RE/MAX announced Tuesday in a U.S. Securities and Exchange Commission (SEC) filing it won’t extend its franchise fee deferral program that allowed brokers to defer the payment of some fees as COVID-19 halted real estate transactions in some market places.
The company will continue, however, to offer expanded training and tech initiatives, including a free, three-month subscription to the First app for affiliates, a machine learning-powered lead nurturing tool that the company acquired late last year.
“The considerable relief we announced earlier delivered extra support to our affiliates, when they needed it most, shortly after initial government measures were implemented to slow the spread of COVID-19,” RE/MAX CEO Adam Contos said, in a statement. “Based on feedback we’ve received, we believe that the actions we took were impactful, appreciated, and calibrated appropriately.”
“Now, with government restrictions easing and multiple leading indicators suggesting a resumption of real estate activity, our affiliates are well-positioned for what could be a busy period in our industries,” Contos added. “At this time, we don’t plan to extend direct financial relief beyond the initial options, but we’ll continue to support our affiliates with innovative solutions most relevant to their success in this constantly changing landscape.”
The company had announced in April that franchisees could have opted to defer 100 percent of the continuing franchise fees and advertising fees for their April, May or both, with zero interest. They were still required to pay their broker fee at the regular time with an additional 1 percent on top of the normal 1 percent broker fee. If the franchisee deferred both months, the broker fee increased to 3 percent, until the deferred fees were repaid.
Franchisees were also allowed to, instead, pay just 50 percent of their continuing franchise and advertising fees for April and May, with the rest being totally waived. The broker fee was not changed in this scenario.
RE/MAX, in the SEC filing, also disclosed that total agent count for the company increased 3.9 percent year-over-year in the first five months of 2020. However, U.S. and Canada agent count decreased 1.1 percent year-over-year in the first five months of 2020.
The agent losses actually decelerated once RE/MAX implemented the fee-saving measures, the company said, in the filing.
New Motto Mortgage office sales boomed, however, despite the pandemic. The mortgage franchise arm of the international real estate franchisor has one of its best months in company history in May 2020. Total open Motto Mortgage franchises increased by 35.2 percent year-over-year to 123 offices open at the end of May.