The Real Brokerage (REAX) investor relations material

Industry trends and challenges

• Real estate market has been in a trough for three years, increasing pressure on all participants and exposing fundamental industry issues.

• Centralized MLS systems provide a better consumer experience compared to fragmented international models.

• Despite changes in commission structures in August 2024, average commissions per side remain at 2.6%, with no significant impact on buy or sell side compensation.

• Large teams are holding steady, while small to medium brokerages are seeking partnerships with larger organizations to remain competitive.

• Industry consolidation, such as the Compass-Anywhere merger, has increased agent awareness about aligning with future-ready companies.

Growth, recruitment, and business model

• Over 7,000 agents added year-to-date, with 10,000 added last year, all through organic growth.

• Teams are closing more transactions than solo agents, with market conditions favoring high-performance organizations.

• 100% of agents use the company’s proprietary technology platform, which is unique in the industry.

• Focus remains on providing value to agents at a lower cost, driving recruitment and retention.

• Ancillary services like title, mortgage, and wallet products offer higher gross margins and are a strategic focus for future growth.

Technology and AI integration

• Leo, an AI concierge, was launched for consumers after supporting agents for over a year and a half.

• Leo can converse with buyers, pre-qualify for mortgages, schedule showings, and will soon allow agents to personalize AI interactions with clients.

• AI is expected to automate up to 90% of the 250 tasks agents perform for buyers, freeing agents to focus on high-value activities.

• Agents are incentivized to use Leo, receiving payment per minute of client conversation, as AI enables direct consumer engagement and cross-selling of services.

• AI and technology are positioned to enhance, not replace, the human element in real estate, turning agents into “super agents” by eliminating repetitive tasks.