Company: HOUS
Filing Date: 2025-02-25
Form Type: 10-K
Source: 0001398987-25-000020
Chunk: 70

Company: Anywhere Real Estate Inc.
Filing Date: 2025-02-25
Form: 10-K
Item: Item 1A
Chunk 70
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 with respect to the manner in which broker commissions are communicated, negotiated and paid, such as those resulting from the NAR Settlement discussed under "Item 7.—Management's Discussion and Analysis—Current Business and Industry Trends"), the rise of certain competitive brokerage or non-traditional competitor models, an increase in the popularity of discount brokers or other utilization of flat fees, rebates or lower commission rates on transactions as well as other competitive factors. Average homesale price and geographic mix have and could continue to contribute to declines in the average homesale broker commission rate, as higher priced homes tend to have a lower broker commission rate. 

The average homesale broker commission rate for a homesale transaction is a key determinant of our profitability in Owned Brokerage Group and Franchise Group. Meaningful reductions in the average broker commission rate, including the average buy-side commission rate, have and could continue to negatively affect, or could increasingly negatively affect, our revenues, earnings and financial results.

See also the below risk factor captioned “Changes to industry rules or practices that prohibit, restrict or adversely alter policies, practices, rules or regulations governing the functioning of the residential real estate market could materially adversely affect our operations and financial results”.

Continued erosion of our share of homesale brokerage commissions has and could continue to negatively affect, or could increasingly negatively affect, our financial results.

In addition to decreases in average homesale broker commission rates, continued erosion of our share of such homesale brokerage commission income (commonly referred to as our 'split' as homesale brokerage commissions are split between the broker (Owned Brokerage Group) and the independent sales agent in accordance with their applicable independent contractor agreement), as a result of changes to industry rules or practices, or otherwise, could continue to negatively affect our profitability. 

Intense industry competition for agents combined with our strategic emphasis on the recruitment and retention of independent sales agents has placed and is expected to continue to place upward pressure on our agent commission expense. This trend has negatively impacted and could continue to negatively impact our profitability. Other market factors, including, but not limited to, competitors with access to outside capital that pursue increases in market share over profitability, models that operate at lower margins, including virtual brokerages and brokerages that operate in a more virtual fashion or reduced cost platforms, and listing aggregator concentration, market power and expansion into new ancillary products and services and leveraging their market power to channel consumers into those products and services, are expected to further erode our share of homesale brokerage commission income.

If independent sales agents affiliated