This works. Okay, that's it. Well, first of all, I wanted to thank you. Yesterday, I got to meet many of you and the welcome was so warm. I just felt at home and I want to thank you for making me and my team feel at home. As Eric said, we're still fierce competitors, but it doesn't feel this way. It feels like there's a very special energy here, and I wanted to thank you for the welcome. I'm very honored to be on stage today. So, thank you for that.
I wanted to tell you a little bit about myself and my journey and Real's journey because very soon those journeys will merge, and I'll talk about all of the aspects or as much as I can share at the moment. 12 years ago, 2014—or maybe I'll go back in time. I started my career in real estate almost 30 years ago as a construction worker. I've been in tech and real estate for about 30 years. I've done property management, I've done construction, I sold a lot of properties, I did multi-family investments. I know real estate very well.
In 2014, I had this crazy idea, the same idea that you had years ago, of starting a brokerage. And I didn't know much about the brokerage business. Obviously, I worked with a lot of agents and I knew real estate very well, but I just wanted to create a place that always thinks about ways to make agents' lives better. So, we started the company. A few months later, I needed an office because we had four employees and we didn't have much money, so we rented an office. I didn't have money for the painter, so I bought some paint and over the weekend I went and painted the office. And on top of the door, I put a sign. And the sign said, "Always find ways to make agents' lives better." Because I wanted the four employees every morning when they step into the office to understand what we're here to do.
And that North Star has not changed from day one. A lot of companies pivot, they change, they decide that it's the end of the road for them. But for us, it was always about making agents' lives better. And as we think about value and as we think about building stuff for agents, we always think about that simple mantra, which I'm sure is guiding you as well in your businesses. And that's probably the reason why you got into this business. By the way, as an anecdote, last year I was looking at the profitability metrics of different industries. I asked ChatGPT actually. So, I was looking at hotels, restaurants, construction, and brokerage. And all of those industries are kind of hovering around 5 to 7 or 8% profitability. Restaurants are actually improving in profitability over time. Brokerage was the only business that is declining. So, I think that if my son came to me today and said, "Hey Dad, I want to start a brokerage," I would say, "No, go start a restaurant." But that's a whole different discussion.
What I'm trying to say is that idea 12 years ago came to be a company, a brokerage that is operating in all 50 states, and in five provinces in Canada. We have over 36,000 agents. At the beginning, I was doing everything. I was doing the ads to try and attract agents. I was doing support. I was doing the marketing. I was doing a little bit of the compliance. And then we hired the first agent, three agents, five. We opened up another state and another state. And in 2020, everything started happening very quickly for us. But the reason why I'm telling you this is not for you to think that I'm great, because I'm not that great. It's just because I want you to understand that I and we know your business. We know how to operate a brokerage.
We know how difficult it is sometimes to deal with agents. We understand compliance, we understand efficiency, we understand operations. After this day, I still feel the heartburn when an agent leaves, and I know that you do, too. I just cannot live with it. I don't understand why an agent will ever leave such a great brokerage. But that's the reality of our business: agents leave. And I think that it's important to have a leadership that is actually doing the same things as you, going through the same things as you, and understands what you're going through. And it doesn't matter if you have five agents or you have 2,000 agents; it's the same struggles, just a different scale.
So, I want you to know that you have a partner that understands why you started your businesses and what's happening in your businesses every day. And it doesn't matter if the market is good or bad. We've been there. We've been there in 2020 and 2022 when the market was amazing, and we've been there since 2023 when, at least in the US and Canada, the market is not going too well. But in a couple of weeks, there will be a new chapter that begins for RE/MAX. And you all built the most amazing real estate brand in the world.
And we will be very careful not to take away anything from that brand and from everything that you built. We want to enhance it. We want the next chapter to be about growth. We want to bring more opportunities. We want to bring more efficiency. We want to reintegrate the brand. We want to be there and help you grow your businesses. We want to improve your profitability. We want the next chapter to be faster, to be a little bit different, to position RE/MAX to be even more attractive in the marketplace because the competition is fierce. I am still a competitor and I will tell you that some competitors are not as fierce as Real is.
So, excited about the next chapter, but I'm here today to tell you that we are committed to helping you grow. And I'll tell you exactly how we're going to protect your businesses. But for me, growth solves a lot of things. When the business is growing, you pay less attention to the expenses, the costs. You just run fast. And I want us to run fast. I want us to make decisions very quickly. I want us to roll out things very quickly. I want us to be nimble. I want us to be efficient. I want us to be present. I want you to be able to reach out to me at any time of the day and get a response within a few minutes or a couple of hours if I'm on Zoom calls, but that's the way we've built Real. We've built Real in partnership with our agents and this is what we need to do here as well.
When we looked at RE/MAX, and again, this transaction was in the works for years—I'll tell you a secret. In February of 2021, I sent a text. Real had 1,500 agents back then. Real had 1,500; RE/MAX had 160,000. I sent a stupid text to one of my board members and I told him—I can show you the text—"You might think I'm crazy, but I think we should buy RE/MAX." And he said, "I don't think you're crazy, but let's discuss." And he picked up the phone and he called me and I told him the reasons, which I'm not sure are the same reasons that we have today. And he said, "Okay, but we need money and we're a tiny company."
So, I set up a meeting with a hedge fund for the following week and I sat there in their meeting room and I told them about this amazing idea of joining forces with the most amazing real estate brand in the world. And they just looked at me as if I was crazy and I walked out and I said, "Okay, they don't get it. I get it." And I probably need a few more years to make it happen. And it was in 2021. As Eric said, we first met about two and a half years ago, a little bit more than that. And one of the things that we tried to understand is why is RE/MAX growing so well in the rest of the world and in Canada and not in the US? And we came down to two things: value proposition that needs to be stronger, and broker-owner profitability.
I don't know if you know, but in the past three years, during the most difficult real estate market in over 30 years, Real was able to increase pricing three times. While everybody else is struggling, while everybody else is cutting prices, we actually increased our fees to our agents. We increased the joining fee, the annual fee, the transaction fee. We actually increased the cap in Canada from $12,000 to $15,000. And you might be asking yourself, how is this possible that a company can actually increase fees when the market is so tough, when agents are struggling? Why are people willing to continue and pay? And why is this company continuing to grow? And the answer is the value proposition.
We continue to deliver more. We continue to develop. We continue to bring them new tools, and those tools are making a difference. And we want to take everything that is working on the Real side, all of that technology, all of that value proposition, and put it in your hands so you can go out and attract agents and grow your offices. For me, growth is not about selling more franchises. Growth is about helping you attract more to your offices. And this is one thing that is going to change.
The second thing is margins. As I'm going back to the charts that ChatGPT produced, we are in a low-margin business, and it's getting tougher and tougher. And if it wasn't Real, there would be another company that would be offering more competitive economics for agents. But at the end of the day, it's possible to operate and make profit even in this industry. And what we've built on our side is an operating system for a brokerage like no other. We operate with one full-time employee for every 90 agents. We are extremely efficient. We automated the entire transaction management and transaction and payment processing. We have very few employees compared to other brokerages that size.
And if you're interested, we're willing to give you those systems so that you can operate your business more efficiently, so that you can cut costs on third-party vendors, so that you could have fewer employees and you can improve your margins. So two simple things: stronger value proposition and helping you improve your margins. Peter will be on stage after me; he will be demoing some of the technology. But this is a tech stack that was built over many years. It's processing over 200,000 transactions annually. It's supporting 36,000 agents, so it's working. It's working in the US and it's working in Canada.
But first and foremost, we need to be protecting your business. We did not make this acquisition to change anything in the model. Real has something good going for it and Real will continue to grow. We don't want to jeopardize that. We want to grow RE/MAX. We want to grow RE/MAX as a separate brand, and we want to make sure that you grow your agent count.
A few years ago—I think it was three years ago—we have our annual event called RISE, where a lot of agents are participating. And three years ago, if you remember, the whole NAR lawsuits were kind of top of mind for everyone. And a lot of agents were bashing each other in different brokerages, and I came up with the stupid idea of inviting the CEOs of the top 10 brokerages to RISE, to our annual event, to our living room, to the most intimate setting with our agents. And I sent an email to Robert Reffkin and Gary Keller. I think it was Nick Bailey at RE/MAX back then; I don't remember. So, top 10 brokerages, and told them, "I want to invite you to be on stage at RISE in front of our agents because I want our agents to see that if we're able to have a conversation and talk about collaboration, then maybe that will propagate into the market and agents will respect each other more."
Our marketing teams thought that this was super stupid because you're not bringing your competitor on stage to talk to your agents. And by the way, the only person who replied was Gary Keller, and his reply was, "No, thanks." Everybody else just ignored me. I think that they're not going to ignore us anymore, by the way.
But what I'm trying to say is that if you're confident about your value proposition, you shouldn't be afraid of competition. You should not be afraid of your agents talking to other brokerages. The reality of this business is that agents wake up in the morning and they make the decision of staying with you, and they have choices, and they're seeing what others are offering as well. But they choose to be with you. And if they leave you, you have to work harder. And if they leave you, something is probably missing. And we have a lot of agents leaving Real, and every day I'm thinking, how can we become better? What we don't want to see is agents moving from RE/MAX to Real. By the way, I don't mind seeing agents moving from Real to RE/MAX.
And as many of you know, Real agents are incentivized to attract other agents through revenue share, so there is a financial incentive there. As we're thinking about protecting your businesses, we're going to do the following: if someone moves from RE/MAX to Real, a Real agent is not going to receive revenue share for that agent. But that's not all. If something like this does happen, we acknowledge the fact that that agent was with you, and you attracted them to the group, you maybe helped them succeed, you taught them everything that they know. So, if they do end up moving from RE/MAX to Real for some reason, revenue share is going to be paid to you through the brokerage. So, we want to thank you for enjoying the economics of that agent.
And I know that there was an elephant in the room. Hopefully, that elephant is now gone. I will be very vocal about it, and if you ever encounter a situation where somebody from Real is trying to attract your agents, just let me know. I don't think that that will happen because there's no reason for them to try and do that starting when we close. But if it does happen, just let me know, and I'll take care of that. So, hopefully that's good.
Lastly, Eric talked about the importance of people. And as you know, businesses don't build themselves. Businesses are built by humans, by people. And what I learned in this industry is the importance of partnership. It's the importance of partnership between agents and us. You probably feel the same in your offices. And if I have one ask from you today—and you will be hearing a lot from me over the next few weeks and months—I'm asking you to be our partners. I want to be your partner. I want to help you grow. I want our interests to be aligned. But we need you to give us a chance. So, I'm asking for that chance to become your partner. And hopefully we can prove that we're the best partners that you can ask for.
On that note, I want to invite here some of our leadership team, which I think is the best in the industry. Systems are amazing, technology is amazing, but at the end of the day, you need people to operate the business. You need people to truly care. And I remember that when I was doing the support calls 10 or 12 years ago, I could not go to sleep at night knowing that there's an agent who's waiting for a check. And I would do anything to make sure that that agent gets paid same day. Even though it was super late and I could say, "Okay, this can wait until tomorrow," this team doesn't wait for tomorrow. And I'm super proud and super honored to be partnering with them. So, come on stage and let's introduce everyone. Yes, you.
Everybody knows Abby. Abby is the CEO of One Million Mortgages. Pete Nash, our amazing Chief Technology Officer. Jenna is going to become the president of the new RE/MAX Group. Alex, our Chief Technology Officer. Bobby, finance guy, our CFO. And everybody knows Amy. So, super proud to introduce the team. There are a few more, and looking forward to building RE/MAX together and taking it into the future. Thank you very much.
