The Agency Ready to Power into 2020
Last year was tough for all of us. The Agency had a tough year too. But in July 2019, boutique investment group Magnolia Capital injected close to four million in the three-year-old startup. They are now The Agency’s largest shareholders.
So who is Magnolia Capital, and why did they invest?
I spoke with Mitchell Atkins, a Director at Magnolia Capital and now an Executive Director of The Agency, to find out why.
Magnolia Capital liked The Agency’s lean business structure and willingness to work with the contemporary consumer and context. Mitchell says, “There are no postcodes, there are no specific regions. People work together in the business. So it’s a team environment, which I like, from a business model perspective and a cultural perspective. The Agency brand supports the agents. So you want to ring Brian Whiteman to sell your property – Brian’s also linked to Ben Collier. If someone’s moving from the Eastern Suburbs to Central Coast – you’ve got two great agents working together.”
He adds, “There are no egos. A young guy can ring Ben, and he’ll pick up the phone. Someone can ring Matt, and he’ll pick up the phone. It’s a team environment. Everyone’s working together to build the biggest real estate company in Australia. Staff at The Agency walk in with the spring in their step, because they know they can list anywhere and they’re going to work with the agents who are particular to that area. The fee sharing policy is very, very transparent between all agents. So there’s no hidden anything, there are no hidden agendas, no hidden fees. It’s bang; there are the rules.”
Mitchell is excited about the future. He says, “We’ve just come out of one of the biggest downturns in real estate in recent years. We had banks tightening, and then sales just completely dropped, and we had an unstable economy. It’s bouncing back now. The Agency has consolidated costs, and they’ve recruited hard. On the back end, it’s a stable business. They’ve got everything under control. So they’re poised perfectly for any rebound in the market.”
There’s been much chatter about The Agency’s fee structure. Mitchell says, “Depending on the states, and essentially it’s based on sales and GCI. So, there are four levels. Everybody in the company – Australia wide is on the same splits. So there are no hidden side agreements between X and Y to give them a little bit extra, this is it. It’s transparent, and it doesn’t change for anybody. It’s that age-old rule. If you tell everybody how much you’re earning, no one’s going to argue because it’s transparent. So it starts at 60 and goes up to 80 per cent.”
For agents, the group also offer essential services – everything from marketing to trust accounting. The level of support provided is up to an agent to determine. Mitchell says, “It depends on where you are in the market and where you are at tech-wise and business-wise. So there’s my Mum, for example, great agent, got to love her – terrible at the back end of the business. She has support staff to help her, and then The Agency does the rest in terms of the marketing. So the support staff plug into The Agency, Mum’s out there selling, and she knows that everything’s done in the background. But if you’re a little bit savvier, you don’t need anything.” Digital agents can plug in and play and do it all themselves from their phone.
With regards to property management – this is an area of the business they want to boost. Mitchell says, “There’s no end to end backend solutions. It’s an efficiency model.” For agents who join The Agency, they can retain the property management, rebrand at the agency, have their staff, and run it or hand it over.
So for 2020, The Agency is ready for the changing context. There has been a high level corporate restructure. Mitchell says, “We’ve got Andrew Jensen back into the COO position, and we’ve got a new CFO starting. From a corporate level, I’m looking forward to having a more structured team and being more analytically based.
“We are looking forward to the market coming back.”
It sounds like they are ready.