Legacy mega-franchisor RE/MAX reported a 3.4% drop in revenue and a 4.4% drop in agents across the U.S. and Canada, citing broader housing-market headwinds and an exodus of agents from the industry even as the company expects “positive momentum” heading into 2025.
With a total of $78.5 million in revenue and a net decrease of 3,668 agents in domestic markets, RE/MAX CEO Erik Carlson acknowledged that there is “more work still to be done,” but said that recent moves made by the company are putting it on a positive path as the broader real estate market improves.
“Here in the U.S., significant industry-wide agent attrition is widely being reported and is a real factor, but we know we need to improve upon what we can control to advance our performance,” Carlson said on a conference call following the earnings report. “One way we aim to stem, and ultimately reverse this trend, is by focusing on providing the best customer experience we can.”
Carlson also touted an increase of agents internationally, up 5.9%—enough to essentially offset the decrease in domestic markets. RE/MAX executives also told investors that it is too early to tell if recent policy changes due to the National Association of REALTORS®’ (NAR) settlement will have an impact on commission rates, although other recent data—including a landmark RISMedia study—found significant dips in commissions since August.
“Our agents are continuing to navigate change and they lean in and they’re out there articulating their value,” said Amy Lessinger, president of RE/MAX. “Prior to the announcement of the (NAR) settlement, we were preparing for broad education on these topics, and so we’ve done nothing but lean into that since we announced our settlement months ago. And so we wanted our agents to be fully prepared. And what we’re hearing is that buyers are appreciating those conversations.”
Carlson also touted more productivity from domestic agents, as well as new tech offerings and lead concierge services, which he said have shown promising early results.
RE/MAX Chief Financial Officer Karri Callahan highlighted an increase in broker fee revenue, which she said was due both to high home sale prices as well as the aforementioned productivity increases.
“The uptick in U.S. agent productivity was great to see and highlighted the strength of our network in the current environment despite the recent industry practice changes,” she said.
Back to the financials, Callahan pointed to a decrease in expenses, with Q3 selling, operating and administrative expenses down almost 16.6%, as a significant boost from the company. That decrease was “broad based,” and came from savings on everything from legal and personnel costs to tech, she said.
But she added that next quarter is expected to be impacted by hurricanes that caused tens of billions of dollars in damages across multiple states in the Southeast a month ago—partly as the company extends “limited financial relief based on fact and circumstances” to affiliates impacted by the storms.
“These were extraordinary storms, and most of us probably know someone who was directly affected by them,” said Carlson. “Unfortunately, we tragically lost one of our brokers and their spouse. The thousands of affiliates (who) were impacted have now begun the task of rebuilding their lives. We are proud of the way RE/MAX and Motto Networks rallied to support their affiliates and their communities.”
Looking ahead, RE/MAX is projecting agent count to remain flat for the full year, and adjusted its revenue expectations for 2024 down to $311 million on the high end, from a previous projection of $315 million.
