After a number of acquisitive brokerages have been circling San Diego in recent months, some key activity exploded this week.
In addition to Compass’s announcement Wednesday of its San Diego expansion, virtual brokerage eXp Realty, which has launched in 47 states, strengthened its presence in the highly competitive Southern California housing market with the recruiting of three San Diego big hitters.
Broker-owner Kyle Whissel, whose independent firm Whissel Realty is the most productive brokerage in San Diego County according to Real Trends; and Dan Beer, leader of Keller Williams’ no. 1 team in Southern California by gross commission income, have both joined eXp, which just announced this week that its agent count has doubled over the course of eight months to 8,000 agents across the country.
After publication Inman learned that a third agent, 14-year real estate veteran and 10-year indie broker-owner Mary Maloney, founder of North San Diego boutique brokerage Hometown Realty, known for helping military families, is also joining eXp with her seven agents in a move that Maloney is calling “the trifecta.”
“The three of us got together to say, is this the solution for the pain points we’ve been experiencing in the business?” Maloney told Inman. “We all come from different places but this platform offers the three of us exactly what we are looking for.”
Beer, Whissel and Maloney will continue to operate separately with their teams from their current offices, but will now work more collegially in their markets and will spread the word of the eXp brand together.
Whissel comes to eXp from his own independent brokerage, Whissel Realty. He told Inman he has found success working independently — his brokerage’s 25 agents posted a sales volume of $204 million last year — leaving some to question his decision. His response: “Because this provides things to me and not just me, to the team that I can’t offer, that is, stock options to the team and long-term revenue sharing to the team.” EXp World Holdings, eXp Realty’s parent company, gives agents opportunities to earn company stock based on their production and recruitment of new agents to the company.
“Rather than accepting a one-time signing bonus like some companies are offering or a buy-out to a big brand that is gone in a few years, we joined eXp Realty because we believe that their cloud-based brokerage model is the future of our industry and we want to be a part of it,” Whissel added. “We also believe that the long-term opportunities they provide to our team via technology, stock options, and revenue share far outweigh the benefit of a short-term gain.”
Meanwhile, Beer’s team of 9 agents at Keller Williams achieved a sales volume of $164 million in 2017. “The way we see it, this is like having the opportunity of joining Keller Williams when it was 6,000 or 7,000 agents,” Beer said in explaining his decision. “It is a wide-open market in Southern California and across the country. We are hoping agents will join us and help build what will be the biggest real estate company in North America.” (Inman contacted Keller Williams for a request for comment but had not received a response by the time of this article’s publication.)
A big sway factor for Beer was when top producing Arizona team leader Curtis Johnson brought over his team of 22 to eXp from Revelation Real Estate just four weeks ago.
“He is a very senior business person I have long admired,” Beer told Inman. “That signaled for me we were on the cusp of something, at the beginning of serious, strong industry-leading agents joining the eXp platform and we knew we wanted to come in, too.”
Revelation Real Estate, on the opposite end of the virtual brokerage model, has invested $8 million into its elaborate 20,000 square foot office digs in Chandler, Arizona, southeast of Phoenix. Last March, Johnson told Inman about his choice to join Revelation being influenced by the impressive space, and his belief that “meeting in a beautiful office sets the tone.”
Speaking to Inman Friday, Johnson said he had been holding out until eXp got to a certain size to join, and when big industry player, Jay Kinder of Oklahoma, moved over he decided the time was right, “The revenue share side of it is insane and to be a part owner, to have people in your team have a retirement plan and ownership in the company, you could never pull that off (elsewhere),” Johnson told Inman.
EXp Realty COO Mary Frances Coleman told Inman that eXp is onboarding new agents at a rate of 80 to 100 a day. “We are just a different model,” Coleman said. “I believe the traditional real estate model is antiquated and does not work. We’ve recognized that the industry has changed and given agents the opportunity to run the business in a scaled model, with support and services. We also give them the opportunity to plan for their future, to own shares in the company in a way that no other company offers.”
“This is a year of change,” Beer told Inman. “Not just with eXp but for the whole industry. I believe this a year when you will look back in the fourth quarter of 2018 and it’s going to be a year that looked like the entire real estate industry was tossed up in the air and ended up in a different place.”
“One of the biggest benefits for me is having the ability for us to spread across the country with the veterans brand to expand quickly under their platform,” added Maloney. “If I wanted to open an office in Jacksonville, North Carolina, where the Camp Lejeune Marine Corps camp is, I would have to go get licensed and brokered. Now, with eXp, there is a broker in North Carolina. I just need to plug into that broker in North Carolina and be serving Camp Lejune in no time.”
On top of eXp’s hires, on Wednesday deep-pocketed Compass announced it was opening a new office in San Diego, snatching up boutique firm P.S. Platinum and bringing on local agents in the area, including Candis Kolb, Kelly Howard, Mark and Pete Casperson, and Anne Schreiber (all formerly of Coldwell Banker). Thursday, the brokerage told Inman that north San Diego county high-flyer Patrick Marelly is also jumping ship to Compass from Realty One Group.
Inman spoke to Jamie Duran, president of Orange County, Riverside County and San Diego with Coldwell Banker about the defections. With 940 agents in San Diego, having lost these five agents, Duran said Coldwell Banker would “be OK.”
“But our door is open, we don’t fault them for having a moment of ‘unclarity,'” she said. Coldwell Banker brought on over 280 agents last year in San Diego, said Duran.
It’s no secret that California real estate is on fire; prices are sky-high and competition among brokerages looking to grab a bigger slice is fierce. As this high-stakes game of musical chairs unfolds in San Diego, the acquisition battles over market share and talent in Los Angeles continues among big brokerage players like Pacific Union and Douglas Elliman.
“You have around 22,000 agents fighting over currently 4,745 listings and an incredibly sophisticated and savvy consumer,” Beer said of the San Diego market. “It’s very tough — realistically, home listings could almost double before it was a balanced market inventory, he added.
Editor’s note: This story has been updated with information about Mary Maloney’s move to eXp.