The Real Brokerage (NasdaqCM:REAX) 2025 Conference Transcript

Summary of The Real Brokerage Conference Call Company Overview - Company: The Real Brokerage (NasdaqCM:REAX) - Date: November 18, 2025 - Speaker: Tamir Poleg, CEO and Founder Industry Insights - Current Market Conditions: The real estate market has been in a trough for the past three years, affecting all participants including NAR, brokerages, and lenders [8][218] - Consumer Experience: The current process of buying and selling homes is not optimized, with potential improvements needed to enhance consumer experience [10][13] - MLS Structure: There is a concern that moving away from centralized MLSs could lead to a fragmented market, negatively impacting consumer experience [24] Key Points on Buyer Agents - Value of Buyer Agents: There is no debate on the value provided by buyer agents, despite ongoing discussions about commission structures [26][28] - Commission Rates: Average commissions remain unchanged, with 2.6% per side for sales in the $400,000 price range [37][40] Recruitment and Growth - Agent Recruitment: The Real Brokerage added over 7,000 agents in 2025, continuing a trend of rapid growth despite market conditions [49][81] - Market Dynamics: Small to medium independent brokerages are seeking to join larger organizations to remain competitive [51][52] - Team Dynamics: Teams are becoming the optimized business model in real estate, with more transactions being closed by teams than individual agents [58][61] Technology and AI Integration - AI Development: The company is focused on integrating AI to enhance agent efficiency and improve consumer interactions [96][97] - Leo AI Concierge: A new AI tool, Leo, is designed to assist agents and consumers throughout the home buying process, providing 24/7 support [106][112] - Agent Empowerment: The goal is to transform agents into "super agents" by automating mundane tasks, allowing them to close more transactions [123][125] Market Outlook - Interest Rates and Affordability: The current housing market is characterized by low sales (4 million vs. historical 5.2 million) due to affordability issues driven by mortgage rates and home prices [218] - Potential Benefits of Lower Rates: If mortgage rates decrease, it could lead to increased transactions for agents, but the company is not relying on this for growth [219] Financial Metrics - Gross Margins: The brokerage side has a gross margin of about 9%, while title services have 83% and mortgage services have 50% [222] - Focus on Ancillary Services: The company aims to increase margins by attaching more title and mortgage services to transactions [224] Competitive Landscape - Comparison with Redfin: The Real Brokerage does not compete directly with Redfin as their agent models differ significantly [213] Conclusion - The Real Brokerage is positioned for growth through a focus on technology, agent support, and adapting to market conditions, while maintaining a strong emphasis on consumer experience and agent empowerment.