When the news broke about the acquisition of Remax by Real, I think a lot of people were surprised that Real was the acquirer. And today I spoke with Tamir Poleg, he's the CEO of the Real Brokerage. We talked all about the acquisition and we also dug into AI and the listing fragmentation and what the future might look like for agents and brokerages. So, enjoy the podcast. So, Tamir, lots of things happening with Real Brokerage right now. Welcome to Real Trending.
Thank you for having me. Yeah, exciting times.
Yeah, definitely. So, I think the acquisition of Remax really took a lot of people by surprise. They didn't know that Real was in the market to purchase other brokerages and you know, you're tech-forward, tech-enabled brokerage purchasing a legacy franchise model. So, why was this the right move right now?
Well, first of all, I'm happy that we managed to surprise people and hopefully we can continue to surprise. I think that, I mean, we've known Remax for a long time and it's the most iconic brand in the real estate industry and everybody knows Remax. And we started looking at Remax a few years ago and I think that at that point we realized that the two companies are very complimentary. Remax has this iconic brand, they're known everywhere. They have the scale and Real has the growth and Real has the technology. And when we started to try and analyze why Remax was kind of slowing down in North America, we realized that it's because of a tech gap, it's because of a value proposition that needed a little bit of a boost, it's because their franchisees, brokers, are struggling a bit with margins. And this is exactly what we thought we could help with. We built a tech platform that allows brokerages to be very efficient. We have the growth mindset. We've been enjoying great momentum, and we thought that just bringing that energy and that technology and the value proposition onto the RE/MAX side, we can really turn around that ship and make their franchises and agents just happier and just boost the value proposition. So, in terms of why we did it, it's because we thought that we can generate an outcome of a company that kind of covers both worlds. If you're an agent that seeks more freedom, flexibility, you're a little bit more tech-savvy, you want to work from anywhere, you can join under the Real model. If you're an agent that is looking for more of a brand name, office location, or office presence, you want your broker close to you, you can join under RE/MAX. But now we can offer both models under the same umbrella.
In terms of timing, as I said, we've been looking at RE/MAX for a few years, and sometimes you have to buy an asset or a company when it's for sale. And it was just now when they decided that it's the right time for them to engage. So, I'm happy we did it. I would have been happier if it was done before just because, you know, we could have spent time on building together, but super excited about what we're going to build.
Yeah, I can't wait to see, you know, as you move through the process, how it goes. And culturally, you're both very different in my mind. So, how do you bridge that gap culturally? And plus, they're franchises, so they don't automatically have to embrace the tech platform that you have because they're individually owned. So, how do you bridge that gap?
When I first met Eric, RE/MAX CEO, I think it was about a week after he started at Remax. And I think that the first thing we talked about is the similarities in the culture because both companies, both Real and Remax, focuses on helping agents succeed in real estate. Both companies are focused on productivity, agent productivity. Both companies are kind in nature. We're trying to disconnect ourselves from the politics in the industry. We're trying to focus on our businesses. So, there are a lot of similarities. I think that one thing that a lot of people are missing is the fact that we have such a deep understanding of their broker/franchisees businesses because we run a brokerage. We run a very large brokerage with 34,000 agents. So, we understand what their agents and franchisees are going through. Even though Remax is a franchise and Real is a brokerage, we understand what their clients are actually going through. And I think that helps us a lot in terms of culture. As you mentioned, we are going to operate two very different brands. There will be some overlap. There will be opportunities for agents to enjoy education which will be combined, lead referrals which we are going to combine between the two companies, technology that will be shared to some extent. But in essence, Remax stays Remax with their own culture. Real stays Real. I think that the cultures are very much aligned. But we are also going to be very mindful of the fact that they need to continue and operate as two different brands and agent communities.
Yeah, and you mentioned staying out of politics and I have noticed that you've been very quiet on private listings and this whole debate going on right now. So, what are your thoughts? Not whether you support private listings or not, but what is your focus moving forward knowing all of that is happening in the industry right now?
You know, I work for our agents at the end of the day. This is who I serve. This is who we chose to wake up every morning and build for. And the first thing we did when this whole private listing, private exclusive pre-marketing started to be a discussion, we just reached out to our agent population and asked them, is this meaningful to you? Do you want us to do something about it? And about 95% of our agents on the Real side said, you know, our clients are not even asking us about this. Like, this is not even a discussion. Out of the remaining 5%, 50% of them, so 2.5% said that their clients are somewhat interested in having a discussion about private listing. So, for us it was a clear indication that this is pretty much a lot of noise, at least for our agents, and we shouldn't try and do anything about it.
I do think that there's a status quo in real estate right now. And I think that every time you try to change something in a status quo, you have no ability to predict where it will end. And I bought properties in other countries, so I know what the experience could look like as a consumer, and I'm somewhat concerned that we will end up in a situation that we didn't want to be in. And that's my main concern. I think that by combining RE/MAX and Real and becoming the second largest brokerage, we have a seat at the table, we're able to move quickly, we have the tech development capabilities to move fast and react. But as of now, I'm not sure that the recent changes are serving anyone meaningfully, and by saying anyone, I mean agents and consumers, and those are the groups that I care about. And this is why we stayed quiet. We're observing, we're learning. But if and when the time comes to react, we will. And I think that we're just thinking about all this a little bit differently and we have some ideas in mind. Some of them are pretty groundbreaking, but we're not pushing the button yet.
Do you feel like we're moving toward more fragmentation in listing access, you know, as far as consumers finding different inventory? That seems to be happening more frequently now and with several different companies. Or do you feel like we'll find an even keel somewhere in that?
I think we're getting to the point of no return on this. And I think that very soon, and when I mean very soon, it could be in a matter of a few months, we'll be at a point where fragmentation is beyond our control. And we cannot get the genie back in the bottle. And you know, I bought a property in France, and in order to find a property, I had to go through so many different websites with so much false information or inaccurate or just outdated information. And it was just not a great experience, and I hope that we do not end up this way in the US and Canada. But I think that in terms of fragmentation and everything that's happening with the MLSs and the kind of the large forces that are pushing in different directions, and namely Compass, I think that it's becoming inevitable to find ourselves in a situation which could be less in favor of consumers' ability to find data, accurate data, in an easy way.
Yeah. Well, and AI actually plays a role in that because I do feel like a lot of the data conversations are around how much are you allowing, you know, do you have the infrastructure, the AI infrastructure to maintain accuracy of your own listing data or will AI come in and pull your information and use it in places that maybe you're not approving of. And I know that you're very tech-savvy on that so I may have this completely wrong but it's conversations I hear a lot. So tell me, what are your thoughts on that?
At the end of the day, AI should help create better experiences both for agents and for consumers. So AI is not just, you know, an entity or someone who operates completely independently, and we should be directing or building AI to just help with eliminating friction in real estate transactions or providing more transparency or shortening the time frames to either find a property or to close on a property. And that's how we think about AI generally. I think that we're far ahead of everybody else when it comes to AI capabilities but we are trying to put AI to work in a way that will eliminate friction, provide more transparency for our agents' clients, and just shortening the time frames in a real estate transaction. And you know, I would assume that AI will be used in different ways in the industry. I know that there will be folks from the outside who will be trying to use AI in order to eliminate agents or eliminate agents to some extent. AI is also a huge buzzword right now.
And at the end of the day, obviously AI is the future but you really need to be mindful of what AI means. And think that as long as AI is easily accessible, it's working for you, it does the right things, then it's welcome. At the same time, hopefully AI is not going to do anything negative to our industry.
We hope not. What do you think are some of the biggest kind of roadblocks or misconceptions that brokers have about AI? And what are some creative ways that you're actually looking at it and using it?
