While it might seem incredibly complicated to guide both owned brokerages and franchisees through the National Association of Realtors’ (NAR) nationwide commission lawsuit settlement agreement, Anywhere Real Estate views having both models under its umbrella as a blessing.
“The beauty of a franchise network is it is not just us looking out across our business that we feel compelled to run and make all the decisions — we have this back and forth, where franchisees also inform us, and I think that is a real strength of a franchise organization,” said Liz Gehringer, the president and CEO of Anywhere Franchise Brands.
“But we are also able to share the practices that we are using in our owned brokerage as well, and because we are a large-scale business, we can offer those bigger perspectives on growing footprint or simplification of practice or talent plans.”
During Anywhere’s second-quarter 2024 earnings call, CEO Ryan Schneider shared some of the details of how company leaders are helping the firm’s owned brokerage operation prepare for the settlement-mandated business practice changes, which are set to go into effect on Saturday.
“While we expect there to be challenges and uncertainty as these complex changes are implemented,” Schneider said, ”there is an opportunity for Anywhere and our agents and franchisees to embrace the future with confidence and differentially succeed — something we’ve been focused on delivering for our agents and franchisees since we announced our settlement in Q3 of 2023.”
He noted that Anywhere is a big fan of the soon-to-be mandatory buyer agency agreements and the transparency they offer consumers.
“Anywhere is committed to a thoughtful rollout of buyer agreements, with two core concepts guiding our approach. The first is simplicity. Buyer agreements must be clear, concise and free of legal jargon,” he said. “So, for example, if the agreement cannot be understood and executed electronically in just a few minutes before showing a home, it’s too complex. The other principle is flexibility. Consumers and agents will likely want different options for buyer agreements depending on the scenario.”
Some of these scenarios that Schneider and Anywhere envision involve consumers and agents wanting agreements that only cover a home tour, buying a specific home or a “multi-month journey to find the right home.”
Due to this, Schneider said that Anywhere has created multiple buyer agreement templates, allowing agents to select the version that best fits the needs of their client. He also noted that Anywhere would be displaying offers of buyer broker compensation on its owned brokerage websites.
“If there is a change in how inventory is managed in our industry, we’re going to be the No. 1 beneficiary of it, because across our six brands and our networks, we have by far the most,” Schneider said when discussing the rationale behind Anywhere’s approach to sharing information about compensation.
“So, I don’t have a crystal ball, but I think we’ve got a little bit of a track record of being more thoughtful about this than most people, whether it’s in terms of how we approach the litigation and the differential success there, or what we’re doing now to position our agents and franchisees to do better. And kind of what happens with our inventory, no matter how the market evolves, we’re going to be in the advantaged position with our scale.”
While Anywhere executives can issue top-down policies for their owned brokerage operations, that approach won’t work for its independently owned franchises. But that doesn’t mean the company has left these people without guidance.
“Franchise is about support — and being a franchisee is often about being part of something bigger than yourself and being connected to a big organization. And I think this entire moment is such a great example of that,” Gehringer said.
Despite the gravity and scale of the changes facing the real estate industry, Gehringer said the way Anywhere is supporting its franchisees isn’t really much different than what it already does; efforts are just ramping up.
Some of these measures include weekly town-hall-style meetings with Anywhere executives and in-house experts, such as the firm’s legal team. Franchisees can use these to ask questions, and the firm has a resource hub of materials to help agents and brokers understand specific issues.
Gehringer said that under normal conditions, Anywhere franchisees frequently turn to the company for support and guidance, but their needs have definitely increased in light of the impending business practice changes.
“We are definitely seeing and feeling more outreach and back and forth,“ she said. “They want more sessions, and they want to spend more time asking or thinking about the future.
“Some companies are looking at some M&A and have questions about that. Others are wondering about recruiting, or just making it clear to others in their market that they are a safe place for agents that can provide training and skills. It is just a lot of conversations.”
When it comes to two main business practice changes outlined in the NAR settlement, Gehringer noted that just like the owned brokerage business, franchisees will have access to optional form templates they can use with clients. But it is up to the independent franchisees, their agents and, ultimately, the sellers to decide how they will communicate offers of buyer broker compensation. Anywhere’s only guidance to franchisees is that these offers cannot appear on the MLS, per the terms of the settlement.
Ultimately, Anywhere executives feel that the guidance and support they’re extending to agents — whether they’re part of a franchise or an owned brokerage — is just part of the firm’s responsibility as a brokerage and franchisor.
“Our duty to supervise our agents is a critical thing, and we take it very seriously and we apply it to everything. And we’re here to support and help our agents, whether it’s on data security or fair housing or anything else.” Schneider said. “So, this is just another place where, of course, we’re going to be good stewards of our responsibilities there. We’re pumped about our rollout, and we think we’re in a great spot, especially on a relative basis when we hear the stories from others.”
And even though it might be difficult with so many agents under the Anywhere umbrella, Gehringer believes a plethora of thought leaders will only help the company navigate what is expected to be a bumpy few months for the industry.
“I have always been attracted to the idea that best practices are things to share, not hide,” Gehringer said. “We are always willing to share our practices and show what we have in place to earn that trust of our consumers.
“And I come from a background of sharing those practices with other companies. It is not a competition — it is all of us working together to find the best practice because we want business to be healthy. We want our customers to have a positive view of it. And we want our agents and the small-business owners affiliated with us to have fulfilling careers and feel proud of the work they are doing.”
