RE/MAX CEO Nick Bailey on thriving in a changing economy
Bailey sees this period as a natural rebalancing, with agents continuing to be front and center: “We’re going to continue to lean into what we are good at.”
- RE/MAX priorities include agent productivity, outselling the competition and staying ahead of market change.
- Experienced, productive agents will lead the way in a shifting marketplace.
- Leveraging technology to drive business and meet consumers “where they are” is essential.
Editor's note: The high-flying residential real estate industry came back to earth in 2022, with losses, layoffs and the quick cooling of an overheated market. We're having 1-1 conversations with the industry's most influential leaders to learn how they are handling this "reset moment."
Many agents working in real estate today have never had to help buyers navigate interest rates over 4% or manage listings that continue to sit on the market without an offer.
Nick Bailey, president and CEO of RE/MAX, offered that assessment of the shifting real estate marketplace. "This is a brand-new business for a lot of people," said Bailey, whose global company operates one of the largest franchise networks in the U.S. and more than 40 other countries.
For agents to succeed in this new reality, support and education are essential, said Bailey, who has spent more than three decades in the industry.
"The question is, who will be the people that help the buyers and sellers with transactions in the coming year? And it's going to be, in my opinion, the most productive agents, the most experienced agents, and those who've gone through these changes before," he said, recalling the housing collapse of 2008.
"Most of our [RE/MAX] agents went through the Great Recession, which was the biggest change we've seen in our industry," Bailey said. "We are very proud of our agents and the fact that our average agent has over 15 years' experience," he said.
A slowdown, not a stop
Bailey described the softer homebuying market in 2022 as a natural readjustment after years of soaring price increases in many parts of the U.S. The market is correcting itself, he said. "This is certainly just a rebalancing that is giving buyers a chance again," Bailey said.
And, he added, a slower market isn't a reason to panic. "People will still buy and sell homes, regardless of interest rates, regardless of inflation, regardless of politics, regardless of recession.
"People get married, they have kids, they get divorced, they move closer to family, they change job locations," Bailey said. "All of those life events create catalysts for changes in homeownership. And so it will happen."
Agents, he said, remain front and center in helping consumers understand their options, such as alternative mortgage products that can help buyers get more competitive financing.
Embrace tech, or get left behind
He also noted the importance of technology to younger generations of homebuyers and its role in reaching consumers "where they are."
"When you look at the vast majority of first-time homebuyers, you know millennials make up 35-38% of the homebuying market — and half for the last couple of years. If you're not embracing certain things about technology, you're not going to meet the consumer where they want to be met," he said.
Consumers online generate more than 200,000 leads each year, he said. "I don't believe agents need more leads. They need transaction-ready consumers who are closest in the near term to buying and selling properties. And that's the direction we're going with our technology," he said.
RE/MAX began implementing MAX/Tech, its proprietary lead management, CRM and marketing platform, earlier this year, and Bailey is encouraging agents to more fully explore the power of technology to drive sales. "I do not believe that tech is going to replace an agent. But I also believe that an agent that does not adopt tech will get replaced," Bailey said.
Selling real estate will continue to be a people-first business, he said, with the caveat that agents need to harness technology to better understand their customer base.
"Agents spend all the time and money making their agency websites beautiful. But they don't spend any time or money getting people to it," he said. "And if they would just put their consumers in a database and let the AI behind it drive and tell them who they should be focused on — that, to me, is where technology is going to win at getting people business."
Technology has also simplified the paperwork in real estate transactions, he said. Digitized documents and e-signatures make it easier and more convenient for consumers to peruse and sign agreements on their smartphones and other mobile devices. "And that is front and center of where tech is important. But you still rely on your trusted advisor, the real estate agent, for the transaction," Bailey said.
Forging ahead, keeping their edge
At RE/MAX, Bailey is prioritizing agent productivity, outselling the competition and staying ahead of market change. "Nobody in the world sells more real estate than REMAX — over two million transactions last year. It was a record for us. And it was a record for the industry in the history of real estate," he said.
In this uncertain economy, RE/MAX will stay focused on providing quality real estate services through its network of franchise companies, he said. "We're going to continue to lean into what we're good at, which is making sure that we're the number one most recognized brand in real estate," Bailey said, "and that it stays at the forefront."
"As I've grown through this industry," Bailey said, "I realize that real estate agents don't sell houses. They sell the service of connecting buyers and sellers to make the American dream come true."