Real estate company Exp World Holdings has just hired executive Cláudio Hermolin to lead the multinational company’s operations in Brazil, as it seeks to grow in a competitive market. Hermolin is an experienced brand in the industry. During the restructuring and digital transformation of the company’s business, he worked for four years at a Brazilian brokerage, one of the largest real estate companies in the country. In addition to being a member of associations such as Ademi, Sinduscon and Secovi, he has also been a director of Even and PDG.
All this experience will be used to provide traction for the Exp, which arrived in Brazil in early 2021 but has yet to take off. During this time, the company was led by Ernani Assis, another experienced executive in the field, having held positions at Prudential Real Estate, Century 21, Remax and Zap Imóveis. Under his leadership, Exp has 200 partner brokers and a total of 1,000 properties registered on the base – a very small number compared to the group’s presence in other countries and the potential of the Brazilian market.
Exp has gained global popularity as its offices are located in the Metaverse. That is: it does not use physical addresses. Staff meetings, classes, trainings and events take place in digital and online offices, where everyone interacts via avatars.interviewed broadcastis even granted in the metaverse (Videos with this experience are available on broadcast TV).
According to the company, the 100% digital format is its biggest growth asset. Since it doesn’t rely on brick-and-mortar offices, it can scale quickly, attracting brokers and real estate from anywhere. “If you look at Exp’s historical growth in other countries, you’ll see that it’s growing by more than double digits per year in terms of brokers and real estate transactions,” Hermolin emphasized. “Because we have no material needs, our ability to grow is limitless.”
The company has 80,000 brokers in 21 countries
Exp reached 80,000 brokers at the end of the first quarter, up 55% from the same period last year. Real estate sales were $41.4 billion, up 9%. Revenue was $4.2 billion and profit was $81 million.
Founded in 2009, the company operates in 21 countries, including the United States, Canada, Mexico, Colombia, Chile, South Africa, India, Hong Kong and European countries. In Brazil, it operates in 10 states. The global capillary phenomenon allows real estate agents to sell Florida condos to Brazilian clients, or Bahia coast houses to interested parties in Europe.
Another bet is to pay the heaviest commission to the broker. As with any other transaction, brokerage fees are around 5% to 6% of the property’s value. Hermolin highlighted that at Exp, brokers get 70 to 90 percent of this amount, compared to around 50 percent for traditional firms. Real estate agents agree to keep a smaller share of the sale because it reduces fixed costs.
It is also possible to pay in the form of company shares. With this, the broker becomes a real partner of the platform. In exchange for clients, real estate, training and connections, Exp charges brokers a monthly fee of R$250. “Our focus is to attract agents who think differently. We value professionals who seek autonomy, freedom and entrepreneurship. At Exp, it’s like having your own real estate agency,” the executive said.
Company shares under pressure on Nasdaq
But it’s not easy to stand out in the real estate buying and selling market, as the industry is huge and extremely fragmented across the country. There are large companies operating in multiple cities such as Lopez, as well as classified sites offering brokerage, guarantee, financing and insurance services, such as OLX (acquired Zap) and the case of unicorns QuintoAndar and Loft. Not to mention the numerous neighborhood real estate agencies.
“Brazil has continental proportions and room for more than one mode of work,” said the new commander of local operations. “And Exp is the third model. Although QuintoAndar and Loft have the tools to accelerate their sales, they are still companies with a physical space. Our model is 100% in the cloud and is more focused on brokers interested in going their own way, ‘ he added.
Externally, Exp has come under intense investor scrutiny. Its shares on the Nasdaq fell 60% in a year (to $15, giving it a market cap of $2.2 billion). The company has been hit by a storm due to the U.S. economic crisis and growing mistrust of tech companies. Meanwhile, other Nasdaq-listed real estate companies have also been hit. Zillow Group shares fell 81% over the same period, while Compass and Realogy fell 64% and 40%, respectively.
This article was posted on radio on 6/13/22 at 10:55AM
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