A US real estate company, RE/MAX, has started selling licences to Kenyan franchisees.
The company opened a Nairobi office in June under a model where franchisees manage or oversee agents who look for houses to list and match with buyers anywhere in the world.
Wachuka Kebuchi, a banker, is among the 20 Kenyans who have joined RE/MAX as a franchisee.
She has been running her own real estate company for three years and says she hopes to gain recognition from international clients.
“The training we get is very specific to real estate. It is unlike anything that was available in the industry. It has helped a great deal,” says the franchisee with three agents under her wing.
The US company has a presence in over 100 countries.
Chip Brekken, the director global development in charge of Africa, Middle East and Europe said Kenya is a very exciting market given that the real estate space is just opening up.
“There’s an opportunity for Kenya to take a leap ahead and the kind of organised platform that RE/MAX is offering is a good forward-looking way to do this,” he said.
RE/MAX, short for “Real Estate Maximums”, is headquartered in Denver.
Leveraging technology and networks, and using a three-tier structure, RE/MAX’s Kenya office will sell franchises to franchisees—also known as broke owners —wishing to deal in the local property market.
The franchisees will in turn recruit agents to cover as much ground as possible.
The franchisees pay a one-time fee of Sh2 million to enrol and later remit an eight per cent fee to the franchisor for every transaction.
Meanwhile, the brokerage firm and agents split a commission of 50-50 per cent per transaction.
However, Ms Kebuchi, says there exists challenges getting the right agents who understand the model.
“Recruiting and retaining agents isn’t easy. The Kenyan mentality of getting a salary at the end of the month has been an inhibiting factor. One can only hope to get someone that sees the bigger picture, but I think over time as more people understand the model we’ll get more people coming on board,” she said.
Mr Brekken said any real estate agent can run their own business, but it is the professionalism, networks and the opportunity to work within an organised team that gives RE/MAX the edge in Kenya.
He is mostly targeting small real-estate companies which need to plug into a brand to open themselves up to the world.
James Muratha who heads the Kenya regional office with Kirti Chauhan said they hope to bring Kenyan property to a new global market.
‘‘We hope to tap into this market with expatriates and Kenyans in the diaspora,” he said.
Agents are also linked to others anywhere in the world where there is a RE/MAX franchise and are matched with the appropriate property.
But the business, according to Mr Muratha, has not been without its teething problems.
“The real-estate establishments in Kenya while eager about our model and want to benefit from the experience of the company, are conversely keen to hold onto their own brands and identity, a thing that is causing many to hold back on joining the franchise,” he said, adding that RE/MAX entrants are vetted to keep out quacks.