Flat-fee real estate brokerage Fathom Realty will hike its agent fees in 2024 to bolster the company’s revenue by more than $3 million next year.
The brokerage will implement two main changes to its fee structure, effective on Jan. 1. First, there will be an increase of $100, from $600 to 700, in agents’ annual fee, which is charged on an agent’s first transaction every year.
Additionally, the company will charge a new $200 fee on each property sale over $600,000, dubbed the “high-value property fee.” This is on top of the existing agent’s transaction fee of $550. An additional $250 will be charged for each $500,000 over a $1 million sales price.
“We believe that this small increase to agent fees will have a minimal impact on our agents while helping Fathom achieve our objectives and provide our agents with an ever-improving agent offering,” Fathom CEO Marco Fregenal said in a statement.
Fregenal further expects that the new fee structure will add an estimated $3.1 million in earnings before interest, taxes, deductions and amortization (EBITDA) in 2024.
Fathom already started raising its agent transaction fees by 10% in the third quarter of 2022, reaching a cost of $550 for the first 15 completed transactions, according to the company’s earnings report. After the first 15 transactions, agents currently pay $150, up from $99 before the increase.
Parent company Fathom Holdings raised about $3.45 million through a public share offering
On Dec. 1, Fathom Holdings announced an underwritten public offering of 3 million shares of common stock, inclusive of 1 million secondary shares coming from company former CEO Joshua Harley, for $2.00 per share. In addition, the company granted Roth Capital Partners LLC, the deal underwriter, a 45-day option to buy another 450,000 shares at the same price.
Fathom Holdings said in a statement that it intends to use the proceeds of the offering for “general corporate purposes to include accelerating agent growth.”
Josh Harley stepped down from the CEO role last month, making way for Marco Fregenal to take the helm.