eXP’s Glenn Sanford is ‘concerned’ about the commission lawsuit’s impact on buyers
eXp World Holdings executives did not mention the Sitzer/Burnett verdict in their third quarter earnings presentation on Thursday, but analysts wanted to hear their thoughts on the potential implications.
In response, Glenn Sanford, the founder and chief executive of the company, which is parent to eXp Realty, expressed concern about low-income homebuyers who may not be able to afford representation “if the rules change too much.”
“I actually started out as a buyer’s agent myself… and I see buyer’s agency as being a very valuable tool for buyers,” Sanford said during the Q&A session. “I’m concerned, quite frankly, about what this might mean to buyers who may not be able to afford representation if things change up too much.”
On Tuesday, shortly after the jury verdict was released, Michael Ketchmark, the lead attorney for the plaintiffs, filed another lawsuit on behalf of three new home sellers, known as the Gibson case. The new plaintiffs claim to have “suffered from a real estate industry conspiracy that inflated agent commissions,” HousingWire previously reported.
This new case targets the National Association of Realtors and brokerages Compass, eXp World Holdings, Redfin, Weichert Realtors, United Real Estate, Howard Hanna and Douglas Elliman. The case targets the defendants across the United States and the plaintiffs would likely be seeking tens of billions of dollars in damages.
‘Outperformed’ the market
Despite a painfully slow real estate market, eXp World Holdings held strong financially in the third quarter, generating $1.2 billion in revenue (a 2% decrease year over year), and a profit of $1.3 million (down from $4.4 million in Q3 2022).
In the words of Sanford, eXp “outperformed the market.”
Transaction sides increased 1% to 139,480 year over year, but sales volume declined 4% to $48.5 billion.
Sanford spoke about the immense affordability challenges in the current market, with mortgage rates touching 8% and home prices increasing. “Overall, transactions were down over 15% year-over-year during the third quarter in the industry and nearly 20% year-to-date,” he said.
But at eXp Realty, transactions were down 8.6% year-over-year in the third quarter, which was 43% better than the industry, Sanford said.
International Realty was the best performing segment again in Q3
When broken down by segments, International Realty revenue increased about 47% year-over-year from $10.15 million to $14.90 million. Meanwhile, North American Realty revenue fell by 2% year-over-year to $1.20 billion.
Across its 24 global markets, agent count grew 5% compared to Q3 2022 to more than 89,000 agents.
