hen Matt Widdows founded HomeSmart in 2000, there were just two agents, a receptionist, and the dream of a new real estate brokerage model with low agent fees and efficient technology to drive what he calls “incredible customer service.” Today, HomeSmart is an international franchising company that continues to experience hyper-growth.
In the early ’70s, most brokerage models were traditional, charging agents high-split commissions. Suddenly, a new breed of real estate brokerage came along—the 100 percent commission model. As with anything new, the old guard promptly referred to the new model as “low service, discount brokerages” and attempted to discredit the evolution while diminishing the value that these companies offered their agents. Fast forward to 2000 when HomeSmart emerges with its new disruptive model. And, just like in the ’70s, there was no shortage of naysayers trying to stop the progression of the industry and HomeSmart. But this time it’s different, and the industry as we know it is at stake. ‘The Traditional Model Is Dying— They Just Don’t Know It Yet’ What didn’t exist in the ’70s is the likes of Zillow, the proliferation of data available to buyers and sellers, and a more tech-savvy, informed consumer. This is putting more pressure on both the agent and brokerage to change. Brokers have to prove their value more than ever before, which includes finding ways to reduce fees to the agent. So, how does that translate to the death of the traditional brokerage model? “Most traditional brokers have come to rely on high agent fees from
question the level of service and value they receive for those high fees, and that’s why we believe the traditional model is dying—they just don’t know it yet.” Meanwhile, HomeSmart’s top agent across the company last year grossed more than $1 million in GCI while paying the company just over $12,000 in brokerage/ franchise fees. It’s examples like this that are resulting in many topproducing agents making the move to HomeSmart.
heavy commission revenue to ensure operational success,” says Widdows, HomeSmart’s chief executive officer. “The high fees they charge their agents are causing agents to
Numbers that Back the Model HomeSmart International:
82015 REALTOR® Magazine Franchising List
82015 Entrepreneur Top Low Cost Franchises List 82015 Entrepreneur Franchise 500 List #376 (4th highest ranked real estate franchise)
82015 Inc. 5000 #2986 (a three-year growth of 120 percent)
8Net positive franchisor growth in agent count and office count since franchising began
889 percent of all inbound calls are answered without going to voicemail
Recent HomeSmart Franchisee Accomplishments:
A snapshot of milestones hit by some of the company’s franchisees.
8(HomeSmart Phoenix) 2015 RISMedia Power Broker Report – Sales Volume No. 15, Transaction Sides No. 12 8(HomeSmart Phoenix) 2015 Phoenix Business Journal Book of Lists No. 1 Residential Real Estate Brokerage 8(HomeSmart Phoenix) 2015 Phoenix Business Journal Book of Lists No. 1 Residential Real Estate Agent (Bobby Lieb) 8(HomeSmart Evergreen Realty in Irvine, Calif.) 2015 RISMedia Power Broker Report – Sales Volume No. 168, Transaction Sides No. 353 8(HomeSmart Professionals Real Estate in Providence, R.I.) – Year-over-year growth of more than 100 agents 8(HomeSmart Advisors in Spokane, Wash.) 2015 Inc. 5000 No. 279, three year growth of 1661 percent 8(HomeSmart Professionals in Palm Springs, Calif.) Year-over-year growth of more than 25 percent
RISMedia’s REAL ESTATE November 2015 59