A slower market isn't slowing growth at The Real Brokerage
Real CEO Tamir Poleg said the company is prioritizing growth — through acquisitions, agent count and market share — to improve the homebuying process.
- The brokerage acquired title and lending companies this year in an effort to create an all-in-one homebuying experience.
- Real significantly increased its agent count and market share throughout 2022, and plans to continue with that strategy in the year ahead.
- As a publicly traded company, 2023 will also be an important year to demonstrate profitability.
It's time to make the homebuying transaction simpler. That's Tamir Poleg's goal, and to get there, his company is busy rebuilding what he thinks is a broken system.
Poleg, co-founder and CEO of The Real Brokerage, said the company's recent acquisitions of both a title and a mortgage company will be the building blocks of an improved system for consumers, giving them more control over how and when a transaction gets done. The company acquired Expetitle in January and announced the completed purchase of LemonBrew Lending earlier this month.
"When you think about the journey of a typical buyer from thinking about buying a home to closing, there are a lot of points along the way that create anxiety," Poleg said. "And those points typically have to do with the fact that you don't control things, somebody else controls them for you.
"For us, it is just simplifying all of this. You need to actually tell us when to close, and we need to make it happen. Not the other way around," Poleg said.
Working toward a seamless buying experience
Poleg envisions a more digital approach to some of the cumbersome aspects of the transaction. Maybe the title component is reduced to clicking a few boxes; financing can be simplified by allowing the lender to find the information they need, with the buyer's permission, instead of applicants collecting all the documents.
"I think when my children buy homes, they will be expecting a different kind of experience," Poleg said. "We are already doing this when buying online. Everything is easy, everything is seamless, everything is acceptable, you control everything. That does not exist in a real estate transaction."
Creating an all-in-one experience with the addition of the newly acquired lending and title companies will take time for Real; Poleg expects a somewhat finished product around the end of 2023.
Taking advantage of growth opportunities in a cooling market
The publicly traded company (REAX) is also busy growing, something that could be a challenge for any company in 2023. In 2022 Real was able to achieve growth by adding agents and market share, a strategy it is planning to continue. At the end of 2022, the brokerage had more than 7,000 agents in 45 states and three Canadian provinces — more than double the number of agents they had at the end of 2021, according to T3 Sixty's Real Estate Almanac.
"All other brokerages are in defense mode, so we want to grow market share," Poleg said. "In that sense, the [slowing] market worked in our favor just because all of the companies in our field are downsizing and we are continuing to grow, and that allowed us to attract great talent from other companies."
As part of the company's growth strategy, Real recently named Sharran Srivatsaa as president. In his newly created role, Srivatsaa will oversee growth areas including agent recruitment and education.
The company is also planning to invest more in its infrastructure. Real's 130 employees all work remotely, and the company is working to make that more efficient, Poleg said.
Banking on profitability next year
Of course, profits are important too, especially as a public company. According to its third-quarter earnings report, Real increased revenue 188% year-over-year to $111.6 million, but had a net operating loss of $4.3 million. Despite what's expected to be a challenging year, Poleg said the company's goal is to reach profitability in the second half of 2023.
Poleg is more bearish than many about the market in 2023, expecting price drops in the 7-12% range — steeper than what many in the industry are predicting.
"I think the market is correcting itself; it's a healthy process," Poleg said.
"If you look at the market long term, this is exactly what should happen. I think that right now you are seeing whose model is sustainable. There will be new winners and new losers coming out of this."