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Profits Halved, Brokerage Giant Anywhere Looks at Commissions

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From left: Anywhere Real Estate’s Ryan Schneider and Charlotte Simonelli (Getty, Anywhere Real Estate)

A difficult housing market cut Anywhere’s third-quarter profit in half from last year, and company executives said on the earnings call that they expect the market to slow further.

This could mean more headcount cuts and fee splitting for some brokers.

Real estate conglomerate formerly known as Realogy, whose flagship brands include Corcoran, Sotheby’s International Realty and Coldwell Banker, reported quarterly revenue of $55 million, down from $114 million in the same period last year.

Transaction volumes are down 17%, and Anywhere CEO Ryan Schneider has warned it could drop to 25% by the end of the year.

“Today’s biggest challenge is the rapidly deteriorating housing market,” Schneider said. It’s not like home prices are plummeting, but there are far fewer sales than he did a year ago.

Rising interest rates and inventory shortages constrained sales, reducing Anywhere’s revenue by nearly $380 million compared to the third quarter of 2021. Cost reduction by companies including mass layoffs last quarter.

The company is “starting to identify structural savings” it outlined earlier this year, Charlotte Simonelli, the company’s CFO, said on a conference call that it plans to cut about $150 million from its budget by the end of the year. I said yes.

Anywhere said the move could be possible because other brokerages offer less competitive packages, Schneider said.

“I think the reality is that when you’re in a recession, the competitive landscape is improving because you see different people’s strengths and weaknesses exposed and you see a lot of competitors exit,” Schneider said. I was. “Given our financial performance, we see a return or flight to quality.”

One such competitor is Compass, which over the past decade has disrupted established companies by offering splits of equity and high fees to lure top agents.but the compass Stop offering equity We are reducing the split we give to brokers as we aim to make a profit the first time.

According to Anywhere, the fee split is not a vehicle that the company can freely withdraw as it will change depending on market conditions. During the call, analysts asked if the percentage of commissions shared by the firm could drop next year if transactions decline. No,’ he replied.

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