Changes in business models Is it RE/MAX? The possibility emerged during the company’s second-quarter 2024 earnings conference call on Friday morning, as declining agent numbers continue to weigh on revenue in an already tough housing market for real estate companies.
Since its inception, RE/MAX has operated on a flat-fee business model, according to its website. You have options For agents who want to split commission.
Asked whether RE/MAX was considering changing its model to “put even more emphasis on the economics of the actual transaction,” CEO Erik Karlsson said the company is “trying to leave no stone unturned.”
“We’re not naive enough to think that change isn’t necessary,” he said. “We’re looking at every aspect of our business, whether that’s a complete change in model or hybrid in the future.”
Investors seem bullish on this possibility. The company’s stock price is It’s rising Additionally, the company tallied net income of $3.7 million for the April-June period, driven by a 13.3% year-over-year decrease in operating expenses, primarily related to reduced selling, operating and administrative expenses.
RE/MAX’s agent count fell 0.7% year over year to 143,542, but was up from 143,287 in the first quarter of 2024. Most of that was due to a 6.3% decrease in U.S. agent counts, partially offset by a 4.2% increase in agent counts outside the U.S. and Canada.
The company’s agent count had begun to decline even before the COVID-19 pandemic due to increased competition in the low-cost brokerage industry. The year-over-year decline in agent count led to revenue falling 4.8% year-over-year to $78.5 million.
Mott MortgageThe RE/MAX national mortgage brokerage franchise brand, which launched in 2016, saw a 2.6% increase in franchise numbers over the past year. According to the company, approximately 50% of franchise sales come from RE/MAX affiliates, 20% from independent or competing brokers or teams, 20% from investors and 10% from loan originators.
RE/MAX expects agent numbers to remain roughly flat for the full year and forecasts full-year revenue of between $305 million and $315 million.
RE/MAX is maintaining a hold on the settlement of the Baton Homebuyer Fee Litigation; National Association of RealtorsBecause the plaintiffs represented buyers, not sellers, no settlement was reached.
Homebuyer plaintiff James Mullis has appealed the May 9 ruling that granted final approval of the settlement agreement with RE/MAX and other defendants. Keller Williams and Anywhere. Under the agreement, RE/MAX agreed to pay $55 million.
The appeal was filed June 4, the second appeal being brought by Spring Way Centers, the original home seller plaintiff in the counterfeit sales fee lawsuit filed in Pennsylvania in December.
