Anywhere says bring on the broker commission reckoning

With sweeping regulatory changes on the horizon for residential real estate, Anywhere Real Estate is claiming sunny skies ahead. 

The parent company of Sotheby’s International, Corcoran and Coldwell Banker counts its early agreement to settle landmark antitrust lawsuits and its stable of luxury brokers as advantages in navigating impending shifts in broker commissions and practices, executives said during the firm’s first quarter earnings call on Thursday. 

The firm has been touting its deal since September, when it pulled out of the legal action about a month before the first of the cases, known as Sitzer/Burnett, went to trial and more than six months ahead of the National Association of Realtors’ $418 million proposed settlement. 

Under the terms of its deal, Anywhere agreed to pay $83.5 million and change some of its business practices.  

With an agreement already on the table, Schneider said the company has already discussed strategies for implementing buyer’s agreements and guiding agents on commission negotiations in the absence of compensation offers on multiple listing services — all of which are included in the rule changes NAR included in its proposed settlement.

“We actually had plans of how we thought buyer’s agreements could be a part of our future way back in September,” Schneider said. “Buyer agency agreements are great. I think they’re going to help us actually lock in some business that probably slipped through our fingers beforehand.”

Anywhere closed last quarter with a net loss of $101 million, down from the $138 million it lost in the first quarter of 2023 and the $107 million lost in the previous quarter. 

The firm reported an operating EBITDA — earnings before taxes, interest, taxes, depreciation and amortization — of negative $17 million, up from the $52 million loss in the same period last year. 

Company executives said the firm was on track to reach its $100 million cost reduction goal by the end of this year after saving $30 million in the first quarter — and the optimistic forecast didn’t end there. 

Schneider said it’s too soon to speculate on the exact fallout from commission and negotiation rule changes proposed by the industry’s leading trade group, but he anticipates more innovation and experimentation from brokerages, residential listing platforms and other third-party stakeholders.

“We all have a lot of work to do in terms of bringing things to life, especially in markets where they’re going to be a shock to the system,” Schneider said. “I like our assets relative to others to go through [these changes].”

After last year’s market slowdown already pushed several brokers to the sidelines, Schneider said he expects lower-producing agents to continue leaving the industry with the introduction of a new normal for commission negotiations — and brushed off questions about a reduction in agent headcount hitting the company’s bottom line. 

“In terms of affecting the economics, I don’t lose sleep over it yet,” Schneider said. “We’re also excited about potentially the cost we put into supporting non-productive agents going down. It’s not free to have [these agents] in your ecosystem.”

Schneider predicted an increase in brokerage consolidation with additional pressure on the commission side of the business, though he said Anywhere was “incredibly cautious” in considering new acquisitions given the current macroeconomic environment. 

“Brand matters in our industry,” he said. “The bigger scale players are going to have a lot of advantage here.”

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