In gentle of the hot verdict within the Sitzer/Burnett fee lawsuit, RE/MAX executives expressed nice pleasure about their choice to settle the swimsuit — in addition to the Moehrl and Nosalek court cases — for $55 million ahead of it headed to trial.

“Whilst it got here as a vital monetary price, we imagine it was once completely the most productive choice for all of our stakeholders, associate, workers, shareholders, and debt holders alike,” Steve Joyce, RE/MAX’s CEO, instructed traders and analysts all over the companies 3rd quarter 2023 profits name with traders Friday morning.

Even if some have speculated that the approval of RE/MAX’s agreement, in addition to the agreement reached via Any place Actual Property, could also be put into jeopardy via Pass judgement on Stephen Bough’s but to be introduced injunction and ultimate ruling at the swimsuit (in addition to a possible DOJ motion), RE/MAX executives instructed analysts at the name that they had been assured it will be authorized.

Executives additionally expressed self assurance that the phrases of the agreement settlement shouldn’t have a vital affect at the company’s earnings and fiscal viability shifting ahead.

“Within the agreement we agreed to sure trade apply adjustments, lots of which we already do,” Nick Bailey, the president of RE/MAX stated. “With the exception of fee of the agreement quantity [of $55 million], we don’t be expecting the phrases of the proposed agreement to have subject material affect on result of operations and money flows.”

In line with Bailey, the franchisees and agents he has spoken with are happy with the settlements.

“Lots of the agents are in reality running onerous to stay their brokers centered at the trade,” Bailey stated. “There are nonetheless other folks in the market purchasing and promoting, however as issues growth, if there are further adjustments that have an effect on the way wherein they do trade, then they’re going to make the ones adjustments.”

Irrespective of what those adjustments might appear to be, Joyce instructed traders that the energy of the RE/MAX emblem would lend a hand elevate the company thru any sudden demanding situations that can rise up.

“We’ve got the most efficient brokers and since our fashion may be very other than anything else in the market, in case you are a extremely productive agent, irrespective of the place commissions move, you might be nonetheless going to love our fashion and you will nonetheless like being with us as a result of it’s the maximum enabling of the manufacturers in the market to promote extra homes,” Joyce stated.

What occurs to fee charges? Purchaser’s company?

In spite of the executives’ self assurance and reassurances, analysts requested Bailey and Joyce to stroll them thru numerous eventualities of what the fallout from the Sitzer/Burnett, in addition to Moehrl, Nosalek and Gibson court cases, might appear to be. One of the most biggest issues expressed was once what the affect to fee charges might be.

“Once we have a look at historical past, fee charges had been proven to practice provide and insist,” Bailey stated. “Fee charges went down within the mid-2000s, they got here again up all over the Nice Recession they usually’ve come down even sub-5% since then,” Bailey stated. “I believe that we’re going to see a lot of the similar — that that is going to be pushed extra via provide and insist.”

Bailey was once additionally requested to weigh in on purchaser’s company and the viability of consumers’ agents if cooperative reimbursement is going away.

“In a few of the ones international locations the place we function, the place there’s no purchaser’s company, it may be very tricky of consumers and hard for shoppers as an entire. In a few of them it’s only a ‘purchaser beware’ mentality,” Bailey stated.

Because of this, Bailey stated RE/MAX firmly helps purchaser’s company and believes that “it serves shoppers very, rather well.”

“A dozen years in the past, when tech in reality began to take a middle seat, now not simply on house seek, however simply in all of the knowledge that has changed into to be had to attainable consumers, we discovered, and the knowledge confirmed this, that buyers are the use of brokers at the next fee these days than they ever have ahead of,” Bailey added.

Q3 monetary effects

Even if the fee court cases and the myriad of questions the Sitzer/Burnett verdict has created took up maximum of RE/MAX’s Q3 2023 profits name, executives additionally took a while to check the corporate’s monetary effects for the quester.

All the way through Q3 2023, RE/MAX reported an 8.7% annual lower in earnings to $81.2 million. As well as, the corporate reported a $59.5 million web loss for the quarter, in comparison to a $140 web source of revenue a yr in the past.

Because the housing marketplace has slowed up to now yr, RE/MAX’s U.S. agent depend has dropped. In comparison to a yr in the past, the company’s U.S. agent depend is down 6.0% to 56,494 brokers. In spite of this drop, RE/MAX’s total agent depend is up 0.7% yr over yr to 145,309 brokers, because of robust expansion in its global agent depend (up 7.4% every year to 63,527) and Canadian agent depend (up 1.1% annual to twenty-five,288).

Transferring ahead, RE/MAX executives stated they’re proceeding to concentrate on projects to develop U.S. agent depend, together with the growth of its pilot program to draw extra groups of six or extra brokers to the company.

“I believe as we see the full selection of brokers within the business cut back, we’re simply now not resistant to it,” Bailey stated. “What we’re doing is to have a look at what different expansion projects with groups, with M&A, and with a few of recruiting to get some sure momentum going and counteract any stage of attrition of the full business.”