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Listen as Philip Hegge, Adfenix U.S. Director, and Eric Stegemann talk about programmatic ads, marketing, and how the business of real estate differs with agents around the world.

TRANSCRIPTION

Eric Stegemann (00:03):

Hi, everybody. Welcome to Brokerage insider the podcast where we interviewed the leaders in real estate, brokerage and technology. I'm the host, Eric Stagenmaan. And I'm the CEO here at TRIBUS. We are the sponsors of this podcast. And today I have the pleasure of having Philip Hegge, the North American director for Adfenix with us. And today we're going to talk a little bit more, both about Adfenix and about real estate, not only in the United States, but around the world because Philip's company is actually based in Sweden. So Philip, thanks for joining us today. Thank you very much, Eric. It's like to be here. So first of all, tell me a little bit about Adfenix. What is Adfenix to yeah, no, of course?

Philip Hegge So at its core, what we're trying to do is that is to bring really world class sort of cutting edge marketing automation into the real estate industry. Something that we believe is currently missing for, for a series of reasons. One is because it's really hard and we can probably talk more about what sort of, what we think marketing automation is, is later. But we do that by focusing on working with a very sort of custom platform to the, with the largest most, I know it's a real estate broker just in the world. Like you mentioned, we're originally based out of Sweden. We are operating across 13 different countries and also have offices in London, in the UK Melbourne Australia.

Eric Stegemann

Wow. Yeah. So you have a very international vision of what's going on in that, in the industry. Let's dig into that a little bit. How is, how are things different that a listener at a brokerage staff person, an agent, a brokerage owner, that's listening to this podcast here in the United States.

Eric Stegemann (02:02):

How things are different that you see in other countries as far as brokerage is concerned versus the United States or even Canada?

Philip Hegge

Yeah, no, that's a, that's a great question. And obviously something that we probably can talk about for four hours but to, to keep it to keep it short, I mean I've been primarily focusing on sort of the Scandinavian markets early on in the lifetime of the Adfenix then, and also in Australia. And I think that's sort of the key, the key difference sort of most, most sort of clearest difference between the us and the rest of the world is the fact that there is in most countries there was only the seller's agents, right? Only the seller actually has by agent representation and that's cause for a lot of different sort of the things that makes it different than I know this, this podcast is also a lot about sort of the, that, that dynamic for the Brokerage.

Philip Hegge (03:05):

I won't the other thing that I was sort of eye opening for us and also is different than the U S this is also sort of how independent the agent, this, which I think is, you know, it makes sense that American real estate agents, the wants to be an S more independent. So for example, you know, it's in the UK, they're very, very, non-independent right. They're literally employees of, of the company in Sweden, they're slightly more independent, but they're, they're still a sort of initially working from, from a salary. And yeah, that, that also creates a very different dynamic between the brokerage and the broker and the agents in play. I would say those are probably the big two biggest differences that I've experienced at least.

Eric Stegemann (04:02):

So Philip, do you know much about licensing or how somebody becomes an agent in other countries versus the United States?

Philip Hegge (04:10):

Oh yeah. No, that's a, that's a good question. So I guess the biggest difference there, I guess, is that in Sweden, real estate agents asked to go to yeah, basically university or college to become a real estate agent. They need to study real estate for generally, for years in order to become an agent in the first place. And that is your entry level agents. Right. So, yeah, from that perspective, it's obviously very, very different as well.

Eric Stegemann 04:39):

Yeah. And that's been my experience, so I we've had a couple other guests on previously that focused on international markets. And one of the things that I'm, I always, you know have asked about in terms of everybody that's international is I asked them from the countries they're, they're most knowledgeable in, what is it like to get a license there? Because typically, like I have family in Germany and they were shocked when I was 18 that I could go get a real estate license with less than 50 hours worth of work and passing a test. Cause they're in, in Germany you essentially almost have to become like a lawyer to, to sell real estate. And it seems like a lot of other countries it's, you know, you certainly need a lot of classes, right?

Philip Hegge (05:28):

Yeah, no, exactly. But, but I mean, it's, it's, it's, I would say that one, it's pretty common also. I mean, if you're a real estate agent in Spain or even in the UK yeah. You, you, you don't have to become a lawyer. Let's put it that way. Yeah. So, but yeah, definitely. That's comparing, sorry, go ahead. No, yeah. Comparing like Germany, Sweden, and Scandinavia with the U S you'll see those massive concert trusts in that regard.

Eric Stegemann (06:01):

It's certainly pretty much everywhere. I've heard of, it's always more than 50 hours’ worth, of course work. Right. No, that, that, that I can agree with. So you know, let's talk about a little bit a dig in about brokerages and other countries. So you were mentioning that agents in most other countries are less independent than they are in the United States or Canada. So let's talk about that. In, in other countries, when you see brokerages that are out there, what's the average size in terms of agent count of a brokerage that you see,

Philip Hegge (06:37):

Right? Yeah. So that's, that's another differentiating factor, right? I mean, I think that the U S the US real estate mortgage market is quite fragmented, which is something that we were quite surprised about, to be honest, looking at our partners that we have in, in Scandinavia and the UK and Australia really everywhere, except the US we have a company selling a 50,000 properties per year, and that, that they are not even the largest in that in that country, even though the country is much, much, much smaller than the US right. So I think it's hard to talk about agent count because agent count, obviously with the difference in, and if you're an agent in Sweden, it's been your career for the last you've been studying it full time for four years. So obviously you're the average productivity of an agent is much higher. Right. Which means that there is a lot fewer agents. And so I think a metric of makes more sense and sort of average less things, maybe. Yeah.

Eric Stegemann (07:47):

So what, I mean, how many listings at a time, and just to remind our viewers, something Philip has said before, is that in most other countries, there's no concept of a buyer's agent, you only represent color. And so how many listings do you see the average agent carrying at a time in these other countries?

Philip Hegge (08:09):

Yeah, so putting, I would probably look at it sort of as the, the average agent is a fairly sort of high producing agent in, in the U S so maybe two free for not, and again, that's pretty high high producing agent, but also there's very few agents that sell two properties barrier right there that basically it doesn't exist. And there's even in some cases, in some countries where a minimum wage is, is put on, on the real estate agents, meaning that an agent has to produce in order for it to make sense for their brokerage or their meaning their employer, to keep that age in on the region.

Eric Stegemann (08:58):

And I, and so many times I talk to brokers when we do consulting work with our broker client. So many times I asked them for, to produce me sheets that tell me you know, what's the average cost for running the brokerage per agent and they're dumbfounded because they never even thought about it in terms of that concept before. And it's why you see so much marketing in the United States and all of these reports from these other big consulting companies that come out that say, you know, Oh, they're the biggest with a 4,000 agents, right. Well, folks like it.

Philip Hegge (09:35):

No, exactly. Everyone is the biggest with some metrics.

Eric Stegemann (09:38):

Yeah. Yeah. There you go. I had a running joke in one of my presentations that I give a, about a million dollar agents and how for years agents had on their business cards and everything like that, that I wasn't, that I'm a million dollar producer. Well, that means you sold about three homes right this year, maybe, or if you're in California, you sold one home this year. So from that perspective it's really bad because you can always say you're number one or a million dollar producer things. But from that perspective, you can see where if you're paying an agent, a minimum wage and you have hard expenses that aren't just desk fees or our office fees are tech fees things like that. You can see where they're much more vested in to making sure that that person's going to do a good job carry listings and get them sold on a regular basis.

Eric Stegemann (10:33):

Whereas here in the United States, I saw a metrics that said within the past few years, even that something like 50 or 60% of all agents in California had sold two or less homes in the preview. And at one point I think that number was 60 or 70%. Hadn't sold a home in an entire year, back around the time of the crisis, but most of those people kept their licenses. And that's kind of the crazy part, you know, that they weren't making any money, but they were still paying their MLS dues and still paying their realtor fees, et cetera. Yeah,

Philip Hegge (11:04):

Yeah. Yeah. So he's obviously a natural side effect of all of these things that we're talking about now is that there is so much fewer agents in Sweden, right? Take Sweden, for example, where again, there is really high standards on dedication. I might be completely wrong about this, but I think it's only about two to 3000 active real estate agents

Eric Stegemann (11:26):

And Sweden, and what's the total population of Sweden, 10 million. So you can see how, you know, although it's a smaller country in terms of population you, if you start doing the numbers and doing a ho how many agents there are per, you know, a hundred people it starts becoming a much smaller number in Sweden than it is in the United States.

Philip Hegge (11:49):

Yeah. And I, and again, I might, I might have that number slightly off but it's, it's so much ridiculously fewer agents per transaction than it is in the US and we still believe, I think one of the founding sort of thesis that we had when we founded the company was that, Hey, there is too many real estate agents in Sweden. It doesn't have to be this many agents. And then we'd come to the U S note, is that it's a million times more.

Eric Stegemann (12:19):

Yeah. and by the way, if my mental math serves me, correct in the United States, it's about one in 300 people are real estate agents in the United States. I mean, think about that for just a second one in 300 people, not one and 300 households when our, our, a realtor in the United States. And then, you know, beyond that, there's people that have real estate licenses that don't that aren't realtors, of course in the United States. And so then it's closer to like one in 200 people when you factor those people in, in in Sweden, based on the numbers that there are, it's like one in 10,000 people are our age.

Philip Hegge (13:07):

Yeah. And I actually, I actually looked it up because I knew I was, I was often it's about twice as much as I, as I said, it's five, six, 7,000

Eric Stegemann (13:19):

That's. Yeah. So obviously very, very different. Yeah. Okay. So, you know, here's Adfenix, you're chugging away saying there's too many agents in Sweden and we're going to help make an automate it and, and help the ones that stick around and make more money. And the Brokerage make more money. Where does Adfenix wake up one day and say, Hey, let's go across the pond and, and hit the United States because we think we can help their brokers out too.

Philip Hegge (13:47):

Hmm. That's a good, that's a great question. I mean, obviously from, from, from one, one perspective is that if we really want to make an impact and improve the way people are buying and selling homes, we kind of need to do that in the ULS as well. If we really get, want to make a massive impact in the world, we can't just disregard the US so I, and, and so that started about two years ago, I was sort of put on, on the job you could say, and, and without too much, or two and a half years ago, maybe too much sort of focus on it with, as a company. So we, our approach was, yes. Okay. Let's throw Philip on it and see what happens a little bit. And so we took that sort of six months to figure that out rather than saying, Oh, that's, that's how it is.

Philip Hegge (