Leo Pareja and James Dwiggins unpack the the fight for real estate’s future

Thank you Tracy. I appreciate it.

I think the answer would probably be unique to each strategy that you're seeing. In January I said something that's been trending quite a bit which I said if you look at American history when industries start to consolidate they tend to not stop and so consolidation begets consolidation and industries that for decades were fragmented all of a sudden become consolidated. And the example I used on stage that's been repeated quite a bit is we're having our airline moment. So we all grew up in this country with lots more airlines than we do today, lots more health insurance companies than we have today. But it's not like this moment in time, like in the late 1800s during the Gilded Age there was like 180 railroad companies and then there was four. So normally when something is new and innovative it tends to proliferate and then when it gets stabilized or scaled it tends to consolidate. So the catalyst probably started when Stone Point bought KW. I think everyone says it's when Compass bought Anywhere, but it probably started with Stone Point entering the space. It was a signal that there was a consolidation moment coming.

And so, a couple of things that are in play that I want to point out for people to appreciate is one is we now have national platforms. I would argue that we were the first in 2009 with eXp, but Compass started right after us in 2010. Before that, all you had was national brands that were strictly franchises. You add high-speed internet and the ability to create content and distribution virtually, right? We don't have to physically be together anymore. The world is moving in a much different place. So, what is the motivation and catalyst I would say? And then you add a downturn in the industry itself. Like if you look historically that's actually probably the biggest pressure on consolidation, right? A bunch of people are struggling, one or two are actually thriving and they take advantage of the moment in time. For us when we looked at it we are statistically the leader in our category of cloud but I'm hyper aware that at 4% of the total market if we absolutely crush it and get to 10%, that's 90% won't be with us and a vast majority of the industry still sits in the franchise and or independent small mid-size camp. And so for us, we were looking for a platform that was synergistic and complimentary that didn't cannibalize our business. So for example, Next Home, we recruited a total of 28 agents in 2025 away from them, right? So there was almost zero overlap. And what got us excited was we were more aligned philosophically as leadership teams. There was an infinite amount of respect. We'd make a statement and say it looked like we already had one marketing team. And we didn't, just so we're clear. But it was pretty interesting when agents of Next Home would cheer me on or eXp agents would cheer James on, right? So there was no one upset when we announced it, right? It was like, 'Hey, he's on our team now.' And same with the Next Home agent. It just felt very natural and it was born out of mutual admiration and respect. So what I, and again this is my opinion, we're witnessing a bunch of financial arbitrage trades, right? Lots of words like synergy. Synergy is a fancy word for cutting costs and firing people, right? And so I think a lot of these scale plays are just driving unit economics versus for us it was like, hey, we look at the world the same way. We look at consumers the same way. We look at the agent value proposition the same way. And so that's what really drove us there. Again, scale begets scale, gives opportunities with listing distribution. Like we kicked it off by saying there's a new headline. We were in half of them this week. But like Next Home could not have done the Google deal that we did purely just because they didn't have enough scale to do it. But now that we're together, we went from 72,000 active listings to 80,000 active listings. So we just got more ability to do that. And again, like Zillow going dark and both eXp and Next Home listings were the first ones live because we put that in place and we have the technical ability to do that. So I'll pause right there. I don't want to monopolize the conversation there.

Yeah, fantastic question. One I'm very comfortable talking about. First of all, I have a very global perspective. So we operate in 27 countries outside of the US and Canada that have no MLSs and I will very directly and controversially pick a fight with Rightmove in the UK. They're an actual monopoly, right? They charge us 80 pounds a month per active listing on 800 agents. I think I paid him 2 million pounds last year. Like an absurd amount on a P&L, but there is actually no choice, right? So I think what makes North American real estate wonderful is we have MLSs and we also syndicate data to actual competitors that fiercely compete for those positions. Creating more distribution of our sellers' listings is better. And like, fight me on that one. Like I'll stand on that one. There is zero explanation that someone can walk me to. I want to prove the model here in the US and take Google with me to Europe. Like that's what I want to do because those are actual monopolies that you can't penetrate. But if you can find an entry point in the search bar, that's an interesting conversation. And by the way, marketers ruin everything. That's probably one of my go-to sayings on stages when I'm with agents. So there should always be a pushing of the boundaries and finding a new medium to get in front of people. The fact that we are the ones sending the data via my state and the relationship with House Canary that actually puts me in control to take it away if they go back on their word or we don't like the position they take. Right? And so it was very clear to me that they wanted to have a different revenue opportunity direct to the agent, right? So agents can buy impressions at the small business ad group at Google, which actually gives everyone a shot and gives the little guy a way to fight. So I would love to hear a logical, non-emotional explanation of how that is not a positive for the sellers. Isn't our job supposed to be about putting the seller's interest forward? I mean, I've seen like in all of this debate, sorry to jump in here, but in all this debate going on, I'm like going, did we forget who we actually work for in this process? That the whole point of our job is to help a seller sell their home for the highest price possible, least amount of time, 99% of the time, and that really there's only a 1% use case where these things need to be hidden behind walled gardens. So, I just, I'm with Leo. I can't understand why we wouldn't want to do that. And by the way, if Google causes everyone else to reset and think about the fact that there's other avenues and other opportunities that causes the industry to change or grow, I'm all for it. But I can tell you this, Leo and I sat in front of the largest Next office this week and showed them what was going on. And they're cheering because they're like, 'Yes, because I want to show our seller what we do and the benefit that we have.' So, I mean, I'm 100% aligned on giving as much transparency and by the way, giving the buyer the ability to find stuff without having to go through secret handshakes and walled gardens.

Yeah, the worst possible scenario, which I've been ranting about for two years on anyone who will give me a microphone, is starting to play out. So, we sell properties all over Europe. I've told this story before, but it's very specific. An agent came up to me at an event in France who was an agent in Southern California for us. She decided she wants to spend the latter part of her career selling properties in the south of France. I highly recommend it. But she came up to me and she goes, 'Leo, let me just tell you how horrible it is to sell real estate here. I have to go to eight different portals like Leboncoin and all the other ones and then I have to go to Remax and KW and eXp and that may get me 60% of the inventory and then I have to call the local offices around the area the client is curious about. They may or may not call me back.' She said it feels like a hundred years compared to what we have in the US. Yeah, let's just like, and again the Zillow situation is just one. So technically in Chicago again, homes.com, Realtor, Redfin, eXp.com, Compass.com, KW.com, Remax.com still all have it. Still all have it. But what if some of these MLSs go no more IDX, only VOW? What if you do internet on and off, which by the way I know of like 14 MLSs that have made a rule change in the last 12 months that actually have a button that says internet on and off, right? So it exists in the shared database but it is not being syndicated anywhere. Tell me how that does not end looking like Europe. And so that is what keeps me up at night and again it keeps me up at night more from like a sadness because the system we have is better for the consumer and I think makes our market more liquid, but actually keeps me up at night from the where do the comps go? How do we have actual data? I've asked my European agents. I'm like, 'Hey, how do you price an olive farm in Tuscany?' And she went, 'Right, like we kind of just try it out and see what happens versus like, hey, empirical data with these six comps and these adjustments, I can be within like three to five percent.' Right. So it goes pretty bad pretty quick if we just let the whole system burn down.

Yeah. Yeah.

So one of the reasons I did it, and again this is not Google's shared strategy, this is my assumption so let me just clarify that. I think that we're at an interesting crossroads because for all the stuff that keeps me up at night and James and I just talked about, there is a black swan event which is that LLMs really get to understand every nook and cranny of any listing available and you know they'll be good enough in 24 months where you can say show me every property even behind pay walls and walled gardens and by the way as a consumer here's my email and password, log in, create an account anywhere you want and we can syndicate it. But if, and again that's not my argument, I've heard it by various thought leaders as you called us earlier, say that that's likely to happen. If that's the case, I would argue that the probably most prolific and one of the winners of the LLM race will be Gemini, right? Google just made an announcement May 26 they're going to move to almost a full AI search experience. If that's true, and by the way, this is part of the thing about leadership. It's like what's most probable in the future? What's most directionally accurate in the future and how do we future proof? It doesn't mean like we're abandoning other strategies but like what puts us in pole position if that statement is true? Wouldn't it be good to give the world's biggest LLM all of our properties that are actively available for sale in real time? It kind of feels like a good idea to me.

Leo, you want to drive first? Yeah. I mean I'm kind of in a mood today. So I feel like we've experienced an abdication of leadership and you've seen not just me, not just James, other leaders go, 'Okay, fine. You guys aren't minding the store. We are.' And so, you know, that really was a kickoff after the settlement and leaving a bunch of us out. And it's like, okay, we're gonna make our own forms and we're gonna make rules. And people like, you're not allowed to do that. I'm like, why not? I'm the one liable. And so there has been a progressive, probably louder decision tree by the companies that are scaled. And by the way, if we also get bigger and more scaled, you'll probably see a faster loop of that continue to happen.

Yeah. Well, it goes back to what is the fiduciary responsibility? Like, did you sit down with a seller and say I'm going to get you the most amount of money in the least amount of time for X, you know, flat fee, percent, whatever you agree to. I don't remember you saying, 'Hey, I also need to control this and monetize this and do what I think is best with it.' Like the fiduciary responsibility is to put in as many eyeballs as possible. So, I mean I do have strong opinions of like if the MLSs are monetizing it or the parent companies that own the MLS systems, right? So, like again I said I'm spicy today. Let's talk about that. Right? So, but at the end of the day like the first question should be how do we make sure in the shortest amount of time it's syndicated to everywhere where the consumer eyeballs are. So I think that question needs to be kind of broken out. It's like wait what subject are we on? Look the first one is the consumer and that should be the first one. From there there probably is some, I think a lot of folks have kind of lost sight of who their stakeholder is. Right, agents need to remember their stakeholder is the client but I think MLSs have forgotten that us brokers and agents are the stakeholders and not their existence for the sake of existence. James said it very directly. I'll double down. Like a lot of these people aren't qualified to do what they're doing. And I feel like the decisions they're making are to protect the little fiefdoms they've built.

Yeah, I mean I think that's a broader question, Tracy, because in general that's a pretty hotly debated topic amongst training sets and who owns what and how you give attribution. So I do think that there's so much we don't know what we don't know and you know again at the macro level that's probably one of the bigger issues in general with the subject of AI of like ownership and copyrights that will probably end up getting legislated. So, I don't know how you stop it because once a property's on the internet like it's very common that, you know, in my background I built MLS technology. There are scrape farms overseas that literally index every single property in real time and then there's a gray market for it, right? You can't display it with origin source and like there's been many cases where a tech company comes into real estate trying to do something and very quickly finds out there's copyrights when they create a public-facing anything and people go wait you don't have the rights to that and that website goes down like 24 hours later. So the truth is we have seen that the industry is organized enough and you know there's watermarks and proof of copyrights in a lot of this stuff from an origin source standpoint. So you know it's almost whack-a-mole with any new technology something pops up and then we find a way to protect its ownership. I don't spend too much time worrying about it. It kind of is what it is at the end of the day. If you first concentrate on okay, what is best for the consumer? Let's make sure that their property is being exposed to as many buyers as possible. So, it's actually, you know, best of both possible worlds. And then, you know, down the road as we see those use cases, there's typically some form of making sure that that is being able to be protected.

I'll go first because I just had this conversation with a bunch of folks. So, the entire media cycle is compressing and especially with social and like the 10-second attention spans we all have now. It's like attention spans are an inch. All media has become clickbait. Like just about every form of communication, even watching agents make content, it's like it's clickbait-ish from the hook standpoint. But in a hyper AI tech focused world, I think the human is going to be at a premium. I fundamentally believe over the next three to five years, the people that thrive most in business are humans. And I just did this call earlier with a bunch of agents and they asked me the same question. I said I would obsess with relationships and value. And everything else is noise. So a broker owner, are you in direct relationship with your 20 or 30 or 40 agents? Do you know what their business is like? Do you know how they're doing? Do you know how their families are doing? What things are you doing right now to show people that you care, that you're still in relationship with them? Like at our scale I invite our top solo team leaders and attractors in person every 90 days and I spend the day with them and you see a lot of pictures on social about it but like I actually told them I said what are you doing in your business that is a replication of what I'm doing? Like you are my most important avatars, you're my most visible people and you're a force multiplier. So like if I have a message to disseminate, then you guys can carry that message downstream to the whole organization. But like I would ask an agent who's worried about Zillow and, really have you talked to your past customers in the last 6 months? And like something as obvious as, and you can leverage the moment in the chaos, just say, 'Hey, Tracy, I was reaching out to you because we haven't talked in about 18 months, and with all the headlines going on right now. I just wanted you to know that I'm here to talk through any questions you have about the current real estate market' and make it an open invitation for a conversation that's about what's important to them, right? Don't make assumptions. Like someone could be like, 'Oh my god, thank you. You text me. I don't know what to think about interest rates, inventory.' Fill in the blank. And then also then the second part of that is value and value is defined as how you view your business and the value you deliver to the transaction and become an expert in that niche.

Thank you. Very excited.