I don’t really want to talk about it because I actually wouldn’t want to win that way because I think this industry needs a lot of the things that are in place for consumers. But if it goes a different way, I think we’re also well positioned.
John Campbell: Yes. I agree with you. And the last one here, we field some questions on this. I just wanted to see if we can clear the air on this, but we’ve had a couple questions about just sticking on the legal side, a case you’ve been named in personally. So, to what extent you can, maybe, if you can comment on that.
Glenn Sanford: Yes. I think there was — there definitely is a — there is a lawsuit that’s been out there. I know that there’s been a New York Times writer that’s been pursuing a lot of people for months on end. Still don’t even know what the story might be. But just in all transparency, we believe that we had two bad actors in our agent base. We have 89,000 agents, and that they had acted significantly inappropriate. And to the point where there likely could have, and who knows, may still be some jail time associated with it. We had let one of the agents go as soon as there was charges brought up against him. We let the other one go when there was some things that came to light through the civil suit. And we — but with 89,000 agents, there’s some bad actors.
Bottom line is, I don’t want to say we don’t tolerate, but we investigate any of these things. And if we find credible evidence that says that people are doing things that are on the wrong side of the law, then we do release agents regularly for various different reasons. So, we take these things seriously. But we also believe that we as a company have acted appropriately through this whole thing. But we do care deeply about agents and people in general. So, if there’s things that are happening that shouldn’t be happening and we can help fix it, then we’re going to get in there and fix it. But we do know that there’s the lawsuit. We know that there’s a article being written and we’re not sure if it’s just because it gets headlines and gets readership or if there’s some angle that we haven’t even thought about.
And hopefully, we get a chance to address it before it gets published if there is something that we need to address.
Denise Garcia: Our last question from our analyst Tom White at D.A. Davidson who couldn’t be on stage with us today, but he asked, you’ve launched a flurry of new initiatives over the past several months that appear to sweeten the economic value prop for agents to come to the eXp program. Can you talk about the impact that’s having on your domestic net agent additions? And what impact to margins can we expect from these various initiatives?
Glenn Sanford: So, we’re just in the early stages of these taking place. One of the things I noted earlier is that even before we announced Boost, we were doing some version of Boost with each brokerage that was converted over. We just hadn’t made it overt. So the economics really don’t change too much with converting brokerages. We’ve got Accelerate, which helps agents unlock their level 2 and level 3s earlier on in their career for the first year. However, as our revenue share system is designed to pay out 50% of company dollar regardless, so it’s just part of the revenue share system. The Company retains 50% of company dollar to pay its bills and ultimately, lead to us being able to show a profit and invest in things to help grow the brokerage, which also helps grow agents, revenue share organizations.
And then, the last program, Thrive, that’s probably the one that has a little bit more meat-on-the-bone for large agent teams. However, even with these large agent teams, we were still having to do some sort of special something to help them financially either pay for signs, get out of office leases or do something. And so, if you actually look at the numbers, these aren’t super — there’s not — I mean, there is definitely investment going into these things, but they shouldn’t fundamentally change our financials in a meaningful way. Jeff, would you agree? You’ve done more of the analysis.
Jeff Whiteside: Yes. I mean, I’d agree. And especially when we’re talking about that 50 — our rev share pool, so that doesn’t change the margins at all. And then, there’s — as you mentioned before, there’s a lot of these programs that we were doing informally before. So, we don’t expect, as we sit here today, any kind of material change in margins going forward. We do expect growth though, right, Leo?
Leo Pareja: Absolutely. I think the part that hasn’t been mentioned, but I’ll just point it out. The rough environment that’s affected everyone’s margins in compression and units and transactions can actually be a very interesting time for the smaller independent that’s in that tough range of 50 to almost 500 agents where the margins are so tight and they still have the less legacy brick-and-mortar systems. I mean, when Glenn alluded to it, I mean, we have ate a lot of interest in a very large pipeline, which I would say has grown disproportionately into the higher end, right? So as we can manage to convert much larger swaths of independence, that could give us some relief in the headwinds that we’re experiencing because 2024 from a transactional unit count, most economists are predicting very similar to 2023 as the interest rate environment is still tough.
So, the expectation of transaction counts similar to 2023 is there, in a way, gives us a pretty interesting advantage to continue to grow agent count. But as Glenn alluded, even if we were to stay flat, by focusing on the highly productive, we continue to gain market share. And if the wins shift back, which they always do, that’ll put us in stronger footing.
Denise Garcia: Great. Thank you. So, one question. We’ve gotten some questions from the audience on Slido, most of which we’ve answered, although this would be the last question here that we haven’t answered directly, which is, can you elaborate on the strategies that eXp Realty is going to capitalize on emerging global real estate and how technology will play a role in shaping the company?
Glenn Sanford: It’s hard to understand exactly. I mean, obviously one of the things we look at is that internationally real estate is super fragmented. I alluded to it earlier, and this is why we’re pretty excited about homehunter.global is that if we can help make the searching for a home easier for a consumer, then there’s a possibility that we can do other interesting things in terms of whether it be getting a mortgage internationally or any number of different things. Bottom line is everything is enabled today, and today’s economy is enabled by technology. So, it’s about what technology to adopt and when — for me and for the company we’ve been investing more and more on the AI front. And we’ve got now some enterprise accounts through OpenAI, which we are excited about.
And we are continuing to build out more and more infrastructure. We are starting to pump in big data. We are starting to use it with our NPS. We are looking at how can we make the right decisions in real time using technology, by watching what’s going on in real time. And so, I think at some level, we think that a brokerage becomes very algorithmic and managed by various parts of AI. Obviously, humans are involved in a lot of — all of this, but I see, all the things going on, I just turned myself into an avatar, and so I now have my own digital twin that we can now program and speak in multiple languages and be able to do — talk about the value prop in other countries and so — in my voice on top of all that. So all the things are coming down the pipe in terms of enabling technologies.
The thing we can’t do is pretend like, all the technology that we need to run this business exists today. I know another leader in the space said that, just recently that there is no need for agents to have new technology. And I have been a tech guy since I was 12 years old and I’ve heard that statement made time and time and time again. And anybody who truly believes that will go backwards, not forward. And so for us, it’s how do we continue to stay engaged in figuring out what’s going to give a consumer an edge, what’s going to give an agent an edge, what’s going to allow us to run more efficiently while providing a better experience for our agents and our consumers? And that’s the business right there. So, technology is front and center.
