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| We think that's obviously excited about that |
| So that's something we feel really good about in terms of our purpose and what we're here to do |
| The short answer is given what I said earlier on spreads, we are, we feel good about where we are today to be able to kind of get back to that level and then beyond |
| And so that 99% of offline transactions is our competitive set and we love that set up for us because we think what we offer is vastly superior |
| And today, I mean, I feel good about our setup to going to lean into more volume for all the reasons I just said |
| So one thing I would say is that -- and we don't disclose the economics of partnerships, but the -- again, it has the attractive benefit of having a fixed customer acquisition cost, and we pay on contract closes |
| And as we've been able to do the work to reduce spreads durably through cost savings and improving price accuracy, we've been able to increase our acquisition pace quarter-to-quarter throughout 2023 and then contract growth going into this year |
| And I think sitting here in 2024, given that setup of supply demand, we feel pretty good about the ability to lean into acquisition volumes |
| And the good news is, as we think about how do we get to a size and scale so that we are positive cash flow like adjusted income positive, we can do that today in our current core products that we don't need to rely on any ancillary revenue whatsoever to do that |
| Now, we feel good about our ability to execute against that |
| But for those who want it, it's incredibly powerful |
| And for someone else to come into this environment right now, with our 10-year head start in terms of data insight, the hundreds and hundreds of thousands of homes we've been over time, all to the benefit of making sure that our pricing information is better for the next set of homes |
| It's pretty powerful |
| It's a real compounding advantage against that |
| The reason why we think our offering is so superior is, because it takes all those pain points, all that friction out of the system |
| It's a reason why we're able to put marketing dollars back into the system right now will be up 50% quarter-on-quarter, because we like where we sit in terms of our ability to offer you something that feels reasonable |
| And we have built the technology, the systems and the processes to be really good at that and to be able to do in a centralized way |
| Matt Cost So obviously, having been through the process and the heartache of trying to get an offer in on a home and falling through it, I think it's very clear your point about how this is a superior consumer experience |
| And we really stand-alone today to be able to deliver that at the scale we do so |
| We're definitely thinking about chatbots with -- for our customers, we can offer more personalized experience of the home seller who shows up and answer more questions, we're seeing early, early signs that, that actually improves conversion |
| It's very profitable |
| And that has been a good set up for us in terms of how we can set spreads and offer reasonable prices to customers |
| And to your point, we over earned a little bit, right? Home prices did better than we were underwriting and I think we were deliberately conservative in some of that |
| We're excited about doing more and more of that |
| That's a great tool for an agent to have |
| It's just gotten wider and wider over time as we've improved our ability to price certain homes |
| We just went live, I think, this week or last week with EXT, which is large brokerage in the company -- in the country, growing very quickly |
| So we've taken down our spreads to allow us to grow faster and just turning to more volume |
| But again where our spreads are and what we're seeing in terms of the market right now, which is pretty good home price stability, which for us is the most important thing to be able to kind of price home with a reasonable view to kind of where they're going to end up in the 4 to 6 month holding period we have |
| And so to the benefit of 8% contribution margin |
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| And there's been a lack of understanding amongst consumers that they get their buyer's agent for free |
| And while transaction velocity and sales are down 20% this year, they're 19.95% levels like they're certainly depressed |
| Affordability has been constrained |
| So, we're going after a problem that affects millions of people a year and it's super stressful, it's uncertain and most people say like selling your home is like a top 3, 4 stressor in life |
| And we saw throughout 2023 after the market kind of took a downturn that spreads are really high, conversion was low, acquisitions were muted as a result of that |
| Marketing was inefficient |
| Residential real estate broadly is one of the largest TAMs of consumer expenditure, but it also is one of the lowest online penetration rates |
| I think it's no surprise to anyone in this room that that's slowed down and there are a lot of reasons why the interest rates are probably by far the biggest one |
| That's the reason why we took our spreads down so much last year |
| We were not feeling that way necessarily middle of last year because the environment is still pretty uncertain, like interest rates up, interest rates down, what's going to happen with the Fed |
| Even though supply is depressed, buyer demand is depressed, they're relatively in line |
| Two, it's a cost to us today, significant costs |
| We have been around for a decade, yet still today our aided awareness is relatively low |
| We basically had to turn off the marketing because those dollars didn't make sense |
| I mean, residential real estate is massive market, has seen very little disruption so far outside of discovery in terms of online transactions for real estate |
| So that's the problem set |
| But is the service fee that you charge effectively when you buy a home from a home seller? Is that in any way linked or connected economically to the rate that a home seller might pay to a listing agent? And if that fee goes down, could there be some pressure on the service fee? Carrie Wheeler There could be |
| So you've gotten over the hill and you know what the pain points are |
| But what gets lost and all that is that 4 million people are still moving |
| So we certainly don't feel constrained from the market environment from an overall transaction velocity side |
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