With
a
67%
annual
increase
in
agent
count
to
16,680
agents
during

the
first
quarter
of
2024,
it
is
no
surprise
that


The
Real
Brokerage
also
recorded
an
86%
annual
increase
in
revenue
to
nearly
$201
million.

The
uptick
in
agent
count
contributed
to
a
74%
yearly
jump
in
transaction
count
to
19,032
sides,
good
for
a
total
sales
volume
of
$7.5
billion
and
an
88%
year-over-year
increase.

“I
am
extremely
pleased
with
our
results
this
quarter
and
am
looking
forward
to
navigating
the
changes
ahead
from
a
position
of
strength,”
Real
CEO
Tamir
Poleg
told
investors
and
analysts
during
the
firm’s
Q1
2024
earnings
call
Tuesday
morning.

The
coming
changes
that
Poleg
referenced
are
the
business
practice
changes
outlined
in
the


National
Association
of
Realtors’
(NAR)

commission
lawsuit

settlement
agreement.
Many
in
the
industry
believe
these
changes
will
cause
industrywide
agent
attrition,
which
could
clearly
put
a
damper
on
Real’s
impressive
agent
count
growth.

“The
NAR
settlement
requires
some

mechanical
changes
to
industry
practices,
which
are
entirely
driven
by
training,
and
when
it
comes
to
our
agents,
we
are
a
training-first
company,”
Real
President
Sharran
Srivatsaa
said.
“That
means
we
believe
a
skilled
agent
will
outperform
an
unskilled
agent
10
to
1.

“For
over
a
year
now,
we’ve
been
training
out
agents
on
our
proprietary
Buyer
Mastery
Program,
equipping
them
with
the
skills,
tools
and
materials
they
need
to
help
serve
clients
in
the
post-NAR-settlement
world.”

Real
executives
also
noted
that
the
firm’s
recently
launched
Private
Label
and
Pro
Teams
initiatives
are
helping
Real
attract
even
more
agents
and
teams.
Under
the
Private
Label
programs,
teams
and
independent
brokerages
can
join
Real,
use
all
of
the
firm’s
tools
and
resources,
and
maintain
their
own
brand
identity.
With
Pro
Teams,
a
team
or
brokerage
firm
is
able
to
maintain
its
own
internal
economics
and
commission
models.

According
to
Real,
these
offerings
have
been
especially
appealing
to
independent
broker-owners
and
team
leaders
in
light
of
the
NAR
settlement
agreement.

“What
we
have
found
is
that
numerous
independent
brokerages
are
concerned
about
the
potential
liability
and
regulatory
impact
ahead,”
Srivatsaa
said.
“Many
have
approached
us
to
explore
conversations
about
coming
on
board.
Consequently,
our
pipeline
of
100-plus
agent
teams
considering
making
the
leap
to
Real
is
at
an
all-time
high,
and
we
have
high
expectations
for
Private
Label,
along
with
our
Pro
Teams
infrastructure,
to
be
a
differentiating
factor
in
converting
this
pipeline.”

In
addition
to
these
offerings
to
attract
agents
and
teams,
Poleg
also
highlighted
the
firm’s
“agent
economics”
as
something
that
could
help
continue
to
drive
conversions.

“By
our
math,
in
2023,
we
paid
out
the
highest
percentage
of
revenue
in
commission
splits
and
revenue
share
than
any
of
our
direct
public
peers,”
Poleg
said.
“Given
that
agents
are
economically
motivated
business
owners,
those
concerned
about
future
commission
rates
would
find
that
affiliating
with
any
brokerage
other
than
Real
could
mean
missing
out
on
significant
earnings
.
…
We
anticipate
the
trend
of
agents
migrating
from
traditional
high-cost
brokerages
to
more
efficient
high-value
models,
like
ours,
will
likely
accelerate
in
the
years
ahead.”

Poleg
also
took
time
during
the
call
to
address
Real’s
recently
announced

settlement
of
the

commission
lawsuits.
While
the
settlement
and
the
litigation
leading
to
it
resulted
in
$9.9
million
in
expenses
—
which
the
company
said
contributed
to
its
$16.1
million
net
loss
for
the
quarter
—
Poleg
was
still
pleased
with
the
decision
to
settle.

“We
believe
this
decision
was
in
the
best
interest
of
our
company
and
our
shareholders,
allowing
us
to
focus
our
time
and
resources
on
building
the
future,”
Poleg
said.

As
the
brokerage
firm
looks
ahead,
in
addition
to
its
Private
Label
and
Pro
Teams
programs,
executives
were
also
optimistic
about
the
future
of
Real’s

title
and

mortgage
businesses.
Overall,
revenue
from
Real’s
ancillary
businesses
rose
104%
annually
in
Q1
2024
to
$1.5
million.
The
firm’s
title
business
revenue
grew
33%
year
over
year
to
$795,000
and
its
mortgage
business
revenue
soared
by
427%
to
$696,000.

“These
ancillary
businesses
typically
command
gross
margins
that
are
six
to
eight
times
higher
than
over-average
brokerage
gross
margin,
and
we
are
pleased
that
the
growth
initiatives
we
have
implemented
are
becoming
more
apparent
in
our
results,”
Poleg
said.
“Importantly,
based
on
the
strength
we
are
seeing
in
both
business
lines,
we
continue
to
expect
overall
ancillary
revenue
growth
to
significantly
outpace
growth
in
our
core
brokerage
business
in
2024.”

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