Q3 2024 Anywhere Real Estate Inc Earnings Call

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Speaker Change: And our commission rates were down four to five basis points. This quarter four points in one business five points in the other business.

Speaker Change: And that's actually a little less than last quarter, and we gave a bunch of commentary last quarter on what was driving that and we haven't seen anything change. So you can go back and look at that commentary but.

Speaker Change: We're going to keep leaning into the transparency of just published these things every single quarter. So you can see and again the magnitude of impact that we saw in the quarter overall was four to five basis points and there were a bunch of factors that drove that.

Speaker Change: Many of which we listed last quarter as the prior year comp issue that we've talked about in the second quarter and then also a mix issue.

Speaker Change: Okay, great. Thank you.

Yeah.

Speaker Change: Our next question comes from the line of Tommy Mckeith joined with <unk>. Please go ahead.

Speaker Change: Hey, good morning, guys. Thanks for taking my questions.

Speaker Change: It might be helpful. Even to dig in on those October trends a little bit on.

Speaker Change: Week by week, or maybe first half versus second half basis, obviously mortgage rates are very impactful on home sale demand.

Speaker Change: So can you maybe talk about what you saw kind of over the course of the month given that the 30 year mortgages is back up above six 5% now yeah I got to be honest man I was surprised what are the reasons I was so positively surprised by October is how mortgage rates kicked up there at the end of September right and just.

Speaker Change: Just creating a little more headwind into into what already had been a pretty tough market, but we saw it be pretty similar over the whole four weeks, we didn't see a lot of week to week variation in that in that Tommy and again I was I was more worried the September uptick was going to lead to a bigger drop instead things have kind of gone the other way.

Speaker Change: And then it's been interesting geographically like I mentioned, Florida as improving really in October, California is having a really nice October.

Speaker Change: New Jersey is having a really nice October North Carolina, Massachusetts.

Speaker Change: Sometimes you get these different regions have different performance issues kind of thing going on but in October so far it's been pretty much across the board Northern States Southern states eastern Western.

Speaker Change: <unk> Blue all those kind of different cuts you could do.

So.

Speaker Change: That's part of the reason I'm I'm pretty excited by that optimism that it's a little more widespread even in the face of those higher mortgage rates.

And.

Speaker Change: And so.

Ryan Schneider, Alicia Swift

Higher to higher than we would've anticipated.

Speaker Change: Both of those in total are material enough for me to call them out in the script, but we're not really disclosing the exact amount.

Yeah.

Okay.

Fair enough. Thank you for that Charlotte and then.

Okay, fair enough. Thank you for that, Charlotte.

Speaker Change: Just kind of back up to the higher level on the commission rates. So.

Speaker Change: Obviously, you guys will stay transparent as you mentioned and that's super helpful.

Speaker Change: obviously you guys will stay transparent as you mentioned and that's super helpful.

Speaker Change: And as you mentioned I guess outside of mix Commission rates are really really not falling.

Speaker Change: And as you mentioned, I guess, outside of MIX, the commission rates are really not falling. But I guess, what are you actually hearing on the ground today around, I guess, how buyer agents are approaching the buyer agreements? How has that evolved since this went down and kind of hearing anything around consumers pushing back at all? Just any kind of on-the-ground market color there would be helpful. Thank you. I've been so proud of our agents.

Speaker Change: But I guess what are you actually hearing on the ground today around I guess, how by our agents are approaching the buyer agreements how has that evolved since this went down and kind of hearing anything around consumers pushing back at all just any kind of on the ground market color. There would be helpful. I've been so proud of our of our agents we.

Speaker Change: We rolled out five different buyer agreements may have been a little overkill, but we thought it was the right thing to do.

Speaker Change: may have been a little overkill, but we thought it was the right thing to do.

Speaker Change: Emphasizing two things these things have to be simple.

Speaker Change: Emphasizing two things. These things have to be simple, you know, you got to be able to absorb them on your phone, in the driveway, wherever kind of experience, and they got to be flexible.

Speaker Change: Got to be able to absorb them on your phone in the driveway wherever kind of.

Speaker Change: Experience and they've got to be flexible.

Speaker Change: We rolled out agreements that just let you tour house with an agent we rolled out agreements on the other end of the spectrum that is six months long to go down the journey of finding a home and things and then some single house or multi house kind of agreements kind of in between.

Speaker Change: Right, we rolled out agreements that just let you tour a house with an agent. We rolled out agreements on the other end of the spectrum that are six months long to go down the journey of finding a home and things and then some, you know, single house or multi-house kind of agreements kind of in between.

Speaker Change: The six month, let's go find the great home for our family agreement together, that's by far been the biggest one getting used by far.

Speaker Change: The six-month let's go find the great home for our family agreement together That's by far been the biggest one getting used

By far.

Speaker Change: And we love that right because it tells me that our the consumers are still choosing to work with our agents deeply to help them find the next home that's awesome for their family and that they value them.

Speaker Change: And we love that, right? Because it tells me that the consumers are still choosing to work with our agents deeply to help them, you know, find the next home that's awesome for their family and that they value them.

Speaker Change: So we've really been excited by how our agents have leaned into articulating their value building their relationship and actually delivering over the long term for folks.

Speaker Change: So we've really been excited by how our agents have leaned into articulating their value, you know, building their relationship and actually delivering over the long term for folks.

Speaker Change: And the fact that that agreement has been used more than.

Speaker Change: And the fact that that agreement's been used more than, you know, the other four, you know, in a meaningful, by a meaningful amount, makes me incredibly excited, because I'm not sure I would have predicted that going in, and that's part of the reason we rolled out the five agreements.

Speaker Change: The other four in a meaningful a by a meaningful amount makes me incredibly excited because I'm not sure I would have predicted that going in and that's part of the reason we rolled out the five agreements so.

Speaker Change: So that's what we're hearing.

Speaker Change: So, um, you know, so that's what we're hearing. Um, you know, it's early. So nobody's, you know, assuming that we're, we're, we're, we're done with that journey. But boy, we like those early results. And again, the fact that people are continue to.

Speaker Change: It's early so nobody is assuming that we are done with that journey, but boy, we like those early results and again, the fact that people are continuing to.

Speaker Change: Want to work with our great agents and do it on that kind of long term exclusive basis and willing to sign their name to it feels great.

Speaker Change: work, you know, want to work with our great agents and do it on that kind of long-term exclusive basis and willing to sign their name to it, that feels great. You know, I feel really, really good at it. And then I think, you know, I did give us credit in the script for trying to.

Speaker Change: I feel really really good at it and then I think I.

Speaker Change: Did give us credit in the script, we're trying to.

Speaker Change: Prepare people to navigate it well and I think we've gotten feedback that our folks feel really well positioned especially relative to a lot of competitors who have done that.

Speaker Change: You know, prepare people to navigate it well, and I think we've gotten feedback that our folks feel really well positioned, especially relative to a lot of competitors, to have done that.

Speaker Change: Excellent Thanks, Brian and good luck guys. Thank you. Thank you.

Excellent. Thanks, Ryan. Good luck, guys. Thank you.

Speaker Change: Again, if you would like to ask a question. Please press star one.

Speaker Change: Again, if you would like to ask a question, please press star 1.

Speaker Change: Our next question comes from the line of John Campbell with Stephens. Please go ahead.

Speaker Change: Our next question comes from the line of John Campbell with Stevens. Please go ahead.

John Campbell: Good morning.

Good morning.

John Ryan: John Ryan.

Speaker Change: You guys have gotten a couple of questions on the average broker commission rate.

Speaker Change: Ryan, hey, you guys, you've gotten a couple questions on the average broker commission rate.

Speaker Change: Just to put maybe a finer point on that I mean, obviously the October closing opening activity was really really good.

Speaker Change: Just to put maybe a finer point on that, I mean obviously the October close and open activity was really, really good. I don't know how much insight you have into that order activity, but as far as you can tell, how did the average broker commissioner rate look within that mix? Is it holding steady relative to what you saw in the quarter?

Speaker Change: How much insight you have into that order activity, but as far as you can tell how did how did the average broker commission rate look within that mix is it holding steady relative to what you saw in the quarter.

Speaker Change: Yes, I actually don't have that data yet to be honest. So I don't I don't have anything to give to you on that but.

Speaker Change: Yeah I actually don't have that that data yet to be honest so I don't I don't have anything to give to you on that but you know I've

<unk>.

Speaker Change: You know, you know, we, you know, the numbers we printed for the quarter are pretty consistent across the quarter of Q3 You know, so whether that continues to trend for October we'll see but we're we feel good

Speaker Change: The numbers, we printed for the quarter are pretty consistent across the quarter of Q3.

Speaker Change: So whether that continues a trend for October we'll see but we're we feel good.

Speaker Change: Okay, that's fair.

Speaker Change: Then on splits I mean, obviously you guys have done a good job of moderating and kind of holding that steady it looks like over the last two and a half years I'm curious about how much of that stable stabilization has been due to just a more reasonable competition versus kind of a follow up on housing I know you probably have less capping and whatnot I guess, maybe another way to frame. It what do you feel like the underlying split.

Speaker Change: Okay, that's fair. And then on splits, I mean, obviously you guys have done a good job moderating and kind of holding that steady, it looks like over the last two and a half years. I'm curious about how much of that stabilization has been due to just a more reasonable competition versus kind of the fallout in housing. I know you probably have less capping and whatnot, so I guess maybe another way to frame it, what do you feel like the underlying splits, you know, are going to look like with some degree of a housing recovery at some stage?

Speaker Change: Are going to look like.

Speaker Change: Some degree of a housing recovery at some stage.

Speaker Change: There's a couple of different variables. There I think you called out competition I do think and requires more stable competition and even just different business models in real estate competing with each other versus with us necessarily helps the competitive lens of bad. So I think competition is definitely a variable.

Speaker Change: Yeah, there's a couple different variables there. I think you called out competition. I do think, you know, in part more stable competition and even just different

Speaker Change: models and real estate competing with each other versus with us necessarily, you know, helps the competitive lens a bit. So I think competition is definitely a variable. And then as the housing market recovers, you know, there's a couple different variables to like

Speaker Change: Then as the housing market recovers.

Speaker Change: Couple of different variables to make sure as volumes go up some of our agents will go up at the rate table. That's one thing that's offsetting that could be.

Speaker Change: Sure, as volumes go up, some of our agents will go up their rate table. That's one thing, but offsetting that could be, you know, agent mix coming back down a little bit as more transactions come into the pipeline. So, you know,

Speaker Change: Agent mix coming back down a little bit as more transactions come into the pipeline.

No.

Speaker Change: I love that 10 quarters kind of as a trend and so if we've been able to navigate that well for the for the last 10 quarters I think we're feeling much better about keeping it in this more normalized range in the future, but those are some of the push points for sure competition is probably the single biggest one.

I love that 10 quarters kind of is a trend.

Speaker Change: And so, you know, if we've been able to navigate that well for the last 10 quarters, I think we're feeling much better about, you know, keeping it in this more normalized range in the future. But those are some of the push points for sure. Competition is probably the single biggest one.

Speaker Change: Okay, that's great to hear thanks Robyn.

Okay, that's great to hear. Thanks Charlotte.

Speaker Change: We have no further questions at this time with that we will conclude today's conference call. Thank you all for your participation you may now disconnect.

Speaker Change: We have no further questions at this time. With that, we will conclude today's conference call. Thank you all for your participation. You may now disconnect.