RE/MAX Is Predicting Banner Year With Tech, Mortgage Investments
After RE / MAX reported solid first quarter results on Thursday, RE / MAX has turned its attention to the future of its best years in its 48-year history.
“For the eleventh time in a row, REMAX agents have sold competing agents more than two for one on average,” said CEO Adam Contos in a post-earnings call on Friday. “RE / MAX agents have an average of 16 transaction pages compared to the average of all other competitors at 7.3.”
“That says a lot about the quality of our franchisees, the quality of the agents they hire, the quality of our tools and services, and most importantly, the quality of the customer experience that you can expect from REMAX around the world,” he added. “That momentum continues today and we look forward to sharing more good news throughout 2021.”
In the first quarter, RE / MAX increased sales 2.9 percent to $ 72.3 million and remained profitable with net income of $ 1.1 million. The company also increased its total agent count by 6.4 percent to 140,214 agents, with most of the growth in international markets outside of the United States and Canada.
The number of US agents actually fell by 0.6 percent. However, Contos said he was confident the real estate market is booming, and RE / MAX’s continued investments in technology, training and agent use will fuel the growth of the company’s domestic agent count.
“In many markets, buyers try to bid on the home they want, often above list price, and this competition creates an attractive environment for sellers,” he said, while homes sell on average three weeks faster than 2020. “The good news is incredible demand and large numbers of transactions.”
“RE / MAX agents use their industry experience to help their customers get the best result. Our partners are optimistic that they can have an even better year than 2020, ”he added.
On the technical side, Nick Bailey, RE / MAX’s chief customer officer, said the brokerage is expanding its Booj platform to Canada. This is an important key to RE / MAX’s international growth. “It’s an important step that we’ve been working on for some time. We believe this will open the gates for global tech expansion and mark another important milestone in our rich history, ”he said.
The company announced that it will continue to improve its existing technology, data, and marketing platforms, introduce additional training and education tools, and enhance its overall value proposition with agents and brokers through unique offerings, similar to the company’s newly minted Agent Healthcare Plan offerings with Aetna.
Finally, the company said growth at Motto Mortgage contributed to agent growth in the first quarter.
“The acceleration of the growth of the Motto Mortgage network and the diversification of Motto properties across a variety of leading real estate brands is exciting and inspiring,” said Ward Morrison, president of Motto Mortgage. “We are currently gaining market share in the brokerage channel as more and more real estate agents and teams recognize the value of an additional mortgage deal and take advantage of the franchise model.”
With other mortgage companies forecasting a slowdown this year due to rising interest rates and subdued refinancing activity, Motto Mortgage is well on its way to doubling its loan volume year over year and opening 50 new offices by the end of 2021, according to Morrison.
“Although many industry experts are forecasting the slower year 2021 when the refi boom subsides, we believe we have a good chance of reaching our goal of doubling last year’s volume partly due to Motto’s unique position in the shopping market,” he said. “To put it simply: originators of model loans are often tied directly to a purchase pipeline controlled by real estate agents.”
The company ended the solicitation with forward-looking statements for the second quarter and fiscal year 2021. In the second quarter, RE / MAX expects to increase agent count growth by 7 to 8 percent year over year. Thanks to a blistering home buying season, the company expects revenue in excess of $ 78 million on adjusted EBITDA of $ 25.5 million to $ 28.5 million.
An increase in the number of agents by 5 to 6 percent is expected for the 2021 financial year. Revenue is expected to grow to over $ 310 million as Adjusted EBITDA is between $ 103 million and $ 107 million.
RE / MAX stock has not yet seen a post-earnings rally (NYSE: RMAX). The company’s stock traded in the $ 37 area for most of Thursday, closing at $ 37.12. However, the company’s stock opened at $ 35.98 – a 3.07 percent decrease from the previous day. As of Friday morning, RE / MAX’s market cap was just over $ 700 million.
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