Q2 2023 Anywhere Real Estate Inc Earnings Call

Speaker 2: Good morning, welcome to the Anywhere Real Estate second quarter 2023 earnings conference call via webcast. Today's call is being recorded and a written transcript will be made available in the investor information section of the company.

Speaker 3: Good morning and welcome to the second quarter 2023 earnings conference call for Anywhere Real Estate. On the call with me today are Anywhere CEO and President Ryan Schneider and Chief Financial Officer Charlotte Ciminelli.

Speaker 3: this call. These statements are based on the current expectation and the current economic environment. Forward-looking statements, estimates, and projections are inherently subject to significant economic, competitive, litigation, regulatory, and other uncertainties and contingencies, many of which are beyond the control of management.

Speaker 3: including, among others, industry and macroeconomic developments, and the incurrence of liabilities that are in excess of amounts accrued or payments made in connection with pending litigation.

Speaker 3: Actual results may differ materially from those expressed or implied in the forward-looking statement.

Speaker 3: and factors that could cause actual results to differ materially from those in the forward-looking statements are specified in our earnings release issued today, as well as our annual and quarterly SEC filings. We want to close this Ed

Speaker 3: Note that nothing we say today should be construed as an offer or solicitation to purchase, sell, or tender any securities.

Speaker 3: For those who listen to the rebroadcast of this presentation, we remind you that the remarks made herein are as of today, July 25th, and have not been updated subsequent to the initial earnings call. Now I will turn the call over to our CEO and President, Ryan Schneider. Thank you, Alicia. Good morning, everyone. In the midst of a challenging housing market, we are looking to move forward to the next three housing markets.

Speaker 4: We delivered results in line with our expectations and continued to invest to set anywhere real estate out for an even stronger future.

Speaker 4: During the second quarter, we delivered $1.7 billion of revenue and generated $126 million of operating EBITDA.

Speaker 4: Our closed transaction volume was in line with our estimates, and we are on track to deliver 200 million of cost savings this year.

Speaker 4: And our agent commission results came in better than expected, with some of the best year-over-year results we've seen in a long time.

Speaker 4: We remain focused on improving our capital structure, especially our priority to deleverage our balance sheet.

Speaker 4: And today we announced a debt exchange transaction with one of our bondholders and our intention to conduct a broader exchange offering on similar terms.

Speaker 4: And importantly, we continue to invest in to drive our strategic agenda, which includes growing our high margin franchise business, expanding our luxury leadership position, simplifying and integrating the consumer transaction experience, and further transforming our cost space. We position Anywhere Real Estate to both benefit from a stronger housing market and a stronger

Speaker 4: and to lead into the future. Now starting with the housing market, we remain in a tough part of the cycle. With six months of the year behind us, it looks like our industry is heading toward 4.2 to 4.3 million annual unit transactions, which would be by far the lowest level in over a decade.

Speaker 4: And if you look past the Great Recession, we've not seen unit transactions this low since the mid 90s.

Speaker 4: But we planned for a challenging 2023, took aggressive actions in both cost reductions and investing for the future, and we are seeing our volume metrics come in consistent with our expectations that we shared with you.

Speaker 4: Q2 transaction volume was down 23% year over year. The decline was almost all unit driven, and we saw unit volume declines be pretty consistent across our markets.

Speaker 4: Our home prices were basically flat year over year, as we've all seen incredibly tight inventory creating supply challenges, even in this higher mortgage rate environment.

Speaker 4: However, we see significant geographic variation in price trends in our results.

Speaker 4: Across about two-thirds of the country, including large states like Texas and Florida, we saw price increases on average by about 3% versus last year.

Speaker 4: But a few of the bigger markets, in particular California and New York, we saw prices down in the mid single digits, consistent with our first quarter trends.

Speaker 4: And in Q2, the more positive detailed trends in our portfolio have persisted.

Speaker 4: Open volume compared to prior year continues to look better than closed volume compared to prior year each month in the quarter.

Speaker 4: and volume comparisons to 2022 improved each month in the quarter, both as the market has a little more positivity and as the 2022 comparisons get easier.

Speaker 4: And all of this is consistent with our quarterly and full year guidance.

Speaker 4: Now the challenging housing market affects the entire industry and we like the fact that it establishes a level plane field.

Speaker 4: Because anywhere real estate's best position to prosper because of some of our unique advantages, including our high octane industry leading franchise business with six naturally recognized brands.

Speaker 4: Our opportunities from having end-to-end national assets and brokerage title, mortgage and insurance.

Speaker 4: Our powerful lead generation at a time when quality lead generation is more important than ever at our high impact technology and data scale.

Speaker 4: And we're harnessing these advantages even in a tough market to charge ahead on our strategic priorities and position anywhere for long term success.

Speaker 4: Some examples of that include, first, we are laser focused on changing how we operate to deliver efficiencies that help simplify, automate, and streamline our operations.

Speaker 4: We can shoot and make considerable progress in our cost transformation and expect to take 200 million of costs out of our business in 2023 and Charlotte will share more on this shortly.

Speaker 4: Second, we are integrating our national brokerage and title support operations to make the real estate transactions simpler for the agent and consumer, to make it easier for us to capture title and mortgage economics, and to be more cost effective as we streamline those businesses.

Speaker 4: Third, we love and put significant effort into growing our powerful franchise business.

Speaker 4: Beyond the recent record years of franchise sales success, anywhere brands is further shrinking in its value proposition by providing new and innovative offerings to franchisees.

Speaker 4: As one example, anywhere is now using our technology and data scale to help our franchisees achieve better results via our recently launched affiliate insights product.

Speaker 4: This new product helps individual franchisees run their business better by drawing on anywhere's extensive internal and external data to provide them actionable insights on growth, on their cost-base, on age migration opportunities, and on other critical topics. And I love the demand I'm hearing from our franchisees. I'm hearing from our franchisees.

Speaker 4: Finally, Anywhere is an innovative technology provider and we're the industry analytics leader leveraging our unique data scale.

Speaker 4: We are finding exciting opportunities using generative AI and large language models, and we're committed to being on the forefront of this new world in our industry.

Speaker 4: Now if you look backwards, we like the analytic and the machine learning insights we've been using to enhance our business.

Speaker 4: And so for example, the agent recruiting machine learning model you've heard me talk about with you before.

Speaker 4: But today and going forward we are seeing large language models have real power for real estate's future

Speaker 4: For example, augmenting real estate marketing, including designing and executing marketing campaigns.

Speaker 4: And I'm personally very intrigued by photo and image-based AI innovations like virtual renovations.

Speaker 4: as well as this the whole opportunity to simplify the transaction.

Speaker 4: and we are starting multiple proofs of concept to explore these and other opportunities.

Speaker 4: Now these new technologies are also already helping us run our company differently.

Speaker 4: E.g. our software engineers are using these technologies to code more efficiently.

Speaker 4: e.g. we have a few early pilots where large language models are providing support to our employees.

Speaker 4: We're really excited about these new analytic opportunities even in these early days.

Speaker 4: And we have a lot of work to do to both train and tune these models on our specific data and on real estate industry data more broadly.

Speaker 4: But we're really excited about it. We know these new technologies will change how every company operates. And we're committed to being at the forefront of that journey.

Speaker 4: So I'm going to come back later with a few closing thoughts, but for now I'm going to turn it over to Charlotte to discuss our results in more detail.

Speaker 5: Good morning everyone. We are pleased with our second quarter results given the market dynamics which continue to improve sequentially as expected.

Speaker 5: We remain focused on what we can control, reimagining how we operate, driving cost efficiencies, prudently managing cash, and being opportunistic on our capital structure.

Speaker 5: We believe these actions will enable us to drive differentiated performance and set us up well for when the housing market improves.

Speaker 5: Now I will highlight our second quarter financial results. Q2 revenue was 1.7 billion down 22% versus prior year and in line with our transaction volume decline.

Speaker 5: Q2 operating EBITDA was $126 million, down versus prior year due to lower transaction volume and slightly higher agent commission cost, which were offset in part by cost savings across the enterprise.

Speaker 5: Q2 free cash flow was 105 million, as we prudently managed our cash, which we used in a consistent way with our capital allocation priorities to invest in the business, and partially repay some of our revolver borrowings, which stand at $310 million today.

Speaker 5: Free cash flow in the quarter benefited from improved working capital and the relocation securitization facility.

Speaker 5: Consistent with our capital allocation priorities to reduce our debt, we are pleased with the opportunistic financing transaction we announced this morning. With one of our bondholders agreeing to exchange approximately 275 million of their 2029 and 2030 senior notes.

Speaker 5: for approximately $220 million in new 7% second lien 2030 secured notes and our intention to conduct an exchange offer for a portion of the remaining 2029 and 2030 notes on similar terms.

Speaker 5: As Ryan mentioned, we view these transactions as an opportunistic way to deliver it with minimal incremental annual cash interest expense while retaining our flexibility going forward. Now let me go into more detail on our business segment performance.

Speaker 5: Our Anywhere Brands business, which includes leads and relocation, generated 164 million in operating EBITDA.

Speaker 5: Operating EBITDA decreased 40 million year over year, primarily due to lower revenue related to transaction volume declines, partially offset by decreases in operating and marketing costs.

Speaker 5: Our Q2 anywhere advisors operating EBITGRA was negative 10 million, down 21 million versus prior year, due to lower volume and slightly higher agent commission costs, also offset in part by lower operating and marketing expenses.

Speaker 5: Commission splits in Q2 were up 32 basis points year over year, which was better than we expected in the quarter. We have been taking advantage of an improved competitive backdrop and are proactively managing splits.

Speaker 5: Also, there are even parts of our business, especially in luxury, where our splits were even lower than prior year in the quarter. Anywhere integrated services was 10 million in operating evita in Q2.

Speaker 5: Operating EBITDA declined $11 million year-over-year due to lower purchase and refinance volumes, which was partially offset by lower operating expenses due to cost savings initiatives and $3 million of improved GRA JV performance.

Speaker 5: As Ryan said, we continue to change how we operate and that is driving efficiency and lower costs.

Speaker 5: Before I talk about the cost savings, let me provide some additional detail on our overall cost structure. In 2022, operating, marketing, and G&A expense line items totaled about $2 billion.

Speaker 5: Of this total, headcount-related expenses were about 1.1 billion, and office-related expenses were about 220 million. As these are the majority of our expenses, this is where most of our savings come from, and represent about 70% of our 2023 cost savings program. For example,

Speaker 5: We have reduced our headcount by 15% since June 2022.

Speaker 5: And on the real estate footprint, we are focusing our efforts to reimagine and transform our real estate brokerage offices to be more efficient, flexible, and integrated with transaction support services in title and mortgage.

Speaker 5: We expect to reduce our brokerage and title footprint by about 10% this year, with most of the actions already completed.

Speaker 5: Please refer to slides 18, 19, and 20 for further details. Year to date, we have realized approximately 100 million of our 200 million cost savings program.

Speaker 5: The savings will be realized pretty evenly throughout the year, and we consider approximately two-thirds of our full year savings will be permanent and not expected to return when volumes increase.

Speaker 5: These savings, however, will be offset in part by inflation and by litigation costs.

Speaker 5: Between 2022 and 2023, we expect to realize a combined 350 million of cost savings, which is a huge accomplishment.

Speaker 5: Our focus here reinforces our commitment to reimagine how we work while delivering a better experience to our agents and customers. And we've nearly achieved our 2026 cost savings target that we laid out in our investor day last year.

Speaker 5: Now, on to our updated estimates for 2023.

Speaker 5: First, we expect Q3 closed volumes to be down about 10% versus prior year.

Speaker 5: This is the third quarter of sequential improvement in year-over-year transaction volume driven in part by easier comparisons to the prior year.

Speaker 5: Second, based on the year-to-date split trends, we now expect full year split pressure of about 50 to 75 basis points.

Speaker 5: We really like our actions in this area, the improving volume trends, and the better competitive environment we're experiencing. We're experiencing.

Speaker 5: Estimates that remain the same as our last call.

Speaker 5: For full year 2023, we continue to expect transaction volumes to decline about 15 to 20% year-over-year, and likely towards the better part of that range.

Speaker 5: We also still expect transaction volumes will improve sequentially throughout the year.

Speaker 5: We expect our operating free cash flow to be modestly positive as favorable working capital, capital robust savings programs and our cash management discipline will counterbalance this tough year in housing.

Speaker 5: This excludes the impact of cash expenses from the debt exchange transactions and any other nonrecurring items.

Speaker 5: Finally, we are on track to realize 200 million of PNL cost savings in 2023.

Speaker 4: Let me now turn the call back to Ryan for some closing remarks. Thank you, Charlotte. So as I reflect on the second quarter, I'm proud of how our team navigated this tough housing environment to deliver results.

Speaker 4: And I'm excited about the strategic progress we made in the quarter to set up our business for greater growth when the market rebounds.

Speaker 4: The permanently streamlined our cost base that we operate differently.

Speaker 4: To reimagine the age and consumer experience, and to enhance our analytic leadership, as we experiment with generative AI in large language models.

Speaker 4: Now, looking ahead, I remain optimistic about the housing market over the medium term and our ability to lead into the future. Together with our employees, affiliated agents and franchisees, we're seizing this moment to position anywhere real estate to move real estate to what's next. With that, we will take your questions. At this time, I would like to remind everyone in order.

Speaker 6: I was wondering if you could offer a few comments just around the commission split trends. And you mentioned that luxury splits had kind of moved down. Would you mind talking a little bit about what you're seeing? Just the details around agent splits. Maybe.

Speaker 6: higher end splits versus the overall market and in the longer term, how you're kind of thinking about balancing commission splits with the expansion of agent tools.

Speaker 7: Absolutely.

Speaker 5: So we really benefited in the quarter from a few things, but basically because the competitive environment has improved, what we're seeing is that, while we still have prior years and quarters recruiting and retention, we're not having to add nearly as much to that. So as the volume continues to improve as we come into the season,

Speaker 5: And all the split plans are actually quite different brand by brand. Some of our split plans actually did reset all at the same time in January for some brands. And we're bit that's part of where we're seeing the benefit year over year actually being down. So we like the trends, we like the competitive environment.

Speaker 5: And as it relates to the overall agent value proposition, you know, absolutely. So, there's lots of other ways to provide value to agents that is not in the commission split. I think Ryan's referring to some of that in his prepared remarks. And that definitely helps balance overall. So, good call out there. That's something we're absolutely focused on for the future.

Speaker 6: Okay. And then just to follow up, do you have a view on where agents kind of see the top concerns for homebuyers in today's market? I don't know if you have kind of a pulse on what they've been saying and such, but do you have a view of where agents are?

Speaker 6: Is it mostly an inventory issue? I mean obviously inventory is a major issue, but is that where they're seeing kind of the largest pressure on volumes for homebuyers decision-making or are rates kind of making that decision for buyers?

Speaker 4: So it's a great question Elizabeth, thank you for asking it. Yeah, we clearly have a pulse on the agents with the kind of couple hundred thousand here in the US that we support and interact with a bunch of them regularly as you would want us to. Look, the biggest thing I hear from agents is just, they need more houses to sell.

Speaker 4: Right. And for buyers, it's just tough out there when supply is just so limited. And obviously, a lot of that comes out of the mortgage world and in a world where 60 plus percent of people have mortgage rates below 4 percent. It's just such a barrier to supply with mortgage rates now at 6.7.

Speaker 4: to high quality lead generation, anything we can do to help our agents actually get a transaction in this tight.

Speaker 4: very low transaction year is critical, but the biggest thing I think buyers are frustrated with is just the lack of choices out there. And it's the thing that's kind of dominating the challenges in the housing market right now, is just that lack of supply, with high mortgage rates being a big piece of why that supply is so low.

Speaker 4: low transaction year is critical, but the biggest thing I think buyers are frustrated with is just the lack of choices out there. It's the thing that's dominating the challenges in the housing market right now is just that lack of supply with high mortgage rates being a big piece of why that supply is so low. Thank you, that's really helpful.

Speaker 2: Thank you, Elizabeth. Your next question comes from Tommy McJoyant with KBW. Your line is open.

Speaker 8: Hey, good morning guys. Thanks for taking my question. The first one is just to the extent that the housing market does sort of remain stuck in this four and a half million existing home sale market. And fast forwarding to, I guess, all of your expense savings having been fully actioned.

Speaker 4: Yeah, sure, good question, Tommy. So look, obviously the easiest way for anyone to grow in our industry from an earnings standpoint is when the market's stronger. But if you look at the actions that we're taking today, we should show you that we're committed to driving EBITDA growth no matter what the market is. And our EBITDA both absolute and relative results on a competitive basis are going to look pretty darn good. And a lot of it starts with the cost stuff that you reference in Charlotte reference, right? The more we transform our company to be simpler, more automated, more digital, you think about the 150 million last year, the 200 million this year.

Speaker 4: And today's not the day to talk about it, but there may be more in the future, right? In that kind of world. So that's a big bucket. But even in this market, there's some of the opportunities we've also been working on that would add more to our revenue into our bottom line.

Speaker 4: If you think about the transaction integration opportunities that can kind of bring more mortgage title economics into the ecosystem, even at today's transaction levels, that creates EBITDA upside for us. And we like the early green shoots on that. And we're still investing in that in this tough market. And then some of the consumer specific things that.

Speaker 1: baseline assumption is maybe it's about 50-50, but I'm curious if there's a skew there. And then, you know, specifically on the listing side, I guess just any thoughts or anything you can add around, you know, what you're seeing in terms of new listings coming to market. What do you think it takes to get back to, you know, a more normal pace of homeowners actually listing their homes and whether it's by market or by price point. Just curious if there's any kind of green shoots or encouraging signs you might be seeing to suggest that more listings, you know, will be coming to the market. Yeah, so Ryan, look, given our size and scale, 50-50 is totally the right assumption, you know, on buy versus sell side listings.

Speaker 1: Listings clearly weigh down versus a year ago, and it's a supply issue as we've talked about. We're seeing the biggest pressure on listings, as you would probably expect, in the mass market and the first-time home buyer. If you look at the July data that I referred to in an earlier question, we're actually seeing luxury listings in July improve more than the rest of the market. That's the one price point thing that we're seeing some green shoots on that we're interested in, especially with our market.

Speaker 1: We communicated, it was a month ago, they're moving a ton of product. And part of that is obviously because there's very little inventory in the retail market, but they're also moving the product because they're buying down mortgage rates into that five or five and a half percent rate. In fact, this CEO told me that, they'll buy a mortgage down to 4.99 for any.

Speaker 1: house being delivered in the next 60 days and then their other buy downs take it to five to five and a half percent. And so there's some real clear evidence to me there that you know at those mortgage rates consumers are absolutely ready to buy. Want to buy, it's not an affordability issue.

Speaker 1: But, you know, if those guys could move product without buying down, they would. But they're not. They're buying it down. So it tells me that, you know, you know, you know, 7% mortgages are both tough in terms of bringing supply to the market. And 7% mortgages are tough for consumers on affordability, and sort of really unlock demand.

Speaker 1: both the supply side and even some more on the demand side.

Speaker 1: mortgage rates in that five to five and a half percent is kind of what I'm really focused on. Now, again, we're going to do all right, even in a tough market. As you can see this quarter with our earnings, with our free cash flow, our ability to invest. But, you know, imagine our octane both on the.

Speaker 1: with the cost changes and some of the other innovations we're doing in a much, much more normal market, what that could look like. We get real excited about it, but I think that HomeBuilder actions gives us all a path to what really is moving.

Speaker 1: what consumers are willing to do. And I'm obviously rooting for the home builders.

Speaker 1: Yeah that's really helpful Ryan. Second question, so you've mentioned a few times you know California is one of your biggest markets. I guess one of the headlines we've all been seeing more recently is homeowners insurance companies pulling out of the state and as well as some other parts of the country.

Speaker 1: I guess any impact you're seeing on home sale activity in some of those markets and if it's not tangible at this point, I guess, is it a focal point of agents or buyers and sellers in those markets? Just kind of curious how you're thinking about this topic of home owners insurance and some of these bigger

Speaker 1: entities pulling out of different markets.

Speaker 1: Yeah, it's a great question and there's really kind of a tale of two cities. You know, Florida is not, even though, you know, Florida gets headlines on this issue, it's not something I'm hearing about from agents or franchisees. And, you know, it really just doesn't come up a lot. That doesn't mean we're not watching it.

Speaker 1: we do see a few more like

Speaker 1: properties there that are just hard to sell because they're not insurable.

Speaker 1: for the reason that you talk about. Now these tend to be pretty anecdotal. You know, I've talked to our, you know, Southern International Reality Leader about, you know, one, you know, in the last quarter, for example, but it is something we're watching. I mean, I think at the end of the day, you know.

Speaker 1: You know, the idea that any state in the US isn't going to have home insurance available is unlikely from just kind of a government to kind of market forces thing. But, you know, it's, it's I put it in a it's one of yet another kind of headwind in the California world, along with the taxes and other things.

Speaker 1: Whereas, Florida with its tax advantages, weather advantages, etc., it just doesn't really show up as a headwind. So it's on the radar, but there's probably some bigger issues on the radar when you look at the California versus Florida comparison.

Speaker 2: But again, more anecdotal, but enough anecdotal that I do notice.

Speaker 1: Got it. Okay, thank you very much.

Speaker 1: Got it. Okay, thank you very much. Thank you, Ryan.

Speaker 3: Your next question comes from John Campbell with Stevens Inc. Your line is open.

Speaker 4: Hey guys, good morning. Good morning, John . Hey, good morning. On the brokerage business, obviously, I mean, it's still a pretty tough operating environment. I think revenue is down 400 million or so year over year, but you only saw 21 million drop in EBITDA for the brokerage segment. I know that's obviously a very high variable cost business. You had

Speaker 4: a little bit less splits, growth, pressure. But clearly there's a lot of self-help there. Charlotte, it sounds like you spoke to this pretty extensively on the cost-saves, and I think that is very helpful as far as the disclosures of kind of the breakout of savings-by segment. But my question here is, if you could maybe talk to the degree of the remaining cost-saves throughout 2020.

Speaker 4: and kind of how much of that is going to be directed or geared towards the brokerage segment, and then just maybe more nearer term, do you feel like you've got the business cost-wise in a good spot where if you saw maybe even modest brokerage growth, you could get back to margin expansion there?

Speaker 5: So I'll take the last part first. Yeah, and it kind of goes to the answer I gave earlier. Yes, I do believe that because we are at a pretty historically low housing market, these are sizable cost savings of which most are permanent and they will definitely benefit us when we get to more normalized housing markets.

Speaker 5: and sort of occupancy and other things. And because of that, yes, a lot of the cost savings this year are gonna come out of brokerage. Now we're not giving updated 2026 numbers this quarter. You'll likely hear more about that from me later this year. But just basis where the costs are, we're constantly mining across the business and the majority of the costs sitting in.

Speaker 5: make our business more efficient. And also at the same time, a lot of the stuff that we're working on now delivers even better experience for our agents and our customers. So more to follow on that, but happy that folks are able to see sort of the benefits of the actions.

Speaker 5: of the magnitude of what we've done. You can see that on the different operating and G&A and marketing line items in the P&L.

Speaker 4: Okay, that's very helpful. And then back on the legal expenses, Ryan, you pointed this out, but you can definitely see the add-backs in the, I guess, one of the late tables in the press release, I think the senior secured leverage ratio table. You can see it there. You guys are obviously not adding that back to operating EBITDA. If you look over the last 12 months, there's been a pretty substantial step up relative to maybe a year and a half, two years ago.

Speaker 5: there were no incremental reserves that we did. Now there's always stuff year over year and you know I'm sure we had something in the prior year that we're lapping but nothing material so it's really the absence of incremental new new spend. And then there's other... John , remember yeah there's that line item has non-cash long-term incentives comp that's got...

Speaker 2: other non-cash charges, it's got other extraordinary non or unusual recurring charges. So yeah, the number in that table went down a little bit from last quarter. It's just a few things rolling off from the year before, but it's not a change in the core thing that we were talking about.

Speaker 2: You know, as Charlotte said, litigation costs unfortunately is one of the costs headwinds we do actually have still given the upcoming trials.

Speaker 2: As Charlotte said, litigation costs unfortunately is one of the cost headwinds we do actually have still given the upcoming trials. Okay. And then just one more on the legal side.

Speaker 4: Ryan, I know you guys can't talk much there, so definitely don't want you to step out of bounds. But I saw the update from the BRITE MLS, which is the nation's second largest MLS, but I think they're named as a co-conspirator in the moral case, but it sounds like they are going to basically kind of diverge from the NAR rule, the participation rule. So I was...

Speaker 4: I'm curious, again, don't want you to try to step out of bounds here, but is there official messages coming from you guys corporate-wise as far as a stance or a message on the participation rule or maybe even more specifically what Bright MOS is proposing to do?

Speaker 2: We're not going to talk about what Bright's doing, but look, John , we're on public record.

Speaker 2: that we don't think NAR's mandatory participation rule is necessary.

Speaker 2: period. Like we're literally on public record about that. So, you know, and we've been on public record for a while about that. So, you know what, you know, you know, what, what everybody should know is that we have that strong view and we haven't been shy about about sharing it. And so, um,

Speaker 2: We've still got these trials and we're going to defend them vigorously and everything, but we have a view on that specific thing and it's a public view, so I don't mind commenting on it here. We don't think the rules necessary for markets to operate well. We think...

Speaker 2: agents for both buyers and sellers create real value for the consumer.

Speaker 2: You know, there's geographies in the US that don't have that rule and they operate really well for consumers, for agents, for homeowners, and so we just don't think NAR's mandatory rule is necessary. And again, we're on public record.

Speaker 6: Thanks for the call. We didn't agree with you. Thank you. There are no further questions at this time. With that, we thank you for joining us today. This concludes the conference call and you may now disconnect.

Speaker 7: four four