Adam Contos is now in his third year as the sole CEO of RE/MAX (NYSE: RMAX), a company that can rightly claim to have some of the best talented sales agents in the industry. While total agent count increased 5.1 percent to 134,769 agents worldwide, its U.S. and Canada agent count decreased 0.3 percent to 83,802 agents. Perhaps this is a reflection of the idea that RE/MAX is more exclusive. But that represents a challenge for RE/MAX’s business model, which is based on desk fees rather than commission splits.
During the third quarter earnings call, Contos told participants that many RE/MAX agents and brokers are reporting their best years ever and the franchise sales of Motto Mortgage through September 30 “nearly matched the full-year total for 2019.” Unfortunately, RE/MAX itself is showing some signs of stress. Nonetheless, RE/MAX is making money, to the tune of $30 million in earnings before interest, depreciation and amortization (EBITDA) for the third quarter, with handsome margins, selling Motto Mortgage franchises, and is profitable. It is not saddled with enormous debt burdens, and it boasts some of the top operators in the business.
And RE/MAX continued to bet on technology throughout 2020, adding to earlier acquisitions of booj and First by picking up Wemlo, a mortgage software company, and Gadberry Group, a location data company. This is an important move for the industry, as RE/MAX may be the one to show whether investing in technology is the right strategy for success or not.
If the tough get going when the times get tough, RE/MAX could not have asked for a better leader at the helm. A Marine and a former SWAT commander, Contos knows how to face real challenges and overcome them. He came to RE/MAX in 2003 as an independent contractor presenting safety training programs. He rapidly climbed the corporate ladder. In 2013, he was promoted to vice president of region development, and shifted his focus to business development in February 2014. He became senior vice president of marketing in February 2015 and chief operating officer a year later. Contos is proving himself to be a strong, natural leader unafraid to surround himself with smart and capable men and women.