with your inventory, I have a problem with that.
And so if they do it, then I’m going to do it. And then Redfin’s going to do it. And then Anywhere is going to do it. And then I can tell you exactly what that looks like. That’s what I have to deal with in continental Europe, where I have an agent who relocated from Southern California to France.
She pulled me aside and goes, “Do you realize that if I have an expat coming to look at properties here in the south of France, I have to go to eight to 10 websites to maybe get an accurate picture of what may be available?”
That’s inefficient. How is that good for the consumer?
I actually sat across from people at a kitchen table for 16 years of my life. Not once did a seller look me in the eye and go, “Hey, I want you to sell my house, but don’t you dare put it on the MLS.” That never happens.
That should be an exception: law enforcement or kind of high-profile people, which is the argument made on the other side a lot. It’s like, okay, that’s like 1 percent. But just like anything else in life, they should sign a disclosure that says, “Hey, I acknowledge that by selling the property off-market, I’m potentially leaving 10 [percent] to 15 percent of the value of the property because that’s what the data shows.”
Look, you can sign a disclosure. It’s your right. But if you don’t want to be a participant, then you don’t get access to the data. It’s pretty straightforward. There’s nothing that says you have to join NAR and join the MLS. If you want to transact real estate, you just get a license. You’re a salesperson and you can represent people per state statutes.
But I did this at a very real level for many, many years. So I feel like I have a very different vantage point than the average executive who has not.