Here, Josh Harley—founder and chairman of Fathom Holdings Inc. (Nasdaq: FTHM), as well as a Marine Corps Veteran and advocate for servant leadership and placing others first—shares his thoughts on why he believes both offices and big commission splits need to end.
Real Estate magazine: Why do you believe both offices and big commission splits need to end?
Josh Harley: They go hand in hand. Most brokerages struggle to pay the bills due to high overhead costs. Remove that huge expense, and now, brokerages can be profitable while also passing some of those savings to agents. It’s a win-win for both brokerage and agent. With commissions being squeezed from every direction, it’s time for a change that helps the agents win. High tide floats all boats. When the agents win, the brokerage wins.
RE: You stated that offices need to go away. What do you say to brokerages that disagree?
JH: We’ve been operating virtually, without offices, for 10 years. When the pandemic hit, a lot of our competitors scrambled to figure out how to operate virtually. We didn’t skip a beat. I’d argue that offices are the biggest expense for most brokerages, and since we didn’t have that cost weighing us down, we remained financially healthy throughout the pandemic.
Many people wrongly assume that being virtual means no support or personal interaction with other agents. You don’t need offices to bring agents together physically, and that’s something we did on a regular basis before the pandemic. A strong culture is key to longevity regardless of whether you have an office.
Agents used to argue that their brokerage needed to have a local office, but then they rarely went. Almost every agent has a home office of some sort, and they’ve realized that they don’t need a brokerage office.
Many brokerages have a great business and are highly respected, but they’re suffering financially. Without the cost of offices, these brokerages could be very profitable, but for some reason, they just can’t let it go. I believe that this pandemic is beginning to open their eyes to that reality. You can choose to survive or thrive, and the office may be the differentiator.
RE: You’re a big advocate for agents keeping more of their commissions. How does that help agents?
JH: There are only two ways for an agent to make more money: increase revenue or decrease costs. By allowing agents to keep 100 percent of their commissions, minus a small flat transaction fee, agents are able to make more money both ways. An agent’s biggest expense is typically the split with a broker.
By keeping more of the commission on each sale, agents reduce their costs and thereby make more money. The average savings for agents joining Fathom is more than $12,000. More importantly, increasing their income gives them more money to reinvest in marketing. If they reinvest that $12,000 into marketing and ultimately close more sales, we’re potentially talking about an additional $100,000 or more in income. That can be life-changing. If agents want to make more money, it’s time to look closely at what’s preventing them from keeping more, investing more and earning more.
For more information, please visit www.fathomcareers.com.