WORDS: Mark Pettipher
Hot on the heels of the Africa Leadership Tour, hosted by eXp South Africa which was held in Cape Town at the end of November, Neighbourhood chatted to Chief Growth Officer, eXp Realty, Michael Valdes about eXp and the one-day event.
Michael Valdes is a man who has a vast knowledge of the real estate industry. His personal journey took him from being a private banker for the Deutsche Bank where he was a director for ten years based in New York and San Francisco.
Being born and raised in New York, he had a home in East Hampton and realised during the peak and holiday times it could take as much as four hours to travel the only road in and out of East Hampton. Valdes also realised that it oftentimes was quicker to jump on a plane to Miami than to travel to the Hamptons. This realisation catalysed Valdes to start buying property in Florida, and after looking at his Profit and Loss accounts he saw that the largest cost was the commission element of the transactions. He decided to get his real estate licence.
Says Valdes: “Being a realtor and developing my own portfolio, I had free time on my hands. I was also doing some philanthropic contributions in Miami, when the society columnist for The Miami Herald, her name was Daisy Olivera, told me that I should meet the owner of the Sotheby’s franchise in Miami. This was in 2004, I met the owner, we had lunch and during the lunch he offered me the opportunity to run his franchise.
“Fast forward, we actually got along really well. I said I’d take a look at his business. And so, I joined the franchise which had a group of 12 people that was doing roughly about $300m in sales in Miami. We went from $300m in sales to $480m in sales in the first year. I then decided to run my own team. In my first year of operation I was ranked in the top 1% of all estate agents in the state of Florida. And so, it just went from there.
“In 2010 I moved over to the corporate side, to run the European network for Sotheby’s, and I moved to London for five years. From there I returned to the US and ran the entire organisation for Sotheby’s and eventually all the brands at Realogy, the parent company. “During the last three years at Realogy, I ran all seven of the brands and the global expansion in 113 countries. The brands included Century 21, Coldwell Banker, ERA, Better Homes & Garden, Corcoran, Climb and Sotheby’s International Realty.
“Some of the brands that I dealt with closely in SA were Lew Geffen whom I’ve known for 15 years, and the Geffen Sotheby’s brand in South Africa as well as the Century 21 brand in SA.
Entrepreneurship and eXp South Africa
“When it comes to SA I know the market well. I love the market and I was excited to have eXp in SA which was our first country to be opened under eXp Global.”
Talking about eXp South Africa, Valdes explained that eXp is an independent real estate brokerage. “We have our platform which is eXp South Africa and our growth has been organic. We are the fastest growing real estate company in SA’s real estate history. We’re ranked now as the ninth largest estate agency in just two years and have 708 agents in SA at the moment. And that number keeps progressing literally daily.”
Valdes said eXp’s recruitment process is straight forward. The company is attracting experienced practitioners by word of mouth and by introduction. “What’s really wonderful is that when we first started, we had to explain who eXp was. We don’t need to do that any longer. We’ve attracted some amazing leaders that have come into eXp South Africa. People like Steve Johnstone who has been one of our greatest coaches in SA. He has attracted over 400 agents in his own organisation.
“That’s the beauty of the eXp model. Once we have the right people in place they actually attract a lot more agents. And so, anyone that you attract into the eXp model you’re compensated for your efforts, and they become part of your organisation, which is why we’ve had such a healthy growth trajectory and continue to do so. We fully expect to be over 1,000 agents in Q1 of next year.”
Part of eXp’s entrepreneurial spirit is to encourage personal membership and development within SA’s real estate industry. While eXp is busy formalising job creation and incubator initiatives, Valdes says: “Each member of eXp South Africa is an independent contractor, everyone is there with an equal footing to be able to build their own organisation. We have over 60 hours of live training weekly at eXp South Africa. This boosts and helps anyone that’s new to the industry.”
“We are also developing a mentorship programme, so that those that don’t have much experience in the marketplace can partner with a professional that does and who can train them to give them those skill sets to be successful as well. With our training programme which is already in place, we’re actually doing a lot more. We have a 30, 60, 90 day programme for anyone that’s new to eXp. The programme gets new agents through the process in 90 days to have the foundations, confidence and skills to build their own business.”
Expanding on how eXp South Africa is becoming the country’s fastest growing agency and what the key differentiator is, Valdes says: “It used to be that the broker was the brand, the brokerage was the brand. In our model, the agent is the brand. They are actually the ones that we promote and we’re simply the platform. So, we are a local player where the agent is the brand and we give them a global platform with the tools and everything that they need to really build a global business, not just a South African business. So that really is where we flip real estate on its head.
About the eXp Africa leadership tour
At the Africa Leadership Tour Valdes was quoted as saying that eXp is ‘a master class of the future of real estate’. He says: “That’s really what we’re looking at with technology. With the global pandemic, everybody was forced to move to technology to continue not only to conduct business, but just to survive and have that human connection again. Everyone used online tech such as Zoom, Google Meet and Teams. That was nothing new to us, we have the first metaverse that has ever existed for real estate. This started for us back in 2010 which means we have been doing this for well over a decade.
“eXp’s business model isn’t something that emerged in response to the pandemic. Operating this way was the norm for us and it was accelerated by the needs of the past few years, so now the industry is catching up to the power of our technology and platform.” eXp has now introduced another technology which is a virtual reality technology called Frame VR (Virtual Reality). Frame is a mobile metaverse application, if you will, which is consumer facing, and increasingly, we are conducting business inside the app. SA is one of the first countries to have sold property in the metaver via the Frame app.
“People will come into an app on their phone, go and search the property they’re interested in, in a virtual world, and then as avatars can actually call the agent that is on the listing from the app itself. The agent will jump into the metaverse and continue the tour with those clients. So those are all really very forward thinking aspects of technology which are going to be really shaping our business in years to come. And we’re already at the forefront.”
eXp giving back to SA
While there are plans to expand into Africa, eXp’s current focus is SA Valdes says: “That’s why we really wanted to start in SA. It has a robust and strong real estate market and a market that I knew really well with other brands that I have participated in.
“One of the things that I think was really interesting as well, when we came into SA, Andrew Thompson, who is a wonderful leader for us, when we were establishing our African model, gave a proposal to have a percentage of the fees that we create in SA to remain in SA as a social responsibility fund. At the tour we had the great honour of presenting that first cheque to Gift of the Givers Foundation and Dr Imtiaz Sooliman while we were there, and we presented R350,000 to the organisation. That is really and truly the heart of eXp South Africa. It was the voice of the agent and it was the agent who decided where we were going to donate the money. I believe that initiatives such as the social responsibility fund have helped cement us as truly a South African company in the country.”
Commenting on the donation Sooliman said: “The Gift of the Givers, appreciates the generosity of eXp South Africa and their team for the generous contribution being derived from a percentage of agents’ commission on the sale of properties. This sets a worthy example for other agents in the real estate industry to emulate. The benefit for communities suffering from the ravages of hunger, lack of water, sanitary pads, school uniforms, stationery or wheelchairs is immense, bringing dignity, joy and functionality to the poorest in our midst. This proactive, novel CSI initiative from eXp South Africa is deeply valued.”
