As filed with the Securities and Exchange Commission on January 7, 2022.

Registration No. 333-            

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

HomeSmart Holdings, Inc.

(Exact name of registrant as specified in its charter)

Delaware	6531	85-3653341
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification Number)

HomeSmart Holdings, Inc.

8388 East Hartford Drive, Suite 100

Scottsdale, Arizona 85255

(602) 230-7600

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Matthew Widdows

Chief Executive Officer

HomeSmart Holdings, Inc.

8388 East Hartford Drive, Suite 100

Scottsdale, Arizona 85255

(602) 230-7600

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Rezwan D. Pavri Allison B. Spinner Andrew S. Gillman Wilson Sonsini Goodrich & Rosati, P.C. 650 Page Mill Road Palo Alto, California 94304 (650) 493-9300 Ashley Bowers Alan Goldman HomeSmart Holdings, Inc. 8388 East Hartford Drive, Suite 100 Scottsdale, Arizona 85255 (602) 230-7600 Richard A. Kline Sarah B. Axtell Latham & Watkins LLP 140 Scott Drive Menlo Park, California 94025 (650) 328-4600

Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box.  ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☐
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.  ☐

CALCULATION OF REGISTRATION FEE

Title of each Class of Securities to be Registered	Proposed Maximum Aggregate Offering Price(1)(2)	Amount of Registration Fee
Common stock, par value $0.01 per share	$100,000,000	$9,270

(1) Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(o) of the Securities Act of 1933, as amended.

(2) Includes the aggregate offering price of additional shares that the underwriters have the option to purchase, if any.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant will file a further amendment which specifically states that this registration statement will thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement will become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

PROSPECTUS (Subject to Completion)

Issued                 

                 Shares

Common Stock

HomeSmart Holdings, Inc. is offering                 shares of its common stock. The selling stockholder, Matthew Widdows, our founder and Chief Executive Officer, and/or certain of his affiliated entities, identified in this prospectus is offering to sell an additional              shares of common stock. This is an initial public offering and no public market currently exists for our shares. It is currently estimated that the initial public offering price per share will be between $                and $                . We will not receive any of the proceeds from the sale of the shares being sold by the selling stockholder.

We have applied to list the common stock on the Nasdaq Global Select Market under the symbol “HS.”

Following this offering, Matthew Widdows, our founder and Chief Executive Officer, and his affiliated entities will hold     % of our issued and outstanding common stock and will control more than a majority of the voting power of our common stock. As a result of his ownership, he will be able to control any action requiring the general approval of our stockholders, including the election of our board of directors, the adoption of amendments to our certificate of incorporation and bylaws and the approval of any merger or sale of substantially all of our assets. We will be a “controlled company” within the meaning of the corporate governance rules of Nasdaq. See the sections titled “Prospectus Summary—Corporate Reorganization and Basis for Presentation” and “Management—Controlled Company.”

We are an “emerging growth company” as that term is defined under the federal securities laws and, as such, we have elected to comply with certain reduced reporting requirements for this prospectus and may elect to do so in future filings.

Investing in our common stock involves risks. See the section titled “Risk Factors” beginning on page 23 to read about factors you should consider before buying shares of our common stock.

Price $                 per share

	Price to Public	Underwriting Discounts and Commissions(1)	Proceeds to HomeSmart	Proceeds to Selling Stockholder
Per Share	$	$	$	$
Total	$	$	$	$

(1) See the section titled “Underwriters” for a description of the compensation payable to the underwriters.

We and the selling stockholder have granted the underwriters the right to purchase up to                additional shares of our common stock to cover over-allotments, if any.

Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

The underwriters expect to deliver the shares against payment in New York, New York, on or about                .

J.P. Morgan	BofA Securities
Stifel	Oppenheimer & Co.
D.A. Davidson & Co.	Stephens Inc.

Prospectus dated                 ,

Table of Contents

Prospectus Summary	1
Risk Factors	23
Special Note Regarding Forward-Looking Statements	61
Industry, Market and Other Data	63
Use of Proceeds	64
Dividend Policy	65
Capitalization	66
Dilution	68
Unaudited Pro Forma Combined Financial Information	71
Management’s Discussion and Analysis of Financial Condition and Results of Operations	81
Letter from Matthew Widdows, Founder and Chief Executive Officer	108
Business	110
Management	134
Executive Compensation	141
Certain Relationships and Related Party Transactions	157
Principal and Selling Stockholders	161
Description of Capital Stock	163
Shares Eligible for Future Sale	167
Material U.S. Federal Income Tax Considerations for Non-U.S. Holders of our Common Stock	170
Underwriters	175
Legal Matters	184
Experts	184
Where You Can Find Additional Information	184
Index to Consolidated Financial Statements	F-1

Through and including                  (the 25th day after the date of this prospectus), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.

Neither we, the selling stockholder, nor any of the underwriters have authorized anyone to provide any information or to make any representations other than those contained in this prospectus or in any free writing prospectuses we have prepared. Neither we, the selling stockholder, nor any of the underwriters take responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell only the shares offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date, regardless of the time of delivery of this prospectus or of any sale of our common stock.

i

For investors outside the United States: Neither we, the selling stockholder, nor any of the underwriters have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the shares of our common stock and the distribution of this prospectus outside the United States.

ii

Prospectus Summary

This summary highlights selected information that is presented in greater detail elsewhere in this prospectus. This summary does not contain all of the information you should consider before investing in our common stock. You should read this entire prospectus carefully, including the sections titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our Consolidated Financial Statements and the related notes included elsewhere in this prospectus, before making an investment decision.

Unless the context otherwise requires, references to “HomeSmart,” “we,” “us,” “our,” the “company” and similar references refer to HomeSmart Holdings, Inc. and its subsidiaries.

HomeSmart Holdings, Inc.

Mission statement

Our mission is to revolutionize the real estate transaction through technology, scale, and service. By positioning ourselves at the center of the real estate process, we have created an ecosystem that empowers brokerages, franchisees, agents and consumers to conduct real estate transactions in a smarter and more efficient way.

Opportunity

For the majority of consumers, potential sellers or prospective buyers, buying and selling their home is the single most important, expensive, and long-term purchase they will ever make. The real estate industry is massive in size and, due to the recent COVID-19 pandemic, has experienced a renewed growth since our homes have become our primary places to live, learn, work and relax. The problems are:

• The real estate industry is antiquated and dominated by legacy players who have focused on technologies, solutions and business models that have become outdated.

• The real estate transaction is fragmented and complex, spread across multiple sub-industries and organizations including real estate brokerage, mortgage, title and escrow, and is still primarily a paper driven, manual process, which creates confusion and a poor experience for agents, brokerages and consumers.

• The real estate transaction lacks transparency, especially for consumers.

• There is continued downward pressure on agent commissions and an increased need for technology to help streamline the process while keeping agents’ costs low.

• There is a lot of irresponsible spending within the industry on acquisition of agents and technology, as well as wasteful and inefficient operations due to redundancies and lack of automation.

Through technology, scale and service, and a model focused on the agent, we believe we are well positioned to disrupt this market.

Business overview

HomeSmart is a revolutionary real estate enterprise powered by our proprietary end-to-end technology platform. We provide integrated real estate solutions to agents, brokerages, franchisees and, ultimately, the consumer. Our cloud-based platform empowers our users to succeed by providing a full suite of technology

1

offerings covering nearly every aspect of the real estate transaction. The drive towards a seamless home buying and selling experience is the catalyst for our growth. Technology and automation are at the core of our DNA—grounded in fiscal responsibility and operational excellence. We have been developing our software in-house over the last 20 years and have a 100% adoption rate across our agents. All of our franchisees and agents are automatically added as users and all transactions are processed through our technology platform. Our technology platform is focused on scalability and automation to drive transaction velocity, volume, and operating leverage for our brokers, franchisees, agents and consumers. Our business model has fueled our expansion, and we have over 23,000 agents across 194 offices in 47 states. According to RISMedia, HomeSmart was ranked in the top five residential real estate brokerages by number of transaction sides in the United States in 2020.

The market for residential real estate transactions and home-related services is highly fragmented, local and complex. Real estate agents generally operate in local markets as independent contractors and typically move from brokerage to brokerage, across disparate external systems and databases, and use a multitude of services to close a single transaction. To use these services, agents are charged numerous fees and are subject to high commission splits, which may ultimately get passed on to the consumer. Operating profitability of agents is further reduced by ongoing competitive dynamics that allow consumers to push agents for lower commissions on transactions. According to the National Association of REALTORS^® (“NAR”), 75% of all agents in the United States are being charged traditional commission splits by their brokerage that typically range from 16% to 39% and can be more, demonstrating there is a clear void in cost-effective and scalable solutions available to agents.

We have built a cost-effective, agent-centric real estate business model powered by our cloud-based, end-to-end platform for the residential real estate transaction. Our business model and platform empower brokers, franchisees and agents to provide a seamless transaction process for consumers, while offering a flat transaction fee for franchisees and agents. Our RealSmart technology suite includes RealSmart Broker—brokerage and agent management; RealSmart Agent—business and transaction management; and RealSmart Client—buying and selling transaction management; through which franchisees, agents and consumers are connected in order to conduct all aspects of the real estate process. We believe our technology delivers a full end-to-end experience for the consumer, including virtual tours, marketing, document management, process (sale, purchase, mortgage, title and escrow) tracking, education and training, listing management and more. Additionally, our RealSmart platform allows data to be aggregated for accurate insights, decision making, real-time reporting, business management and transparency for the consumer. We have used the power of our technology, the structure of our fees and our dedicated customer service team to create a technology-enabled model that drives the success of real estate professionals.

2

We believe we offer the real estate model of the future and have developed a platform that can be utilized by all agents. We offer flexibility for agents, allowing them to choose the commission plan, business building SmartTools and resources to best meet their current business needs, while also providing them with access to world-class technology to run their business and manage their transactions autonomously and remotely. We are positioned to attract and retain agents across all levels of productivity. Our business model, based predominantly on flat transaction and subscription fees, has demonstrated over 20 years of continued agent attraction. As a result, we have an industry leading agent Net Promoter Score of over 90, which reflects our strong culture of productivity and performance across our agents.

We pride ourselves on a culture of innovation, collaboration and community. As of September 30, 2021, we had 268 employees across our business units, who support our vast network of agents across the United States. This relatively small but highly efficient team of associates continuously innovates and enhances our software platform with the goal of digitizing and automating real estate workflows that empower key stakeholders in a tech-enabled real estate ecosystem. We believe our commitment to the continued development of our technology enables us to drive significant operating efficiencies at a high level of service. Through economies of scale, as of October 2020, we are able to outperform our competition with the ability to serve 92% more agents per employee and oversee and administer 46% more transaction sides per employee than our nearest competitor, according to RealTrends. This type of fiscal aptitude and responsibility is part of the fiber of HomeSmart, always focusing on eliminating waste while improving service.

We primarily generate revenue from our three key business segments: Real Estate Brokerage, Franchise, and Affiliated Business Services. Our revenue streams are generated through our corporate owned brokerages, our franchises, and our wholly owned mortgage and title companies. We generate the majority of our revenues from the real estate transactions executed by our corporate real estate brokerage where our agents represent consumers buying or selling homes. Additionally, we earn revenues from franchise royalties, as well as transaction-based fees from affiliated business services. These services are a result of our recent expansion to providing mortgage origination and title insurance services to our agents and consumers.

We have achieved significant growth and scale since inception. In 2019 and 2020, we generated revenue of $325 million and $393 million, respectively, representing 21% year-over-year growth. In the same periods, we had gross profit of $26 million and $30 million, respectively, representing 18% year-over-year growth. In 2019 and 2020, we had net income of $6.0 million and $9.2 million, respectively, and EBITDA of $7.1 million and $10.5 million, respectively. In the nine months ended September 30, 2020 and 2021, we generated revenue of $275 million and $478 million, respectively, representing 74% year-over-year growth. In the same periods, we had gross profit of $22 million and $31 million, respectively, representing 37% year-over-year growth. In the nine months ended September 30, 2020 and 2021, we had net income of $7.1 million and net loss of $2.3 million, respectively, and EBITDA of $8.1 million and $(0.1) million, respectively. For more information about gross profit, EBITDA and a reconciliation of EBITDA to net loss, the most directly comparable financial measure calculated in accordance with U.S. generally accepted accounting principles (“GAAP”), see the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Business and Non-GAAP Metrics.”

Industry overview and trends

The process of conducting a real estate transaction is complex and largely manual, and is focused in three areas: brokerage, title and escrow and mortgage. These processes are often dictated by local regulations and ordinances, creating complexities across geographical areas. Managing these processes and successfully guiding consumers across various workflows is key to providing a seamless transaction.

3

The complexity around real estate transactions is compounded by shifts in buyer and seller preferences and emerging technologies. The real estate industry has historically lagged behind other industries in technological innovation. Although some progress has been made to address pain points that currently exist, many solutions fall short or operate as point solutions with a lack of integration across the residential real estate ecosystem. Agents have been largely underserved by industry innovation despite the critical role they occupy at the center of the real estate transaction, driving positive experiences for both buyers and sellers.

There are multiple trends driving these changes in the real estate industry:

• High commission & customer acquisition costs.    With high customer acquisition costs and 75% of all real estate agents in the United States being charged traditional commission splits, there is a strong need for more cost-effective, scalable solutions.

• Manual, time-consuming processes.    Real estate is a market that is ripe for technological disruption. A typical day in the life of a real estate agent is mostly spent completing repetitive, rule-based processes that are ripe for automation vis-à-vis the use of modern technology.

• Disparate point solutions.    Even where agents seek technology solutions to manual, time-consuming processes, the overwhelming majority of residential real estate technology are disparate point solutions. This results in time spent away from serving clients, because agents are burdened with administrative tasks instead of focusing on lead generation and customer success.

• Changes in agent preferences.    Agents are now more mobile and independent than ever, creating an ongoing push for higher payout rates and high-value services (i.e. brand equity, educational training, sales and marketing support, etc.).

• Changes in consumer preferences.    The explosion of digital services from digital access to documents to remote signing and tours means that organizations need to understand the entire customer journey and not just optimize contact points individually.

• Proliferation of mobile devices as a key customer acquisition channel.    As mobile becomes increasingly prevalent for all internet use cases, residential real estate solutions will need to continue to adapt.

The process of conducting real estate transactions does not have to be the stressful experience it is today. We can achieve greater agent and consumer satisfaction through technology and one-stop accountability for all

4

aspects of the process. Creating our RealSmart platform has placed HomeSmart at the center of the real estate transaction. Doing so has allowed us to streamline the process across all aspects of the transaction: brokerage, agent, mortgage and title.

Our market opportunity

Our scale, technology and business model positions us favorably to capitalize on a sizable opportunity in the U.S. real estate market. We estimate our total addressable market based on the following key areas:

Total addressable market ($ billion)*

* All figures are approximations

• U.S. Residential Broker Commissions:    According to the NAR, in 2020 there were 5.6 million existing homes sold in the United States with a median selling price of $296,700, generating approximately $1.66 trillion in

5

total transaction value. The average commission rate for a U.S. residential broker, combining the buying agent and the selling agent, is 4.94%. We estimate that the roughly $1.66 trillion of existing home sales value in the United States generated approximately $82.0 billion of annual commission revenue to brokers.

• Title Insurance & Escrow:    The title insurance, as of February 2020, and escrow markets are, approximately, $16 billion and $26 billion, respectively, totaling to an approximately $42 billion market based on IBIS Research. We estimate the escrow market to be approximately $24.9 billion, based on the midpoint of industry standard 1-2% escrow relative to total transaction value of approximately $1.66 trillion. The Title Insurance and Escrow industry has grown substantially over the past few years into 2020 as a result of strengthening macroeconomic conditions and healthier demand from domestic consumers.

• U.S. Residential Mortgages:    We estimate that using the approximately $1.66 trillion aggregate transaction value and a 55% loan-to-value average ratio across the United States for residential homes in 2020, as well as a 30-year fixed-rate mortgage rate of 3% according to the MBA Mortgage Origination Report yields an approximately $27.4 billion market.

We believe that the RealSmart platform coupled with our low cost, agent-centric approach will continue to fundamentally change the way real estate organizations function, which positions us to capture a larger percentage of our total addressable market.

Our Segments

Real Estate Brokerage

Our corporate brokerage division operates across the country, providing residential real estate services to consumers through our HomeSmart agents. Each brokerage operates on the RealSmart platform. We centralize many of our operational practices serving our agents through our headquarters. We guide our agents as they assist consumers through real estate transactions, including listing, marketing, selling and finding homes, or leasing activities.

We provide our agents with training, mentoring, and other educational opportunities in the required continuing education topics, business building, marketing, and more. We have physical offices, including over 190 offices across 47 states, available for our agents to conduct real estate business and provide them with necessary tools and resources. Private offices are also available to rent in each of our corporate locations. However, our agents are able to access the RealSmart platform and the resources they need remotely. As a result, each agent has the flexibility to determine his or her own work arrangement, whether in-person, hybrid or fully remote, and we do not specifically track or require the use of physical office space by our agents.

Franchise

Our franchising division provides onboarding, training, and continual support to each of our franchise partners. Franchisees attend our training program in addition to one-on-one onboarding as they begin to operate within the HomeSmart model. Every franchisee operates on the RealSmart platform to manage their brokerage operation. Franchisees can elect to contract with our corporate office to serve their agents across the country through our Centralized Services offering. Serving agents from the corporate office fosters consistency of service across the brand.

Marketing, service, sales, and educational opportunities and support are available to our franchisees through our platform. Franchise mastermind conferences are held to support the development of each location further.

6

Affiliated Business Services

We also offer several ancillary services that are emerging business lines for us, which include: Equitable Title Agency, Equitable Escrow, and FINCo (dba “Minute Mortgage”).

We apply the same centralized, service-focused approach for title and escrow as we do for residential real estate. We centralize the operational aspects of the business and minimize the physical footprint of the operation. Equitable Escrow provides title and escrow services to consumers as a part of the settlement process during a real estate transaction.

For mortgage, we aim to streamline the loan process and add transparency to the process for the consumer. We are taking the same centralized approach to the operation, giving the additional consumer support throughout the process. We originate mortgages and sell those mortgages to the secondary market within thirty days.

Our platform

Our platform aims to streamline and automate the entire process of selling and buying a home and permeates across our three business segments. The RealSmart suite provides brokers, franchisees, agents and consumers with an end-to-end solution that creates transparency throughout the transaction. We have designed our platform to simplify a sophisticated process through an intuitive user interface that gives access to relevant information in real time. We developed an omni-channel approach, enabling access through websites or mobile apps to drive efficiency and adoption.

Our RealSmart solutions for franchisor, franchisees and brokers

Franchise Manager and RealSmart Broker offer solutions for our franchisors, franchisees and brokers.

Franchise Manager provides key business and operating metrics and has reporting features that aggregate up to the franchisor.

RealSmart Broker enables brokers to manage documents and files throughout the transaction through one portal, collaborate seamlessly with agents on workstreams and approvals, automate notifications and real-time updates, and complete business intelligence on agent activity.

7

Our RealSmart solution for agents

RealSmart Agent provides an all-in-one solution empowering our agents to maximize productivity and streamline business tasks through both online access and our app, RealSmart Agent Mobile.

Our RealSmart solution for consumers

RealSmart Client provides omni-channel solutions for consumer access to property and agent searches, property tour management, document storage, and HomeSmart Holdings owned and/or vetted mortgage and title companies. RealSmart Client was launched in 2021, with the goal of keeping the agent at the center of the transaction by connecting the consumer and the agent for life while providing full visibility and transparency for everyone involved in the transaction.

Our markets

We have an extensive footprint across the United States covering 47 states and 194 offices. We have expanded rapidly from our headquarters in Scottsdale, Arizona, and have focused initially on large metropolitan markets with high agent counts and transaction sides. A side is a party to a real estate transaction, with most transactions including a buyer and a seller, or two sides. We serve additional branch offices in the outlying areas surrounding our main office locations. We seek to expand in markets where there is a high concentration of real estate professionals who we believe are frustrated with broker-centric brokerages.

We have a demonstrated track record of successful integrations of brokerages and franchises that has fueled our market expansion and presence in key markets. Our market expansion strategy is predicated on profitability, margin, local market dynamics and long-term growth viability.

Who we serve

We offer a high-service, high-value technology-enabled residential real estate platform that allows agents to drive their businesses autonomously and remotely. Our comprehensive, end-to-end technology platform fuels an ecosystem that delivers consistency and value for all the stakeholders we serve: brokerages, franchisees, agents and consumers. As of September 30, 2021, we had 11 corporate-owned brokerages and 61 non-corporate brokerages, for a total of 72 franchises and 23,197 agents.

8

Our value proposition to brokers, franchisees, and agents

100% commission based.    Our primary model minimizes expenses for the agent through our 100% commission, flat transaction fee model. We believe this option provides agents with a greater share of the commission than traditional real estate brokerages, giving them the flexibility to invest back into their own business in the areas they determine are most important.

Fully integrated, best-in-class technology.    We built our platform in-house to support our agents so they can focus on what matters—prospecting and serving their client. We provide one end-to-end system for brokers, enabling agents to access and use our systems at no additional cost.

Optionality and flexibility.    We provide our agents flexibility in how they manage and build their own business. Our variety of fee options allows agents to choose the best fee plan and business structure for each phase of their career. In August 2021, we introduced HomeSmart+, which provides agents the ability to participate in a transaction-based revenue share model by referring other real estate professionals to HomeSmart.

Business Support.    We provide agents with office access, support, training, marketing resources, paperless transaction management and free tools. We strive to help alleviate an agent’s task of building their business, while allowing autonomy in their market by giving them the opportunity to hand select their preferred partners, arrange events specific to their brokerage and choose how they support their brand and community.

Our value proposition to consumers

Seamless transaction process with deep agent engagement.    Consumers also benefit from our platform because agents can devote more time and resources to the consumer.

Expansive database of attractive options.    Our platform offers real-time access to an expansive database of residential real estate and provides insights into local market dynamics and trends.

Safe and reliable platform with best-in-class support.    Consumers can set up secure, online profiles to control the use and disclosure of personal information. Additionally, we have a customer support line to help ensure that users receive the information they need and the best possible user experience.

End-to-end solutions supported by a strong partner ecosystem.    We encourage consumers to utilize our strong network of SmartPartners to assist with other aspects of the home buying process, such as title, mortgage, and other specialties.

A smarter way to do business

Agent-centric approach.    Our focus on providing agents with the tools they need to be successful allows our agents to have more control of their business and make the appropriate financial decisions needed to maximize their business opportunities. Our platform is designed to help agents move seamlessly from listing to closing, allowing them to close a high number of transactions. We keep costs low for our agents, while offering the benefits of our automated platform and a high level of agent support. This is our secret sauce for success.

Profit focused, fiscally responsible business operations.    Automation, scalability and our proprietary platform have allowed us to grow our business, while achieving and maintaining profitability for well over a decade. HomeSmart was founded on the principle of providing high value service at a low cost to agents, but we also focus on keeping our own costs down so that we can continue to operate in a sustainable manner.

9

Success in any market condition.    We have historically grown during industry downturns, such as The Great Recession of 2007 to 2009, which caused a real estate decline from 2007 to 2012. In addition, our HomeSmart model has grown in both new markets where we have not had a presence, as well as more mature markets where we have been in existence for many years. As we enter a new market, we have historically experienced rapid and accelerating growth in our real estate broker and agent base.

Differentiated true end-to-end platform.    Our RealSmart Technology Suite is our proprietary platform that works across all stages of the real estate transaction lifecycle. This single platform enables consumers, agents, brokers and franchisees to manage transactions seamlessly and drive the growth of their businesses.

Powerful data insights and analytics.    Our platform imports data from third-party resources such as local Multiple Listing Services (“MLS”) and data aggregators and empowers agents and consumers with the tools to obtain accurate insights that inform their decision making on a real-time basis.

Scale and strong network effects.    We have grown to over 23,000 agents across the United States, with over 13,500 agents connected to our corporate owned brokerages, enabling us to be one of the top five residential real estate brokerages in the industry based on number of transaction sides by RISMedia, and expanding our brand awareness. We believe our approach to multiple commission plans offers optionality not provided by any other brand, increasing our ability to address the migration from large split brokerage models. Our scale and network allow us to increase transactions across the real estate ecosystem, gain market share in our current markets and expand into new markets.

Disciplined approach to M&A.    We have a strong track record of acquisitions and have integrated multiple brokerages and franchisees into our business. We have historically expanded our franchise model on a selective basis, to provide further scale in regions of strength, or enter new markets rapidly.

Our growth opportunities

We intend to grow our business through the following key areas:

Acceleration in agent count and transactions.    We believe we have the business model for the future and are well positioned to be one of the most attractive real estate brokerages for agents to affiliate and transact with on a go forward basis. Our strategy is to drive continued growth in the markets where we have an established presence, as well as entering into new states and major metropolitan areas.

Evolution of agent commission options.    A core differentiator of HomeSmart is our ability to quickly adapt our brokerage offerings based on agent and market needs. In August 2021, we launched HomeSmart+, which provides opportunities for agents to earn commission income beyond their own transactions through our exclusive revenue-sharing plan. Because HomeSmart+ more heavily incentivizes agents to attract other producing agents to HomeSmart, we believe this will help to drive an increase in agent count, transaction count, and revenue.

Continued technology development to drive productivity increases.    Given the continued downward pressure on commissions, real estate brokerages and agents will need to be able to close more transactions at a higher velocity to succeed in this business. Our proprietary technology is focused on automation, which allows our brokerage and our agents to reduce the amount of time spent to close transactions. By staying intimately involved in the transaction process, we believe we can continue to develop technology to manage the customer relationship and drive transaction velocity.

10

Expansion into market adjacencies.    We plan to increase our monetization efforts as we scale and enter into new market adjacencies, including concierge services and mortgage and title expansion.

Pursuit of additional strategic M&A.    We will continue to selectively pursue acquisitions that contribute to the growth of our business, enable us to expand into adjacent markets or add new capabilities to our platform.

Recent Developments

Preliminary Estimated Financial Results for the Year ended December 31, 2021

The data presented below reflects our preliminary estimated financial results for the year ended December 31, 2021, based upon information available to us as of the date of this prospectus. This data is not a comprehensive statement of our financial results for the year ended December 31, 2021. The preliminary results of operations are subject to revision as we prepare our financial statements and related disclosures for the year ended December 31, 2021; however, such revisions are not expected to be significant. We undertake no obligation to update or supplement the information provided below until final financial statements for the year ended December 31, 2021 are released, which will not occur until after the completion of this offering.

While we currently expect our results for the year ended December 31, 2021 to be within the ranges set forth below, the audit of our financial statements for the year ended December 31, 2021 has not been completed. During the course of the preparation and audit of our financial statements and related notes for the year ended December 31, 2021, additional adjustments to the preliminary estimated financial results presented below may be identified. Our independent registered public accounting firm has not audited, reviewed, compiled or performed any procedures with respect to this preliminary financial data and, accordingly, does not express an opinion or any other form of assurance with respect thereto. We caution you that such preliminary estimates are not guarantees of future performance or outcomes and that actual results may differ materially from the estimates described below. See the sections titled “Risk Factors,” “Special Note Regarding Forward-Looking Statements” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for additional information regarding factors that could result in differences between the preliminary estimated ranges of certain of our financial results presented below and the actual financial results and other information we will report for the year ended December 31, 2021.

Key Business Metrics

The following are our key business metrics for the year ended December 31, 2020, and preliminary estimated key business metrics for the year ended December 31, 2021.

	Year ended December 31,
	2020		2021 Preliminary Estimate
Real Estate Brokerage
Agents		11,084
Closed transaction sides		40,919
Volume (in billions)	$	15.85	$
Franchises(1)
Agents		8,761
Closed transaction sides		38,304
Volume (in billions)	$	14.30	$

11

Key Financial Measures

The following are our key financial measures for the year ended December 31, 2020, and preliminary estimated key financial measures for the year ended December 31, 2021.

	Year ended December 31,
	2020		2021 Preliminary Estimate
	(in thousands, except percentages)
			Low		High
Revenue	$	392,506	$		$
Gross profit(2)	$	30,447	$		$
Gross profit %		7.8%		%		%
Net income (loss)	$	9,205	$		$
EBITDA	$	10,453	$		$
EBITDA Margin %		2.7%		%		%

(1) Includes all franchises except those included in the Real Estate Brokerage group above.

(2) This is defined as total revenues less commissions and other agent related costs as derived from our Statement of Operations.

EBITDA and EBITDA Margin

The following table provides a reconciliation of EBITDA and EBITDA Margin to net income (loss) for the year ended December 31, 2020, and estimated net income to estimated EBITDA and EBITDA Margin for the year ended December 31, 2021:

	Year ended December 31,
	2020		2021 Preliminary Estimate
			Low		High
	(in thousands, except percentages)
Revenue	$	392,506	$		$
Net income (loss)		9,205
Adjusted to exclude the following:
Interest expense		182
Income tax expense (benefit)		155
Depreciation and amortization		911
EBITDA	$	10,453	$		$
EBITDA margin		2.7%		%		%

We believe EBITDA and EBITDA Margin are important metrics for understanding our business to assess our relative profitability adjusted for interest expense, income taxes, and depreciation and amortization. EBITDA Margin is calculated by dividing EBITDA by revenue. For more information regarding why we believe the non-GAAP financial measures to be beneficial to understanding our business, please refer to the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Non-GAAP Financial Measures.”

12

Other Recent Developments

On January 1, 2022, we completed our acquisition of Champions Real Estate Group, Champions RE Group, LLC, CREG LLC D/B/A Champions Real Estate Group, and Champions Commercial Real Estate Brokerage Firm, LLC (collectively, the “Targets”), which are U.S. based residential real estate brokerages, pursuant to the terms of that certain purchase agreement between us and Ignacio and Adriana Osorio (the “Purchase Agreement”). Pursuant to the terms of the Purchase Agreement, we purchased 100% of the limited liability company interests of the Targets for aggregate cash consideration of $9,550,000, consisting of (i) $7,162,500 in cash and (ii) a promissory note with a principal amount of $2,387,500, subject to certain adjustments set forth in the Purchase Agreement. We financed the transaction by drawing down $10 million under our new secured credit facility with JP Morgan Chase Bank, N.A., dated September 27, 2021 (the “New Facility”), with $7,162,500 used to finance the transaction and the remainder being used for other working capital needs. The target brokerage follows a similar model to ours and has over 1,800 agents. For a discussion of risks related to the acquisition, please refer to the section titled “Risk Factors—Risks Related to our Business and Industry.” We may evaluate acquisitions in order to accelerate growth but might not succeed in identifying suitable candidates or may acquire businesses that negatively impact us.” We will file the financial statements of the Targets and pro forma financial statements required to be filed pursuant to Rule 3-05 of Regulation S-X within 75 days of the closing of the acquisition.

Risk factors summary

Our business is subject to numerous risks and uncertainties, including those highlighted in the section titled “Risk Factors” immediately following this prospectus summary. These risks include the following:

• Our recent revenue growth rates may not be indicative of our future growth, and our ability to grow our revenue is significantly dependent upon our and our franchisees’ ability to attract and retain independent sales agents and on our ability to attract and retain franchisees.

• Competition in each of our products and services is intense, and, if we cannot compete effectively, our business will be harmed.

• Our efforts to expand our business and offer additional adjacent services may not be successful.

• Listing aggregator concentration and market power creates, and is expected to continue to create, disruption in the residential real estate brokerage industry, which may have an adverse effect on our business, financial condition and results of operations.

• As our markets mature, we may be unable to maintain our agent growth rate, which could adversely affect our revenue and margin growth in our mature markets.

• The health of the U.S. residential real estate industry and macroeconomic factors may significantly impact our business.

• We experience variability in our financial results and operating metrics on a quarterly and annual basis and, as a result, our historical performance may not be a meaningful indicator of future performance.

• If we fail to grow in the various local markets that we serve or are unsuccessful in identifying and pursuing new opportunities to expand our service offerings into new markets, our long-term prospects and profitability will be harmed.

• A lack of financing for homebuyers in the U.S. residential real estate market at favorable rates and on favorable terms could have an adverse effect on our financial performance and results of operations.

13

• We may be unable to effectively manage rapid growth in our business.

• If we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired.

• Insiders will exercise significant control over our company and all corporate matters.

Channels for disclosure of information

Investors, the media and others should note that, following the completion of this offering, we intend to announce material information to the public through filings with the Securities and Exchange Commission (the “SEC”), the investor relations page on our website, press releases, public conference calls, and webcasts.

The information disclosed by the foregoing channels could be deemed to be material information. As such, we encourage investors, the media and others to follow the channels listed above and to review the information disclosed through such channels.

Any updates to the list of disclosure channels through which we will announce information will be posted on the investor relations page on our website.

Corporate information

We were incorporated under the laws of the state of Delaware in October 2020. Our principal executive offices are located at 8388 East Hartford Drive, Suite 100, Scottsdale, Arizona 85255, and our telephone number is (602) 230-7600. Our website address is www.homesmart.com. Information contained on, or that can be accessed through, our website does not constitute part of this prospectus and inclusions of our website address in this prospectus are inactive textual references only. You should not consider information contained on our website to be part of this prospectus or in deciding whether to purchase shares of our common stock.

“HomeSmart,” our logo and our other registered or common law trademarks, service marks or trade names appearing in this prospectus are the property of HomeSmart Holdings, Inc. Other trademarks and trade names referred to in this prospectus are the property of their respective owners.

Corporate reorganization and basis of presentation

In the second quarter of 2021, we participated in certain transactions, which collectively had the net effect of reorganizing our corporate structure so that the top-tier entity in our corporate structure, HomeSmart Holdings, Inc., obtained 100% of the equity interests in our subsidiaries (the “Company Subsidiaries”) and affiliates that were under common control by Matthew Widdows, our Chief Executive Officer, and his affiliated entities. In this prospectus, we refer to these transactions as the “Corporate Reorganization.” Before and after the Corporate Reorganization, Mr. Widdows had 100% ownership in HomeSmart Holdings, Inc. and the Company Subsidiaries. The Corporate Reorganization was accounted for as a combination of entities under common control at their historical cost. Our combined financial information in this prospectus is presented as if the Corporate Reorganization occurred at the beginning of the earliest date presented, and all prior periods have been retrospectively adjusted, except for historical business combinations which are included in the combined financial statements from the date of the relevant business combination.

Mr. Widdows formed HomeSmart Holdings, Inc. to serve as a holding company for various Company Subsidiaries. In the reorganization process, Mr. Widdows contributed a $2.0 million promissory note to HomeSmart Holdings, Inc. in exchange for 337,743 voting common shares in HomeSmart Holdings, Inc. The note

14

principal was subsequently paid in full by Mr. Widdows in April 2021; no interest was paid. The purpose of the contribution was to provide sufficient capital to effectuate the restructuring and for future acquisitions. In addition, FINCo Mortgage, LLC (“FINCo Mortgage”) issued a $3.0 million note payable to Inverness, Inc., an investment holding company wholly-owned by Mr. Widdows (“Inverness”). There was excess cash in FINCo Mortgage at the time of the restructuring. The purpose of the note was to allocate that cash to Inverness while FINCo Mortgage was still a disregarded subsidiary of Inverness; such cash could then be distributed by Inverness to Mr. Widdows at a later date. Finally, HomeSmart, LLC distributed a note payable of $7.0 million to the Matt D Widdows Trust UTA, of which $2.0 million and $1.0 million was paid to Mr. Widdows in April and May 2021, respectively. We formed two subsidiaries, HS Brokerage Holdings, LLC and HomeSmart Services, LLC, in connection with our acquisition of PalmerHouse Properties, LLC, PalmerHouse Properties and Associates, LLC, and PalmerHouse Properties Lake Country, LLC. HomeSmart, LLC became a wholly owned subsidiary of HS Brokerage Holdings, LLC as part of the Corporate Reorganization. We formed the subsidiary HomeSmart Investments, LLC following the restructuring in the ordinary course of business. See the section titled “Certain Relationships and Related Party Transactions,” for further description of these transactions. Other than as described herein, there were no other material elements of the Corporate Reorganization.

Our corporate structure immediately prior to the Corporate Reorganization is set forth below.

15

Our corporate structure immediately following the Corporate Reorganization is set forth below.

* Includes HomeSmart, LLC.

JOBS Act

We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. We may take advantage of these exemptions for so long as we are an emerging growth company, which could be as long as five years following the completion of this offering. Our status as an “emerging growth company” will end on the last day of the fiscal year in which we have $1.07 billion or more in annual revenue. However, if we achieve the $1.07 billion revenue threshold prior to the completion of this offering, we will continue to be treated as an “emerging growth company” for certain purposes until the earlier of the date on which we complete this offering or the end of the one-year period beginning on the date we ceased to be an “emerging growth company.”

See the section titled “Risk Factors—Risks Related to Our Business—We are an “emerging growth company,” and our election to comply with the reduced disclosure requirements as a public company may make our common stock less attractive to investors.”

16

The Offering

Common stock offered by us             shares

Common stock offered by the selling stockholder, Matthew Widdows, our founder and Chief Executive Officer, and/or certain of his affiliated entities              shares

Common stock to be outstanding after this offering             shares (or             shares if the underwriters exercise their option to purchase additional shares of common stock in full)

Option to purchase additional shares of common stock from us             shares

Option to purchase additional shares of common stock from the selling stockholder              shares

Use of proceeds We estimate that the net proceeds from the sale of shares of our common stock in this offering will be approximately $             (or approximately $             if the underwriters’ option to purchase additional shares of our common stock from us is exercised in full), based upon the assumed initial public offering price of $     per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

The principal purposes of this offering are to increase our capitalization and financial flexibility, create a public market for our common stock and enable access to the public equity markets for us and our stockholders. We intend to use the net proceeds from this offering for general corporate purposes, including working capital, operating expenses and capital expenditures. Additionally, we may use a portion of the net proceeds to acquire or invest in businesses, products, services or technologies. However, we do not have agreements or commitments for any material acquisitions or investments at this time.

We will not receive any proceeds from the sale of common stock by the selling stockholder. See the section titled “Use of Proceeds” for additional information.

Controlled company Upon the completion of this offering, Matthew Widdows, our founder and Chief Executive Officer, and his affiliated entities will control approximately             % of the voting power of our outstanding common stock. As a result, we will be a “controlled company” under Nasdaq corporate governance standards. Under these standards, a company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and

17

may elect not to comply with certain corporate governance standards. See the section titled “Management—Controlled Company.”

Proposed Nasdaq Global Select Market trading symbol “HS”

The number of shares of our common stock that will be outstanding after this offering is based on 54,478,907 shares of our common stock outstanding as of September 30, 2021, and excludes the following:

• 1,664,270 shares of common stock subject to restricted stock units (“RSUs”), outstanding as of September 30, 2021;

• 187,655 shares of common stock subject to RSUs granted after September 30, 2021;

• 253,080 shares of common stock subject to a stock appreciation rights (“SARs”) outstanding as of September 30, 2021 at a weighted average exercise price of $12.04 per share, which right we can elect to satisfy through the issuance of shares or by the payment of a cash settlement equal to the difference between the fair market value of our common stock on the date of exercise and the exercise price, and which our board of directors currently intends to satisfy through the issuance of shares;

• 263,630 shares of common stock subject to SARs granted after September 30, 2021 at a weighted average exercise price of $12.54 per share, which right we can elect to satisfy through the issuance of shares or by the payment of a cash settlement equal to the difference between the fair market value of our common stock on the date of exercise and the exercise price, and which our board of directors currently intends to satisfy through the issuance of shares;

•                  shares of our common stock reserved for future issuance under our equity compensation plans, consisting of:

•                  shares of our common stock to be reserved for future issuance under our 2022 Long-Term Incentive Plan (the “2022 Plan”), which will become effective prior to the completion of this offering;

•                  shares of our common stock reserved for future issuance under our 2021 Equity Incentive Plan, which number of shares will be added to the shares of our common stock to be reserved for future issuance under our 2022 Plan upon its effectiveness, at which time we will cease granting awards under our 2021 Equity Incentive Plan; and

•                  shares of our common stock reserved for future issuance under our 2022 Employee Stock Purchase Plan (the “ESPP”), which will become effective prior to the completion of this offering.

Our 2022 Plan and ESPP provide for annual automatic increases in the number of shares of our common stock reserved thereunder, and our 2022 Plan also provides for increases to the number of shares that may be granted thereunder based on shares under our 2021 Equity Incentive Plan that expire, are tendered to or withheld by us for payment of an exercise price or for satisfying tax withholding obligations or are forfeited or otherwise repurchased by us, as more fully described in the section titled “Executive Compensation—Employee Benefit and Stock Plans.”

Except as otherwise indicated, all information in this prospectus:

• Assumes the Corporate Reorganization as if it had occurred as of the earliest date presented in this prospectus;

18

• Assumes the filing and effectiveness of our amended and restated certificate of incorporation in Delaware and the effectiveness of our amended and restated bylaws, will each occur immediately prior to the completion of this offering;

• Assumes no exercise of outstanding SARs subsequent to September 30, 2021; and

• Assumes no exercise by the underwriters of their option to purchase up to an additional             shares of our common stock from us.

19

Summary Combined Financial and Other Data

The following tables summarize our combined financial and other data. We have derived the summary combined statement of operations data for the years ended December 31, 2019 and 2020 and combined balance sheet data as of September 30, 2021 from our audited combined financial statements included elsewhere in this prospectus. We have derived the summary combined statement of operations data for the nine months ended September 30, 2020 and 2021 and the combined balance sheet data as of September 30, 2021 from our unaudited interim combined financial statements that are included elsewhere in this prospectus. We have prepared the unaudited interim combined financial statements on the same basis as the audited consolidated financial statements and have included all adjustments, consisting only of normal recurring adjustments that, in management’s opinion, are necessary to state fairly the information set forth in those combined financial statements. Our historical results are not necessarily indicative of the results that may be expected in the future and our results for the nine months ended September 30, 2021 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2021 or any other period. The following summary combined financial and other data should be read in conjunction with the sections titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Unaudited Pro Forma Combined Financial Information” and our combined financial statements and related notes included elsewhere in this prospectus.

Combined statements of operations data

	Year ended December 31,					Nine months ended September 30,
	2019			2020		2020		2021
	(In thousands, except share and per share data)
Revenue
Real estate brokerage	$	315,947		$	380,890	$	266,933	$	466,843
Franchise		4,577			5,635		3,892		5,279
Affiliated business services		4,081			5,981		4,250		5,571
Total revenue		324,605			392,506		275,075		477,693
Operating expenses
Commission and other agent-related costs		298,897			362,059		252,708		447,059
General and administrative		14,783			16,576		11,565		26,524
Sales, marketing, and advertising		3,780			3,975		2,915		4,966
Depreciation and amortization		665			911		672		1,953
Total operating expenses		318,125			383,521		267,860		480,502
Income (loss) from operations		6,480			8,985		7,215		(2,809	)
Interest expense		220			182		141		522
Other income (loss), net		(73	)		557		208		747
Income (loss) before income taxes		6,187			9,360		7,282		(2,584	)
Income tax expense (benefit)		191			155		142		(237	)
Net (loss) income	$	5,996		$	9,205	$	7,140	$	(2,347	)
Net income (loss) per share, basic and diluted	$	0.11		$	0.17	$	0.13	$	(0.04	)
Weighted average common shares outstanding, basic and diluted		54,141,164			54,141,164		54,141,164		54,478,907
Pro forma net income per share, basic and diluted(1)
Pro forma weighted average common shares outstanding, basic and diluted(1)

(1) See our Combined Financial Statements and the related notes included elsewhere in this prospectus for an explanation of the method used to compute the historical net loss per share and pro forma net loss per share and the number of shares used in the computation of the per share amounts for the years ended December 31, 2019 and 2020.

20

Combined balance sheet data

	As of September 30, 2021
	Actual			Pro Forma(2)
	(In thousands)
Cash and cash equivalents	$	9,214		$
Working capital(1)		(4,030	)
Total assets		41,984
Total liabilities		35,731
Total stockholder’s equity		6,253

(1) Working capital is defined as current assets less current liabilities.

(2) The pro forma combined balance sheet gives effect to (i) the filing and effectiveness of our amended and restated certificate of incorporation in Delaware that will become effective immediately prior to the completion of this offering and (ii) the sale and issuance by us of             shares of our common stock in this offering, based upon the assumed initial public offering price of $             per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

Key business and Non-GAAP metrics

In addition to the measures presented in our consolidated financial statements, we use the following key business and financial measures to help us evaluate our business, identify trends affecting our business, formulate business plans, and make strategic decisions:

	Year ended December 31,				Change 2019 vs. 2020				Nine months ended September 30				Change 2020 vs. 2021
	2019		2020		# or $		%		2020		2021		# or $		%
Key Metrics
Real Estate Brokerage
Agents		10,495		11,084		589		6%		10,945		13,654		2,709		25%
Closed transaction sides		37,029		40,919		3,890		11%		29,320		43,748		14,428		49%
Volume (in billions)	$	12.94	$	15.85	$	2.91		23%	$	11.08	$	18.97	$	7.89		71%
Franchises(1)
Agents		7,346		8,761		1,415		19%		8,385		9,543		1,158		14%
Closed transaction sides		30,264		38,304		8,040		27%		26,635		35,831		9,196		35%
Volume (in billions)	$	10.70	$	14.30	$	3.60		34%	$	9.56	$	14.95	$	5.39		56%
Financial Measures
Revenues (in thousands)	$	324,605	$	392,506	$	67,901		21%	$	275,075	$	477,693	$	202,618		74%
Gross profit (in thousands)(2)	$	25,708	$	30,447	$	4,739		18%	$	22,367	$	30,634	$	8,267		37%
Gross profit %		7.9%		7.8%		-0.2%		-2%		8.1%		6.4%		(1.7)%		(21)%
EBITDA (in thousands)	$	7,072	$	10,453	$	3,381		48%	$	8,095	$	(109)	$	(8,204)		(101)%
EBITDA margin %		2.2%		2.7%		0.5%		22%		2.9%		0.0%		(3.0)%		(101)%

(1) Includes all franchises except those included in the Real Estate Brokerage group above.

(2) This is defined as total revenues less commissions and other agent related costs as derived from the Statement of Operations.

21

See the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Business and Financial Measures” for a description of Real Estate Agents, Closed Transactions, Transaction Volume, Gross profit, EBITDA and EBITDA margin, as well as a reconciliation of EBITDA and EBITDA margin to the most directly comparable financial measures calculated in accordance with GAAP.

22

Risk Factors

Investing in our common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information in this prospectus, including the sections titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Unaudited Pro Forma Combined Financial Information” and our combined financial statements and related notes, before making a decision to invest in our common stock. Our business, financial condition, results of operations, or prospects could also be harmed by risks and uncertainties not currently known to us or that we currently do not believe are material. If any of the risks actually occur, our business, financial condition, results of operations, and prospects could be adversely affected. In that event, the market price of our common stock could decline, and you could lose part or all of your investment.

Risks Related to our Business and Industry

Our recent revenue growth rates may not be indicative of our future growth, and our ability to grow our revenue is significantly dependent upon our and our franchisees’ ability to attract and retain independent sales agents and on our ability to attract and retain franchisees.

Our revenue grew from $325 million in 2019 to $393 million in 2020, which represented a growth rate of 21%. Our revenue also grew from $275 million as of September 30, 2020 to $478 million as of September 30, 2021, which represented a growth rate of 74%. In the future, our revenue may not grow as rapidly as it has over the past several years. We believe that our future revenue growth will depend, among other factors, on our ability to expand our network of independent sales agents for our company-owned brokerages, attract and retain franchisees, improve and develop our platform, pursue opportunistic mergers and acquisitions and expand our services in adjacent markets, such as mortgage and title.

The core of our integrated business strategy is aimed at significantly growing the base of productive independent sales agents at our company-owned and franchised brokerages and providing them with compelling data and technology products and services to make them more productive and their businesses more profitable. In addition, in order to grow revenue, we need to enter into franchise agreements with new franchisees and renew existing franchise agreements without reducing contractual royalty rates or increasing the amount and prevalence of sales incentives.

We have experienced growth in our real estate broker and agent base, and a failure to maintain that growth could harm our revenue growth. During the year ended December 31, 2020, our net agent and broker base grew by about 11%, from 17,841 agents and brokers at December 31, 2019 to 19,845 agents and brokers at December 31, 2020. During the nine months ended September 30, 2021, our net agent and broker base grew by about 20% compared to the nine months ended September 2020, from 19,330 agents and brokers at September 30, 2020 to 23,197 agents and brokers at September 30, 2021. Because we derive revenue from real estate transactions in which our brokers and agents receive commissions, increases in our agent and broker base correlate to increases in revenues. The rate of growth of our agent and broker base cannot be predicted and is subject to many factors outside of our control, including actions taken by our competitors and macroeconomic factors affecting the real estate industry generally. If we are unable to successfully grow the base of productive independent sales agents at our company-owned and franchised brokerages (or if we or they fail to replace departing successful sales agents with similarly productive sales agents) or grow our base of franchisees, we may be unable to maintain or grow revenues or earnings and our results of operations may be adversely affected.

We have experienced growth in part through our acquisition of transaction fee-based brokerages and a failure to maintain that type of growth could harm our revenue. In recent periods, we acquired large brokerages which accelerated agent count and transaction count growth. However, the availability of transaction fee-based brokerages with significant market share is limited. If we cannot find additional brokerages to acquire that we

23

believe will fit with our business model, our ability to grow agent count through acquisitions in the long-term may be limited, which could adversely affect our revenue.

Our technology platform is designed to enhance our value proposition to independent sales agents and franchisees. Agents and franchisees may not find our technology platform compelling and, if we fail to successfully enhance our value proposition through further development of our technology platform, we may fail to attract new or retain independent sales agents or franchisees, resulting in a reduction in commission income and royalty fees paid to us, which would have an adverse effect on our results of operations. In addition, the continued execution of our strategy may also take longer or cost more than we currently anticipate and, even if we are successful in our recruitment and retention efforts, any additional revenue generated may not offset the related expenses we incur.

We may not be successful in our efforts to do any of the foregoing, and any failure to be successful in these matters could adversely affect our revenue growth.

Competition in each of our products and services is intense, and, if we cannot compete effectively, our business will be harmed.

We face intense competition nationally and in each of the markets we serve for each of our products and services (residential brokerage, mortgage, and title and escrow) and if we cannot compete effectively, our business will be harmed. We believe that our ability to compete depends upon many factors, including the following:

• Our ability to attract and retain agents;

• The timing and market acceptance of our products and services;

• The attractiveness of our technology platform;

• Transaction fees and commissions;

• Our adjacent services; and

• Our brand strength.

Many of our competitors, including Realogy, eXp Realty, Compass, and Redfin, may have substantial competitive advantages across our products and services, such as longer operating histories, stronger brand recognition, greater financial resources, more management, sales, marketing and other resources, superior local referral networks, perceived local knowledge and expertise, and extensive relationships with participants in the residential real estate industry, including third-party data providers such as multiple listing services (“MLSs”). Consequently, these competitors may have an advantage in recruiting and retaining agents and franchisees, attracting consumers, and growing their businesses. They may also be able to provide consumers with adjacent offerings that are different from or superior to those we provide. The success of our competitors could result in our loss of market share and harm our business.

Each of our products and services also faces competition from potential new entrants, particularly those driven by technology. These potential competitors may have substantial financial support that allows them to offer services superior to ours or at lower costs. The introduction of additional competitors may also adversely impact our market share and harm our business. For example, if large technology companies such as Amazon or Google were to utilize their resources to enter the real estate industry through programs such as iBuying, through which companies buy and sell real estate properties directly through technology and without the use of real estate agents, their access to financial support and brand recognition may provide them with substantial competitive advantages. Major and new entrants such as Zillow, OpenDoor and OfferPad heighten the risk created by the iBuying movement.

Any of the above situations could have a negative effect on our business, financial condition and results of operations.

24

Our efforts to expand our business and offer additional adjacent services may not be successful.

In the past, we have expanded our business to offer additional products and services on our platform to agents and consumers. For example, we currently offer mortgage, title, escrow and other ancillary services, and we have invested significant resources in these and other new product and services offerings we expect to launch in the future. However, if we are unable to expand our footprint in market adjacencies in a timely manner, or at all, or if these services are not utilized by our agents at the rate we expect, or at all, our business, financial condition, and results of operations may be adversely affected.

Listing aggregator concentration and market power creates, and is expected to continue to create, disruption in the residential real estate brokerage industry, which may have an adverse effect on our business, financial condition and results of operations.

The concentration and market power of the top listing aggregators allow them to monetize their platforms by a variety of actions, including expanding into the brokerage business, charging significant referral fees, charging listing and display fees, diluting the relationship between agents and brokers (and between agents and the consumer), tying referrals to use of their products, consolidating and leveraging data, and engaging in preferential or exclusionary practices to favor or disfavor other industry participants. These actions divert and reduce the earnings of other industry participants, including our company-owned and franchised brokerages.

One dominant listing aggregator has introduced an iBuying offering to consumers and recently launched a brokerage with employee sales agents in several locations to support this offering and has joined many local MLSs as a participating broker to gain electronic access directly to real estate listings rather than relying on disparate electronic feeds from other brokers participating in the MLSs or MLS syndication feeds. If this listing aggregator or another aggregator is successful in gaining market share with such offering, it could control significant industry inventory and an increasing portion of agent referrals, including the ability to direct referrals to agents and brokers that share revenue with them. In addition, this listing aggregator has purchased several software companies whose products were already in use by many real estate agents and MLSs, and associations, and may attempt to use its growing access to key data spanning the home buying experience to displace or pre-empt its competitors before they can reach customers.

Aggregators could intensify their current business tactics or introduce new programs that could be disadvantageous to our business and other brokerage participants in the industry, including:

• Broadening their programs that charge brokerages and their affiliated sales agents fees, including referral, listing, display, advertising and related fees;

• Pursuing mergers or other combinations with competitor brokerages;

• Pursuing acquisitions, mergers or other combinations with independent software and technology companies, providing access to more aggregated data and consumer information;

• Setting up competing brokerages;

• Increasing the fees associated with such programs;

• Introducing new fees for new or existing services;

• Not including our or our franchisees’ listings on their websites;

• Reducing listing fees they pay to industry participants;

• Controlling significant inventory and agent referrals;

25

• Utilizing their aggregated data for competitive advantage;

• Disintermediating our relationship with affiliated franchisees and independent sales agents; and/or

• Disintermediating the relationship between the independent sales agent and the buyers and sellers of homes.

Such tactics could further increase pressures on the profitability of our company-owned and franchised brokerages and affiliated independent sales agents, reduce our franchisor service revenue and dilute our relationships with our franchisees and our and our franchisees’ relationships with affiliated independent sales agents and buyers and sellers of homes.

As our markets mature, we may be unable to maintain our agent growth rate, which could adversely affect our revenue and margin growth in our mature markets.

When we enter a new market, we generally have experienced rapid and accelerating growth in our real estate broker and agent base. Because we derive revenue from gross commissions, franchise royalties, mortgage banking and title insurance fees from our agents, brokers and consumers, increases in our agent and broker base correlate to increases in revenues, and the rate of growth of our revenue correlates to the rate of growth of our agent and broker base. Our agent growth rates were 11% and 20%, respectively, for 2020 and the nine months ended September 30, 2021 as compared to the corresponding period in the prior year. The rate of growth of our agent and broker base cannot be predicted and is subject to many factors outside of our control, including actions taken by our competitors and macroeconomic factors affecting the real estate industry generally. We generally experience a faster growth rate of our agents and brokers in our newer markets, and as the market matures the growth rate slows. In addition, our franchisees and our corporate-owned brokerages may experience different growth rates in the same market, and specifically, our franchises may experience a slower rate of growth compared to our corporate-owned brokerages, as we work to onboard our franchisees and provide them with the tools and training that are already integrated into our corporate-owned brokerages. We cannot ensure that we will be able to maintain our recent agent growth rate or that our agent and broker base will continue to expand in future periods. A slowdown or decline in our agent growth rate would harm our revenue growth and could adversely affect our results of operations.

The health of the U.S. residential real estate industry and macroeconomic factors may significantly impact our business.

Our success depends largely on the health of the U.S. residential real estate industry. This industry, in turn, is affected by changes in general economic conditions, which are beyond our control. Any of the following factors, individually, or in combination with other factors, could adversely affect the industry and negatively impact our business, results of operations and financial condition:

• Seasonal or cyclical downturns in the U.S. residential real estate industry;

• Periods of slow economic growth or recessionary conditions;

• Increased unemployment rates or stagnant or declining wages;

• Fluctuations in interest rates;

• Inflationary conditions;

• Low consumer confidence in the economy or the U.S. residential real estate industry;

• Adverse changes in local or regional economic conditions in the markets that we serve and markets into which we are attempting to expand;

26

• Increased mortgage rates, reduced availability of mortgage financing, or increased down payment requirements;

• Decline in home prices;

• Low home inventory levels, which may result from unforeseen adverse events such as a pandemic or other public crisis that restricts people’s movement, zoning regulations and higher construction cost, among other factors;

• Lack of affordably priced homes, which may result from home prices growing faster than wages;

• Volatility and general declines in the stock market or lower yields on individuals’ investment portfolios;

• Rising insurance costs that increase the expenses associated with home ownership;

• Newly enacted and potential federal, state, and local legislative actions that would affect the residential real estate industry generally, including (i) actions that would increase the tax liability arising from buying, selling or owning real estate, (ii) actions that would change the way real estate brokerage commissions are negotiated, calculated, or paid, (iii) potential reform relating to Fannie Mae, Freddie Mac, and other government sponsored entities (“GSE”) that provide liquidity to the mortgage market; and (iv) actions or potential reform that brings relaxed lending policies, regulation and oversight that results in predatory lending, risky loans and products, fraud and complex products that could weaken the financial system when economic conditions change and hinder homebuyers’ ability to finance and purchase homes;

• Changes that cause U.S. real estate to be more expensive for foreign purchasers, such as (i) increases in the exchange rate for the U.S. dollar compared to foreign currencies and (ii) foreign regulatory changes or capital controls that make it more difficult for foreign purchasers to withdraw capital from their home countries or purchase and hold U.S. real estate;

• Decreasing home ownership rates, declining demand for real estate, changed generational views on homeownership and generally decreased financial resources available for purchasing homes;

• War, terrorism, political uncertainty, natural disasters, national or global health crises, inclement weather, and acts of God;

• Increased number of home purchases by investors, reducing the ability of the average home buyer to purchase a home; and

• Real estate professionals being able to maintain independent contractor employment status.

The above factors are things we cannot control as we operate in the real estate industry. The above factors, and other factors discussed in this prospectus, could cause a decline in the housing or mortgage markets and have a material adverse effect on our business by causing slowdowns in our growth or a decline in the number of home sales and/or home prices. This could adversely affect the real estate industry, and, as a result, negatively impact our business, financial condition and results of operations.

We experience variability in our financial results and operating metrics on a quarterly and annual basis and, as a result, our historical performance may not be a meaningful indicator of future performance.

We historically have experienced, and expect to continue to experience, variability, on both a quarterly and annual basis, in our financial results and operating metrics for a variety of reasons, many of which are outside of our control and difficult to predict. As a result of such variability, our historical performance, including from

27

recent quarters or years, may not be a meaningful indicator of future performance and period-to-period comparisons also may not be meaningful. Numerous factors can influence our results of operations, including:

• Our ability to attract and retain agents and franchisees;

• Our ability to develop adjacent services on our platform;

• Changes in interest rates or mortgage underwriting standards;

• The actions of our competitors;

• Costs and expenses related to the strategic acquisitions and partnerships;

• Increases in and timing of operating expenses that we may incur to grow and expand our operations and to remain competitive;

• Changes in the legislative or regulatory environment, including with respect to real estate commission rates and disclosures;

• System failures or outages, or actual or perceived breaches of security or privacy, and the costs associated with preventing, responding to, or remediating any such outages or breaches;

• Adverse judgments, settlements, or other litigation-related costs and the fees associated with investigating and defending claims;

• The overall tax rate for our business and the impact of any changes in tax laws or judicial or regulatory interpretations of tax laws, which are recorded in the period such laws are enacted or interpretations are issued and may significantly affect the effective tax rate of that period;

• The application of new or changing financial accounting standards or practices; and

• Changes in regional or national business or macroeconomic conditions, including as a result of the COVID-19 pandemic, which may impact the other factors described above.

If we fail to grow in the various local markets that we serve or are unsuccessful in identifying and pursuing new opportunities to expand our service offerings into new markets, our long-term prospects and profitability will be harmed.

If we fail to grow in the various local markets that we serve, our business may be harmed. To capture and retain market share in the various local markets that we serve, we must compete successfully against other brokerages for agents and brokers and for the consumer relationships that they bring. Our competitors could lower the fees that they charge to agents and brokers or could raise the compensation structure for those agents. In addition, our model of charging a fixed transaction fee may have a negative perception in certain markets. Our competitors may have access to greater financial resources than us, allowing them to undertake expensive local advertising or marketing efforts. In addition, our competitors may be able to leverage local relationships, referral sources, and strong local brand and name recognition that we have not established. Our competitors could, as a result, have greater leverage in attracting new and established agents in the market and in generating business among local consumers. Our ability to grow in the local markets that we serve will depend on our ability to compete with these local brokerages.

Additionally, our decision to expand our service offerings into new markets may consume significant financial and other resources and may not achieve the desired results. We regularly evaluate expanding our brokerage and non-brokerage services into new markets. For example, we may expand our title and mortgage services to other jurisdictions. Any expansion may require significant expenses and the time of our key personnel,

28

particularly at the outset of the expansion process. Expansion may also subject us to new regulatory environments, which could increase our costs as we evaluate compliance with the new regulatory regime. Notwithstanding the expenses and time devoted to expansion into a new market, we may fail to achieve the financial and market share goals associated with the expansion.

If we fail to continue to grow in the local markets we serve or if we fail to successfully identify and pursue new opportunities to expand our service offerings into new markets, our long-term prospects, financial condition and results of operations may be harmed.

A lack of financing for homebuyers in the U.S. residential real estate market at favorable rates and on favorable terms harm our financial performance and results of operations.

Our business is significantly impacted by the availability of financing at favorable rates or on favorable terms for homebuyers, which may be affected by government regulations and policies.

The Dodd-Frank Act, which was passed to more closely regulate the financial services industry, created the Consumer Financial Protection Bureau (“CFPB”), an independent federal bureau, which was designed to enforce consumer protection laws, including various laws regulating mortgage finance. The Dodd-Frank Act also established new standards and practices for mortgage lending, including a requirement to determine a prospective borrower’s ability to repay a loan, removing perceived incentives to originate higher cost mortgages, requiring additional disclosures to potential borrowers and restricting the fees that mortgage originators may collect. Rules implementing many of these changes protect creditors from certain liabilities for loans that meet the requirements for “qualified mortgages.” The rules placed several restrictions on qualified mortgages, including caps on certain closing costs as well as limits on debt to income ratios for qualified mortgages.

Certain potential regulatory changes such as the termination by the CFPB of a regulatory exemption known as the “QM patch” for loans backed by Fannie Mae or Freddie Mac, the requirement to implement a new uniform residential loan application which may increase Equal Credit Opportunity Act and other operational risks, and more activist supervision and regulation of housing finance at the state level may adversely impact the housing industry, including homebuyers’ ability to finance and purchase homes.

The monetary policy of the U.S. government, and particularly the Federal Reserve Board, which regulates the supply of money and credit in the U.S., significantly affects the availability of financing at favorable rates and on favorable terms, which in turn affects the domestic real estate market. While currently interest rates are low, changes in the Federal Reserve Board’s policies are beyond our control, are difficult to predict, and could restrict the availability of financing on reasonable terms at favorable interest rates for homebuyers, which could have an adverse effect on our business, results of operations and financial condition.

In addition, a reduction in government support for home financing, including the possible winding down or privatization of GSEs could further reduce the availability of financing for homebuyers in the U.S. residential real estate market. No consensus has emerged in Congress concerning potential reforms relating to Fannie Mae and Freddie Mac and a potential transition to alternative structures for the secondary market, so we cannot predict either the short- or long-term effects of such regulation and its impact on homebuyers’ ability to finance and purchase homes.

Furthermore, many lenders have tightened their underwriting standards since the real estate downturn that began in 2008, and many subprime and other alternative mortgage products are no longer as common in the marketplace. While some loosening of credit standards and a resurgence of alternative mortgage products, including non-qualified mortgages has occurred, if these mortgage loans continue to be somewhat more difficult to obtain, including in the jumbo mortgage markets, the ability and willingness of prospective buyers to

29

finance home purchases or to sell their existing homes could be adversely affected, which would adversely affect our operating results. In addition, many lenders have further tightened their underwriting standards during the COVID-19 pandemic, and it is unclear whether such tightened standards will be relaxed again in the future.

We cannot predict whether or not such legislation, regulation and policies may increase down payment requirements, increase mortgage costs, or result in increased costs and potential litigation for housing market participants, any of which could harm our business, financial condition and results of operations.

We may be unable to effectively manage rapid growth in our business.

We may not be able to scale our business quickly enough to meet the growing needs of our affiliated agents, brokers and franchisees, and, if we are not able to grow efficiently, our operating results could be harmed. As we add new agents, brokers and franchisees, we will need to devote additional financial and human resources to improving our internal systems, integrating with third-party systems, and maintaining infrastructure performance. In addition, we will need to appropriately scale our internal business systems and our services organization, including support of our affiliated agents, brokers and franchisees as our demographics expand over time. Any failure of or delay in these efforts could cause impaired system performance and reduced real estate professional satisfaction. These issues could reduce the attractiveness of our company to existing agents, brokers and franchisees who might leave the company as well as resulting in decreased attraction of new agents, brokers and franchisees. Even if we are able to upgrade our systems and expand our staff, such expansion may be expensive, complex, and place increasing demands on our management. We could also face inefficiencies or operational failures as a result of our efforts to scale our infrastructure and we may not be successful in maintaining adequate financial and operating systems and controls as we expand. Moreover, there are inherent risks associated with upgrading, improving and expanding our information technology systems. We cannot be sure that the expansion and improvements to our infrastructure and systems will be fully or effectively implemented on a timely basis, if at all. These efforts may reduce our revenue and margins and adversely impact our results of operations.

If we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired.

As a public company, we will be subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Sarbanes-Oxley Act of 2002 (“SOX”) and the rules and regulations of the applicable listing standards of the Nasdaq Global Select Market (“Nasdaq”). We expect that the requirements of these rules and regulations will continue to increase our legal, accounting, and financial compliance costs, make some activities more difficult, time-consuming, and costly, and place significant strain on our personnel, systems, and resources.

SOX requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. We are continuing to develop and refine our disclosure controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we will file with the SEC is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms and that information required to be disclosed in reports under the Exchange Act is accumulated and communicated to our principal executive and financial officers. We are also continuing to improve our internal control over financial reporting. In order to maintain and improve the effectiveness of our disclosure controls and procedures and internal control over financial reporting, we have expended, and anticipate that we will continue to expend, significant resources, including accounting-related costs, and significant management oversight.

30

Our current controls and any new controls that we develop may become inadequate because of changes in conditions in our business. Further, weaknesses in our disclosure controls and internal control over financial reporting may be discovered in the future. Any failure to develop or maintain effective controls or any difficulties encountered in their implementation or improvement could harm our results of operations or cause us to fail to meet our reporting obligations and may result in a restatement of our financial statements for prior periods. Any failure to implement and maintain effective internal control over financial reporting also could adversely affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of our internal control over financial reporting that we will eventually be required to include in our periodic reports that will be filed with the SEC. Ineffective disclosure controls and procedures and internal control over financial reporting could also cause investors to lose confidence in our reported financial and other information, which would likely have a negative effect on the trading price of our common stock. In addition, if we are unable to continue to meet these requirements, we may not be able to remain listed on Nasdaq. We are not currently required to comply with the SEC rules that implement Section 404 of SOX and are therefore not required to make a formal assessment of the effectiveness of our internal control over financial reporting for that purpose. As a public company, we will be required to provide an annual management report on the effectiveness of our internal control over financial reporting.

While preparing the consolidated financial statements that are included in this prospectus, our management has determined that we have material weaknesses in our internal control over financial reporting. The identified material weaknesses were associated with the following areas:

• Insufficient and appropriate controls were not established associated with the recording of journal entries;

• Ineffective controls established to ensure proper reconciliations between our transaction management platform and our general ledger which affected the completeness and accuracy of our revenue recognition and commission and other agent related costs; and

• Inadequate establishment of a compliant SOX control environment including items such as instituting formal and written accounting policies consistent with GAAP, having documented internal controls which are also associated with control owners, and having a sufficient number of employees with experience establishing and maintaining an effective internal control over financial reporting environment.

We are establishing plans and working to remediate the material weaknesses identified above including taking the following actions:

• Contract with SOX consultants as well as establish an internal audit team;

• Perform an enterprise-wide SOX environment scoping analysis as well as develop an implementation plan;

• Hire additional personnel within the financial reporting team who have prior experience establishing, maintaining, and working within SOX environments;

• Create policies and procedures regarding the creation and oversight of journal entries as well as implement systematic restrictions following appropriate segregation of duties methodologies;

• Establish controls ensuring appropriate GAAP is identified and applied to new or modified revenue transaction streams; and

• Institute regular and recurring detailed reconciliations between our transaction management systems and our general ledger.

31

Our independent registered public accounting firm is not required to formally attest to the effectiveness of our internal control over financial reporting until after we are no longer an “emerging growth company” (“EGC”) as defined in the JOBS Act. At such time, our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our internal control over financial reporting is documented, designed, or operating. The actions that we are taking are subject to ongoing executive management review and will also be subject to audit committee oversight. If we are unable to successfully remediate the material weaknesses, or if in the future, we identify further material weaknesses in our internal control over financial reporting, we may not detect errors on a timely basis and our financial statements may be materially misstated.

The COVID-19 pandemic may harm our businesses, financial condition and results of operations.

The COVID-19 pandemic is having a profound effect on the global economy and financial markets. In the United States, federal, state, and local governments continue to react to this evolving public health crisis by, among other actions, recommending or requiring the avoidance of gatherings of people or significantly or entirely curtailing activities categorized as non-essential. We are constantly monitoring the spread of COVID-19, including the emergence of new variants of the virus, especially in the states and regions in which we currently operate. In the second quarter of 2020, the COVID-19 pandemic significantly and adversely affected residential real estate transaction volume. Since that time, in addition to general macroeconomic instability, many governmental authorities put in place limitations on in-person activities related to the sale of residential real estate, such as prohibitions or restrictions on in-home showings, inspections and appraisals, and availability or hours of local real property documentation searches and new recordings. Although these measures were largely lifted later in 2020, there can be no assurance that such measures will not be implemented in the future or that the pandemic will not again adversely affect transaction volume. This unprecedented situation has created considerable risks and uncertainties for the U.S. real estate services industry in general and for us in particular, including those arising from the potential adverse effects on the economy as well as risks related to employees, independent agents, and consumers. The extent of the impact of the pandemic on our business and financial results will depend largely on future developments, including the extent and duration of the spread of the outbreak, the extent of governmental regulation (including, but not limited to, local, state and/or federally mandated “shelter in place” or other regulations that, for example, preclude or strictly limit open houses or in-person showings of properties), the timing, availability, and effectiveness of vaccines and vaccination rates, the impact on capital and financial markets and the related impact on consumer confidence and spending, and the magnitude of the financial and operational consequences to our agents and brokers, all of which are highly uncertain and cannot be predicted.

Our value proposition for agents includes allowing them to keep more of their commissions than traditional real estate brokerages do, which is not typical in the real estate industry. If agents do not understand our value proposition, we might not be able to attract, retain and incentivize agents.

Providing technological tools and a transaction fee system that allows agents to retain more of their commissions is a key component of our agent and broker value proposition, and, if agents do not understand our value proposition, our ability to attract and retain agents may be harmed. Unlike traditional brokerages, we offer a fixed fee for agents, allowing the agents to keep more of their commissions than they would be able to keep with a traditional brokerage. Agents might not understand or appreciate this value if agents do not appreciate other components of our value proposition including the systems and tools that we provide to agents, and the professional development opportunities we create and deliver. If agents do not understand the elements of our agent value proposition, or do not perceive it to be more valuable than the models used by most competitors, we might not be able to attract, retain and incentivize new and existing agents to grow our revenues, which would have an adverse effect on our business, financial condition and results of operations.

32

If we are unable to sell the mortgage loans that we originate, then we will need to service the loans ourselves or hire a third-party servicer, and either option could impose significant costs, time, and resources on us. Additionally, we may become more exposed to adverse market conditions affecting mortgage loans.

If we are unable to sell the mortgage loans that we originate through our subsidiary, FINco Mortgage, LLC doing business as “Minute Mortgage”, then we could be subject to significant costs, time, and resources spent on Minute Mortgage. We intend to sell the mortgage loans that we originate through Minute Mortgage to investors in the secondary mortgage market. Our ability to sell originated loans in the secondary market depends largely on there being sufficient liquidity in the secondary market and our compliance with contracts with investors who have agreed to purchase the loans. If we were unable to sell loans originated through Minute Mortgage, then we may need to establish a servicing platform or hire a third party to service the loans. We do not currently have a servicing platform and establishing such a platform may result in significant costs and require substantial time and resources from management. Additionally, we may be unable to retain a third-party servicer on economically feasible terms.

Our inability to sell loans in the secondary market would also expose us to adverse market conditions affecting mortgage loans. For example, we may be required to write down the value of the loan, which reduces the amount of our current assets. Additionally, if a homeowner were unable to make his or her mortgage payments, then we may be required to foreclose on the home securing the loan. In these situations, the proceeds from selling the home may be significantly less than the remaining amount outstanding under the loan. Finally, if we borrowed under one of our warehouse credit facilities for the loan, then we may be required to immediately repay the borrowed amount, which reduces our cash on hand that is available for other corporate uses. As a result, our inability to sell loans originated through Minute Mortgage may adversely affect our business, financial condition and results of operations.

A significant adoption by consumers of alternatives to full-service agents or loan originators could harm our business, prospects and results of operations.

A significant increase in consumer use of technology that eliminates or minimizes the role of the real estate agent or mortgage loan originator could have an adverse effect on our business, prospects and results of operations. These options include direct-buyer companies that purchase directly from the seller at below-market rates in exchange for speed and convenience, and then resell them shortly thereafter at market prices, and discounters who reduce the role of the agent in order to offer sellers a low commission or a flat fee while giving rebates to buyers. How consumers want to buy or sell houses and finance their purchase will determine if these models reduce or replace the long-standing preference for full-service agents and loan originators.

While real estate brokers using historical real estate brokerage models typically compete for business primarily on the basis of services offered, reputation, utilization of technology, personal contacts and brokerage commission, participants pursuing non-traditional methods of marketing real estate may compete in other ways, including companies that employ technologies intended to disrupt historical real estate brokerage models or minimize or eliminate the role brokers and sales agents perform in the home sale transaction process.

A growing number of companies are competing in non-traditional ways for a portion of the gross commission income generated by home sale transactions. For example, listing aggregators and other web-based real estate service providers compete for our company-owned brokerage business by establishing relationships with independent sales agents and/or buyers and sellers of homes, and actions by such listing aggregators have and may continue to put pressure on our and other industry participants’ revenues and profitability. If these new systems of purchasing and selling homes gain market share in the residential real estate industry, it could disintermediate real estate brokers and independent sales agents from buyers and sellers of homes either entirely or by reducing brokerage commissions that may be earned on those transactions. If these alternatives

33

to full-service agents were to gain traction in the market, it could harm our business, financial condition and results of operations.

Our business depends on successfully establishing our brand and developing brand awareness, and a failure to establish, promote and maintain our brand may hurt our ability to grow our business, particularly in markets where we have limited brand recognition.

Our brand is not yet as well-known as other real estate brands. Our business depends in part on successfully establishing and promoting our brand in the new markets that we enter, and any failure to protect and enhance our brand would hurt our ability to grow our business in new markets. As such, maintaining, protecting, and enhancing our brand is critical to growing our business, particularly in markets where we have limited brand recognition and compete with well-known traditional brokerages with longer histories and established community presence. This will partially depend on our ability to continue to provide high-value, customer-oriented, and differentiated services, and we may not be able to do so effectively. Enhancing and maintaining the quality of our brand may require us to make substantial investments, such as in marketing and advertising, technology, and agent training. In addition, despite these investments, our brand could be damaged from other events that are or may be beyond our control, such as litigation and claims, our failure to comply with local laws and regulations, and illegal activity such as phishing scams or cybersecurity attacks targeted at us, our customers, or others. We also believe that developing and maintaining widespread awareness of our brand is critical to attracting new customers. If we fail to successfully establish, promote and maintain our brand, our business could be harmed.

Inasmuch as our business is in part dependent on our brand, our business may be subject to risks related to events and circumstances that have a negative impact on our brands in our current or new markets. If we are exposed to adverse publicity or events that damage our brand and/or image, including through action by our agents, our business may suffer from the deterioration in or failure to establish our brand and image.

Actions by our franchisees, their independent sales agents, or independent sales agents of our company-owned brokerages could adversely affect our reputation and subject us to liability.

The negligent or intentional actions or poor-quality service of our franchisees and their independent sales agents could harm our business. Our franchisees are independent business operators and we do not exercise control over their day-to-day operations. Our franchisees may not successfully operate a real estate brokerage business in a manner consistent with our standards or industry standards or may not affiliate with effective independent sales agents or employees. Further, if our franchisees or their independent sales agents were to engage in negligent or intentional misconduct or provide diminished quality of service to customers, our image and reputation may suffer and adversely affect our results of operations. Negligent or improper actions involving our franchisees, including regarding their relationships with independent sales agents, clients and employees, may also lead to direct claims against us based on theories of vicarious liability, negligence, joint operations and joint employer liability which, if determined adversely, could increase costs, negatively impact the business prospects of our franchisees and subject us to incremental liability for their actions.

The actions of the independent sales agents engaged by our company-owned brokerages could also adversely affect our reputation and subject us to liability. Our company-owned brokerage operations rely on the performance of independent sales agents. If the independent sales agents were to provide lower quality services to our customers or engage in negligent or intentional misconduct, such as failing to make necessary disclosures about properties sold by our agents, our image and reputation could be adversely affected. For example, we have been subject to litigation alleging that we are vicariously responsible for our agents’ failures to disclose material information about the condition of a property sold, such as the presence of physical defects, defects to title, or restrictive zoning regulations. In addition, we could also be subject to litigation and

34

regulatory claims arising out of their performance of brokerage services, which if adversely determined, could adversely affect our business.

A decline in home sale inventory could impact the number of home sale transactions we close and negatively impact our business and financial condition.

A decline in home sale inventory could impact the number of transactions we close and negatively impact our business and financial condition. Home sale inventory levels for the existing U.S. home market have been declining over the past several years due to strong demand, in particular in certain highly sought-after geographies and at lower price points. According to NAR, as of April 8, 2021, the inventory of existing homes for sale in the United States is the lowest it has been since 1982. As of the end of February 2021, the inventory of homes for sale stood at a historic low of 1.07 million (1.03 million of existing homes and 42,000 new single-family homes), which is equivalent to a near-historic low of 1.8 months of the average monthly sales of 582,917 (518,333 of existing homes and 64,583 of new single-family homes) with the historic low being 1.7 months in December 2020 and January 2021. If interest rates were to rise, homebuilders may determine to discontinue or delay new projects, which could further contribute to inventory constraints. In addition, real estate industry models that purchase homes for rental or corporate use (rather than immediate resale) can put additional pressure on available housing inventory. While a continuation of low inventory levels may contribute to favorable demand conditions and improved home sale price growth, insufficient inventory levels have a negative impact on home sale volume growth and can contribute to a reduction in housing affordability, which can result in some potential home buyers deferring entry into the residential real estate market. Ongoing constraints on home inventory levels may continue to have an adverse impact on the number of home sale transactions closed by us and our franchisees, which would have a negative effect on our business, financial condition and results of operations.

We may be unable to maintain or improve our current technology offerings at a competitive level or develop new technology offerings that meet customer or agent expectations. Our technology offerings may also contain undetected errors or vulnerabilities.

We may be unable to maintain or improve our current technology offerings at a competitive level or develop new technology offerings that meet customer or agent expectations, and any failure to do so may harm our business. Our suite of technology offerings, including RealSmart Broker, RealSmart Agent and RealSmart Client, is key to our competitive plan for hiring and retaining lead agents. Developing, improving and maintaining our innovative technology, including the digital tools we have created to assist agents in facilitation transactions, is challenging and expensive. For example, the nature of development cycles may result in delays between the time we incur expenses and the time we introduce new technology and generate revenue, if any, from those investments. Anticipated demand for a technology offering, either from agents or homebuyers could also decrease after the development cycle has commenced, and we would not be able to recoup costs, which may be substantial, that we incurred.

As industry standards and expectations evolve and new technology becomes available, we may be unable to identify, design, develop, and implement, in a timely and cost-effective manner, new technology offerings to meet those standards and expectations. As a result, we may be unable to compete effectively, and to the extent our competitors develop new technology offerings faster than us, they may render our offerings noncompetitive or obsolete. Additionally, even if we implemented new technology offerings in a timely manner, our customers and agents may not accept or be satisfied by the offerings.

Furthermore, our development and testing processes may not detect errors and vulnerabilities in our technology offerings prior to their implementation. Any inefficiencies, errors, technical problems, or vulnerabilities arising in our technology offerings after their release could reduce the quality of our services or

35

interfere with our customers’ and agents’ access to and use of our technology and offerings and harm our business. Should any of these issues occur, they could result in harm to our business, financial condition and results of operations.

Some of our potential losses may not be covered by insurance. We may not be able to obtain or maintain adequate insurance coverage.

We maintain insurance to cover costs and losses from certain risk exposures in the ordinary course of our operations, but our insurance may not cover one hundred percent of the costs and losses from all events. We are responsible for certain retentions and deductibles that vary by policy, and we may suffer losses that exceed our insurance coverage limits. We may also incur costs or suffer losses arising from events against which we have no insurance coverage. In addition, large-scale market trends or the occurrence of adverse events in our business may raise our cost of procuring insurance or limit the amount or type of insurance we are able to secure. We may not be able to maintain our current coverage, or obtain new coverage, in the future on commercially reasonable terms or at all. Incurring uninsured or underinsured costs or losses could harm our business, financial condition and results of operations.

Our financial results are affected by the operating results of our franchisees.

We generate revenue from franchisees based on the number of agents at the franchisee and transactions closed, in each case primarily based on a flat-fee per agent or transaction, as applicable. Accordingly, our financial results are dependent upon the operational and financial success of our franchisees. If industry trends or economic conditions worsen or do not improve or if one or more of our top performing franchises become less competitive or leaves our franchise system, our franchisees’ financial results may worsen and our revenues from franchisees may decline, which could have an adverse effect on our business, financial condition and results of operations. In addition, we may have to increase our bad debt and note reserves. We may also have to terminate franchisees due to non-payment.

In addition, our franchisees face the same market pressures generally facing the industry (such as margin compression) and may seek lower fees or higher incentives from us. If franchisees, in particular our largest franchisees that have substantial agent counts, fail to renew their franchise agreements (or otherwise leave our franchise system), or if we induce franchisees to renew these agreements through lower fees or higher incentives, then our revenues may decrease, and profitability may be lower than in the past. If any of these risks were to occur, it may harm our business, financial condition and results of operations.

We may evaluate acquisitions in order to accelerate growth but might not succeed in identifying suitable candidates or may acquire businesses that negatively impact us.

As part of our growth strategy, we may evaluate the potential acquisition of businesses offering products or services that complement our services offerings but may not succeed in identifying suitable candidates, may not complete an acquisition of a suitable candidate or may acquire businesses that negatively impact us. If we identify a business that we deem to be suitable for acquisition and complete an acquisition, our evaluation may prove faulty and the acquisition may prove unsuccessful. We may also be unable to successfully complete the acquisition of a business that we have deemed to be suitable for acquisition after devoting resources towards the acquisition. In addition, an acquisition may prove unsuccessful if we fail to effectively execute a post-acquisition integration strategy. We may be unable to successfully integrate the systems and personnel of the acquired businesses. For example, if we are unable to successfully integrate the systems and personnel related to our recent acquisitions of PalmerHouse Properties, LLC and its affiliates or Champions Real Estate Group and its affiliates, we may not realize the growth or benefits sought through these acquisitions and our business, financial condition, and results of operations may be harmed. An acquisition could negatively impact our culture or undermine its core values. Acquisitions could disrupt our existing operations or cause management

36

to divert its focus from our core business. An acquisition could cause potentially dilutive issuances of equity securities, incurrence of debt, contingent liabilities or could cause us to assume or incur unknown or unforeseen liabilities. From time to time, we acquire brokerages in order to accelerate growth and to provide us greater access to a particular market and might not succeed in identifying suitable candidates or we may acquire brokerages that negatively impact us. For example, agents may decide to leave the brokerage following its acquisition. Any of these situations could harm our business, financial condition or results of operations.

We may not realize the expected benefits from our title services joint ventures or from other existing or future joint ventures.

Our title services joint ventures may be adversely affected by changes affecting the title industry, including but not limited to regulatory changes, high levels of competition and decreases in operating margins. In addition, our joint venture or our partner could face operational or liquidity risks, such as litigation or regulatory investigations that may arise. Our joint ventures are serviced by our other operating companies and could be subject to fluctuation due to staffing other operational impacts to the parent organization. Any of the foregoing could have an adverse impact on our earnings and dividends from our title agencies. Operational, liquidity, regulatory, macroeconomic and competitive risks also apply to our other existing joint ventures and would likely apply to any joint venture we may enter into in the future. If any of these risks were to occur, they could adversely affect our business, financial condition and results of operations.

We may be unable to attract homebuyers and home sellers to our website and mobile application in a cost-effective manner.

Our website and mobile application are our primary channels for meeting new customers. Accordingly, our success depends on our ability to attract homebuyers and home sellers to our website and mobile application in a cost-effective manner. To meet new customers, we rely heavily on traffic generated from search engines, traffic generated on the recommendation of our agents by our agents’ clients, and downloads of our mobile application from mobile application stores. We also rely on marketing methods such as targeted email campaigns, paid search advertising, social media marketing, yard sign marketing, and traditional media.

The number of visitors to our website and downloads of our mobile application depend in large part on how and where our website and mobile application rank in Internet search results and mobile application stores, respectively. While we use search engine optimization to help our website rank highly in search results, maintaining or improving our search result rankings is outside our control. Internet search engines frequently update and change their ranking algorithms, referral methodologies, or design layouts, which determine the placement and display of a user’s search results. In some instances, Internet search engines may change these rankings in order to promote their own competing services or the services of one or more of our competitors. Similarly, mobile application stores can change how searches are displayed and how mobile applications are featured. For instance, editors at the Apple iTunes Store can feature prominently editor-curated mobile applications and cause the mobile application to appear larger than other applications or more visibly on a featured list.

Additionally, our marketing efforts may fail to attract the desired number of new customers for a variety of reasons, including the creative treatment for our advertisements may be ineffective or new third-party email delivery policies that make it more difficult for us to execute targeted email campaigns.

Cybersecurity incidents, data security incidents or other cybercrime could disrupt our business or result in the loss of critical and confidential information.

We and our partners, service providers, agents, and other third parties with which we interact rely extensively on information technology systems, including systems provided by third party service providers, including cloud-based systems and on premise servers, to record and process transactions and manage our operations,

37

among other matters. Cybersecurity incidents and other data security incidents directed at us, agents, our third-party service providers, or other third parties can range from uncoordinated individual attempts to gain unauthorized access to information technology systems to sophisticated and targeted measures known as advanced persistent threats. Cybersecurity incidents and other data security incidents can also vary in scope and intent from economically-driven attacks to malicious attacks targeting our key operating systems with the intent to disrupt, disable or otherwise cripple our operations and service offerings. This can include any combination of phishing attacks, insider threats, malware and/or viruses targeted at our key systems. Cybersecurity incidents and other data security incidents are also constantly evolving, increasing the difficulty of detecting and successfully defending against them. In the ordinary course of our business, we and our third-party service providers collect and store sensitive data, including our proprietary business information and intellectual property and that of our customers and employees, including personally identifiable information. Additionally, we rely on third parties and their security procedures for the secure storage, processing, maintenance, and transmission of information that are critical to our operations. Despite measures designed to prevent, detect, address, and mitigate cybersecurity incidents, such incidents may occur to us or our third-party providers and, depending on their nature and scope, could potentially result in the misappropriation, destruction, corruption, or unavailability of critical data and confidential or proprietary information (our own or that of third parties, including personally identifiable information of our customers and employees) and the disruption of business operations. Given the unpredictability of the timing, nature and scope of cyber-attacks and other security incidents, we cannot guarantee that the technologies we use will adequately secure the data we maintain, including confidential information and personal information, against such attacks, and we cannot entirely eliminate the risk of improper or unauthorized access to or disclosure of such data, or other security incidents that impact the integrity or availability of such data, or our systems and operations. Any such attempted or actual compromises to our security, systems, or information, or that of our third-party providers, could expose us to a risk of loss or misuse of personal, confidential or sensitive information, and cause customers, partners, agents, franchisees and other third parties to lose trust and confidence in us and stop using our website, mobile applications, and services. In addition, we may incur significant costs associated with mitigating the risk of future incidents, remediating any such incidents, which may include liability for stolen assets or information, repair of system damage, and compensation to customers, employees, and business partners, and other capital costs regarding systems technology, personnel, monitoring and other investments. We may also be subject to government enforcement proceedings and legal claims by private parties, which may include, fines and penalties, costs related to remediation, potential costs and liabilities arising from governmental, regulatory or third-party investigations, proceedings or litigation, diversion of management attention and harm to our reputation.

Moreover, the real estate industry is actively targeted by cyber-attacker attempts to conduct electronic fraudulent activity (such as phishing), security breaches and similar attacks directed at participants in real estate services transactions. These attacks, when successful, can result in fraud, including wire fraud related to the diversion of home sale transaction funds, or other harm, which could result in significant claims and reputational damage to us, our brands, our franchisees, and our independent sales agents and could also result in increases in our operational costs. For example, a cyber-attacker has contacted a customer via email, impersonating one of our agents, resulting in the customer wiring money to the cyber-attacker. These threats to our business may be wholly or partially beyond our control as our franchisees as well as our customers, franchisee and company-owned brokerage independent sales agents and their customers and third-party service providers may use e-mail, computers, smartphones and other devices and systems that are outside of our security control environment. In addition, real estate transactions involve the transmission of funds by the buyers and sellers of real estate and consumers or other service providers selected by the consumer may be the subject of direct cyber-attacks that result in the fraudulent diversion of funds, notwithstanding efforts we have taken to educate consumers with respect to these risks.

If cybersecurity incidents, other cybercrimes, or other data security incidents occur, they could harm our business, financial condition and results of operations.

38

We process, transmit, and store personal information, which is subject to various contractual commitments and data privacy and security laws, and any failure to comply with those commitments, laws and regulations could result in significant liability or reputational harm. Any actual or attempted unauthorized access to, or the unintended release of, this information could also result in a claim for damages, regulatory action, loss of business, or unfavorable publicity.

We process, transmit, and store personal information about our customers, agents, employees, franchisees, and representatives of our business partners. We process personal information to provide services and fulfill our obligations as an employer. As a result, we are subject to certain contractual terms, as well as federal, state, and foreign laws and regulations regarding personal information, including the Federal Trade Commission Act (and other of the Federal Trade Commission’s (“FTC”) regulations), and various state consumer protection and privacy laws, and therefore are subject to federal and state enforcement. We receive information, including personal information, from various sources, such as data aggregators and real estate databases, including the Multiple Listing Network Ltd. As a result, we are subject to additional contractual terms and commitments. In the event we no longer have access to our various sources of data, for example from an actual or perceived failure to comply with certain contractual commitments, this loss could significantly impact our business operations and costs, including our ability to provide our services.    

While we take measures to protect the security and privacy of this information, it is possible that our security controls over personal information and other practices we follow may not prevent the unauthorized access to, or the unintended release of, personal information. If such unauthorized access or unintended release occurs, we could suffer significant damage to our brand and reputation, customers could lose confidence in the security and reliability of our services, and we could incur significant costs to address and fix these security incidents. These incidents could also lead to lawsuits and regulatory investigations and enforcement actions.

Additionally, laws, regulations, and standards covering marketing and advertising activities conducted by telephone, email, mobile devices, and the internet, may be applicable to our business, such as the Telephone Consumer Protection Act (“TCPA”) (as implemented by the Telemarketing Sales Rule), the Controlling the Assault of Non-Solicited Pornography And Marketing Act (“CAN-SPAM”), and similar state consumer protection laws. We seek to comply with industry standards and are subject to the terms of our own privacy policies and privacy-related obligations to third parties. We strive to comply with all applicable laws, policies, legal obligations and industry codes of conduct relating to privacy and data security protection to the extent possible. However, it is possible that these obligations may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another and may conflict with other rules or regulations, making enforcement, and thus compliance requirements, ambiguous, uncertain, and potentially inconsistent. Any failure or perceived failure by us to comply with our privacy policies, privacy-related obligations to customers, agents, employees, franchisees, representatives of our business partners, or other third parties, or our privacy-related legal obligations, or any compromise of security that results in the unauthorized access to or unintended release of personally identifiable information or other agent or client data, may result in governmental enforcement actions, litigation, or public statements against us by consumer advocacy groups or others. Any of these events could cause us to incur significant costs in investigating and defending such claims and, if found liable, pay significant damages. Further, these proceedings and any subsequent adverse outcomes may cause us to incur significant costs, which could affect our business outcome or cause our agents and clients to lose trust in us, which could have an adverse effect on our reputation and business.

Any significant change to applicable laws, regulations or industry practices regarding the use or disclosure of personal information, or regarding the manner in which the express or implied consent of individuals (e.g., agents, customers or employees ) for the use and disclosure of personal information is obtained, could require us to modify our products and features, possibly in a material manner and subject to increased compliance costs, which may limit our ability to develop new products and features that make use of the personal information that

39

consumers voluntarily share, which could significantly impact our business operations and costs. For example, California recently enacted legislation, the California Consumer Privacy Act (“CCPA”), that became operative on January 1, 2020 and became enforceable by the California Attorney General on July 1, 2020, along with related regulations which came into force on August 14, 2020. The CCPA gives California residents expanded rights related to their personal information, including the right to access and delete their personal information, and receive detailed information about how their personal information is used and shared and increases the privacy and security obligations of businesses handling personal information. The CCPA is enforceable by the California Attorney General and there is also a private right of action relating to certain data security incidents. The CCPA provides for civil penalties for violations, which could result in statutory penalties of up to $2,500 per violation, or up to $7,500 per violation if the violation is intentional. We cannot yet fully predict the impact of the CCPA or subsequent guidance on our business or operations, but it may require us to further modify our data processing practices and policies and to incur substantial costs and expenses in an effort to comply. Decreased availability and increased costs of information could adversely affect our ability to meet our agents’ requirements and could have an adverse effect on our business, results of operations, and financial condition.

Additionally, a recent California ballot initiative, the California Privacy Rights Act (“CPRA”), imposes additional data protection obligations on companies doing business in California, including additional consumer rights processes and opt-outs for certain uses of sensitive data and sharing of personal information starting in January 2023. As voted into law by California residents in November 2020, the CPRA could have an adverse effect on our business, results of operations, and financial condition. The effects of the CCPA and CPRA are potentially significant and may require us to modify our data collection or processing practices and policies and to incur substantial costs and expenses in an effort to comply and increase our potential exposure to regulatory enforcement and/or litigation. Any of the foregoing could adversely affect our business, financial condition and results of operations. Also, Virginia has adopted a new state data protection act referred to as the Virginia Consumer Data Protection Act, which is set to take effect on January 1, 2023. Further, Colorado has adopted a new state data protection act titled the Colorado Privacy Act, which is set to take effect on July 1, 2023. Similar laws have been proposed in other states and at the federal level, and if passed, such laws may have potentially conflicting requirements that would make compliance challenging, as well as potentially resulting in further uncertainty and requiring us to incur additional costs and expenses in an effort to comply.

Our agents operate as independent contractors and are responsible for their own data privacy compliance. However, we provide training and our platform provides tools and security controls to assist our agents with their data privacy compliance to the extent they store relevant data on our platform. However, if an agent on our platform were to be subject to a claim for breach of data privacy laws, we could be found liable for their claims due to our relationship, which can require us to take more costly data security and compliance measures or to develop more complex systems, and could also result in significant costs to us regarding any fines and penalties, costs related to remediation, potential costs and liabilities arising from governmental, regulatory or third-party investigations, proceedings or litigation, diversion of management attention and harm to our reputation. Also, any suspected liability associated with such claims may expose us to a risk of loss and could also result in reputational harm.

We offer our independent agents the opportunity to earn a greater portion of their commissions through our revenue share program which pays under a multi-tiered compensation structure similar in some respects to network marketing. Network marketing is subject to intense government scrutiny, and regulation and changes in the law, or the interpretation and enforcement of the law, might adversely affect our business.

Various laws and regulations in the United States and other countries regulate network marketing. These laws and regulations exist at many levels of government in many different forms, including statutes, rules, regulations, judicial decisions, and administrative orders. Network marketing regulations are inherently fact-based and often do not include “bright line” rules. Additionally, we are subject to the risk that the regulations, or a regulator’s interpretation and enforcement of the regulations, could change. From time to time, we may

40

receive requests to supply information regarding our revenue share plan to regulatory agencies. We could potentially in the future be required to modify our revenue sharing plan in certain jurisdictions in order to comply with the interpretation of the regulations by local authorities.

In the United States, the FTC has entered into several highly publicized settlements with network marketing companies that required those companies to modify their compensation plans and business models. Those settlements resulted from actions brought by the FTC involving a variety of alleged violations of consumer protection laws, including misleading earnings representations by the companies’ independent distributors, as well as the legal validity of the companies’ business model and distributor compensation plans. FTC determinations such as these have created an ambiguity regarding the proper interpretation of the law and regulations applicable to network marketing companies in the U.S. Although a consent decree between the FTC and a specific company does not represent judicial precedent, FTC officials have indicated that the network marketing industry should look to these consent decrees, and the principles contained therein, for guidance. Additionally, following the issuance of these consent decrees, the FTC issued non-binding guidance to the network marketing industry, suggesting it was intending to reinforce the principles contained in the consent decrees and provide other operational guidance to the network marketing industry.

While we strive to ensure that our overall business model, and revenue share plan, complies with regulations in each of our markets, we cannot assure you that a regulator, if it were to review our business, would agree with our assessment and would not require us to change one or more aspects of our operations. Any action against us in the future by the FTC or another regulator could adversely affect our operations.

We cannot predict the nature of any future law, regulation, or guidance, nor can we predict what effect additional governmental regulations, judicial decisions, or administrative orders, when and if promulgated, would have on our business. Failure by us, or our independent agents, to comply with these laws, could adversely affect our business.

In addition, this revenue share fee plan option requires complex tracking and administration of the collection of fees and monies and the payout of over-rides and revenue sharing distributions as per the fee plan documents, exhibits to the participating agents’ Independent Contractor Agreements (“ICAs”), Franchise Addendums and Franchise Disclosure Documents (“FDDs”) and Policies and Procedures Manuals; and is heavily reliant upon outside software that is integrated with our RealSmart Technology Suite and assists the company in the management and administration of this revenue sharing program. Failure by us, our independent franchises, or our independent agents to not follow or administer the plan guidelines, plan policies and procedures, knowingly or unknowingly, and/or any failure of the outside software company or its integration with our technology suite could harm us and/or cause us to alter or discontinue this program, or be party to an action against us, and could adversely affect our business.

The third-party networks, mobile infrastructure and hosting services that we depend on may fail, and we may be unable to maintain and scale the technology underlying our offerings.

Our brand, reputation and ability to attract homebuyers and home sellers and provide our offerings depend on the reliable performance of third-party networks and mobile infrastructure to provide our technology offerings to consumers and agents. If such performance fails, we may be unable to maintain and scale the technology underlying our offerings. The proper operation of these networks and infrastructure is beyond our control, and if they fail, we may be unable to deliver our services to our customers or provide the necessary support for our agents.

As the number of homebuyers and home sellers, agents, and listings shared on our website and mobile application and the extent and types of data grow, our need for additional network capacity and computing

41

power will also grow. Operating our underlying technology systems is expensive and complex, and we could experience operational failures. If we experience interruptions or failures in these systems, whether due to system failures, computer viruses, physical or electronic break-ins, attacks on domain name servers or other third parties on which we rely, or for any reason, the security and availability of our services and technologies could be affected. Any such event could harm our reputation, result in a loss of consumers, customers and agents using our offerings, and cause us to incur additional costs.

Moreover, if the facilities that host our website and mobile application were to experience outages or downtimes for any reason, including human error, natural disaster, power loss, telecommunications failure, physical or electronic break-ins, terrorist attack, or act of war, we could suffer a significant interruption of our website and mobile application while we implement our disaster recovery procedures. Any service interruption may be extended if we discover previously unknown errors in our disaster recovery procedures.

Any disruptions or failures within our third-party networks, mobile infrastructure, or our hosting facility could result in our inability to maintain and scale the technology underlying our offerings and harm our business.

Monetary policies of the federal government and its agencies and potential reform of Fannie Mae or Freddie MAC may harm our operations.

Our business is significantly affected by the monetary policies of the federal government and its agencies. We are particularly affected by the policies of the Federal Reserve Board. These policies regulate the supply of money and credit in the United States and impact the real estate market through their effect on interest rates as well as the cost of our interest-bearing liabilities.

Increases in mortgage rates adversely impact housing affordability and we have been and could again be negatively impacted by a rising interest rate environment. For example, a rise in mortgage rates could result in decreased home sale transaction volume if potential home sellers choose to stay with their lower mortgage rate rather than sell their home and pay a higher mortgage rate with the purchase of another home or, similarly, if potential home buyers choose to rent rather than pay higher mortgage rates. Increases in mortgage rates could also reduce the number of home sale refinancing transactions, which could adversely impact our earnings from our mortgage origination joint venture as well as the revenue stream of our title and settlement services offering. Changes in the Federal Reserve Board’s policies, the interest rate environment, and the mortgage market are beyond our control, are difficult to predict, and could have an adverse effect on our business, financial condition and results of operations.

Numerous pieces of legislation seeking various types of changes for GSEs have been introduced in Congress to reform the U.S. housing finance market including among other things, changes designed to reduce government support for housing finance and the winding down of Fannie Mae or Freddie Mac over a period of years. Legislation, if enacted, or additional regulation which curtails Fannie Mae’s and/or Freddie Mac’s activities and/or results in the wind down of these entities could increase mortgage costs and could result in more stringent underwriting guidelines imposed by lenders or cause other disruptions in the mortgage industry. Other legislation or regulation limiting participation of the Federal Housing Administration and Department of Veterans Affairs could increase mortgage costs or limit availability of mortgages for consumers. Any of the foregoing could harm the housing market in general, which would negatively impact our business, financial condition and results of operations.

We could be subject to significant losses if banks do not honor our escrow and trust deposits.

Our title services businesses act as escrow agents for numerous customers, and some of our brokerage entities hold end consumer funds in trust accounts. These title services businesses and brokerage entities face the risk of loss if banks do not honor our escrow and trust deposits. As an escrow agent, we receive money from

42

customers to hold until certain conditions are satisfied. Upon the satisfaction of those conditions, we release the money to the appropriate party. We deposit this money with various banks and while these deposits are not assets of our company (and therefore excluded from our consolidated balance sheet), we remain contingently liable for the disposition of these deposits. These escrow and trust deposits totaled $8.2 million at December 31, 2020. The banks may hold a significant amount of these deposits in excess of the federal deposit insurance limit. If any of our depository banks were to become unable to honor any portion of our deposits, customers could seek to hold us responsible for such amounts and, if the customers prevailed in their claims, we could be subject to significant losses.

We rely on business data to make decisions, and errors or inaccuracies in such data may adversely affect our business decisions and the customer experience.

We regularly analyze business data to evaluate growth trends, measure our performance, establish budgets, and make strategic decisions, and any errors or inaccuracies in such data may adversely impact our business. Much of this data is internally generated and has not been independently verified. There are inherent challenges in measuring and interpreting data, and we cannot be certain that the data are accurate. Errors or inaccuracies in the data could result in poor business decisions, resource allocation, or strategic initiatives. For example, if we overestimate traffic to our website and mobile application, we may not invest an adequate amount of resources in attracting consumers or we may hire more lead agents in a given market than necessary to meet customer demand. If any of these errors or inaccuracies occur, it could adversely affect our business decisions and the customer experience.

The estimates of market opportunity and forecasts of market growth included in this prospectus may prove to be inaccurate, and even if the market in which we compete achieves the forecasted growth, our business could fail to grow at similar rates, if at all.

Market opportunity estimates and growth forecasts included in this prospectus are subject to significant uncertainty and are based on assumptions and estimates that may not prove to be accurate. The variables that go into the calculation of our market opportunity are subject to change over time, and there is no guarantee that our market opportunity estimates will reflect actual revenue that we will generate from our platform in the future. Any expansion in our markets depends on a number of factors, including the cost, performance, and perceived value associated with our platform and the products and services of our competitors. Even if the markets in which we compete achieve the forecasted growth, our business could fail to grow at similar rates, if at all.

Loss of our current executive officers or other key management or our inability to attract and retain other qualified personnel could significantly harm our business.

We depend on the industry experience and talent of our current executives, in particular our Chief Executive Officer, Matthew Widdows, and a loss of those executives could harm our business. We also believe that our future results will depend in part upon our ability to attract and retain highly skilled and qualified management and other personnel. The loss of our executive officers could have an adverse effect on our operations because other officers may not have the experience and expertise to readily replace these individuals. In addition, changes in executives and key personnel could be disruptive to our business and require additional time and attention from our remaining executives and key personnel. We do not have any key person insurance. To the extent that one or more of our top executives or other key management personnel depart, our business and operations may be adversely affected.

43

Risks Related to Legal and Regulatory Environment

Employee or agent litigation and unfavorable publicity could negatively affect our future business.

Employee or agent litigation and unfavorable publicity could negatively affect our future business. Our employees or agents may, from time to time, bring lawsuits against us alleging injury, creating a hostile workplace, discrimination, wage and hour disputes, sexual harassment, or other employment issues. We have faced employment claims such as disputes over employment agreements or reasons for termination. Coupled with the expansion of social media platforms and similar devices that allow individuals access to a broad audience, claims can have a significant negative impact on some businesses. If we were to face any claims related to our employees or agents, our business, financial condition and results of operations could be negatively affected.

We may experience significant claims relating to our operations, and losses resulting from fraud, misappropriation of funds or misconduct.

We issue title insurance policies which provide coverage for real property to mortgage lenders and buyers of real property. When acting as a title agent issuing a policy on behalf of an underwriter, our insurance risk is typically limited to the first five thousand dollars for claims on any one policy, though our insurance risk is not limited if we are negligent. Our title underwriter typically underwrites title insurance policies of up to $1 million. To date, our title underwriter has experienced claims losses that are significantly below the industry average; however, our claims experience could increase in the future, which could negatively impact the profitability of that business.

We may also be subject to legal claims or additional claims losses arising from the handling of escrow transactions and closings by our owned title agencies or our underwriter’s independent title agents. We carry errors and omissions insurance for errors made by our company-owned brokerage business during the real estate settlement process as well as errors by us related to real estate services.

Our franchise agreements also require our franchisees to name us as an additional insured on their errors and omissions and general liability insurance policies. The occurrence of a significant claim in excess of our insurance coverage (including any coverage under franchisee insurance policies) in any given period could have an adverse effect on our financial condition and results of operations during the period. In addition, insurance carriers may dispute coverage for various reasons and there can be no assurance that all claims will be covered by insurance.

Fraud, defalcation and misconduct by employees are also risks inherent in our business, particularly given the high transactional volumes in our company-owned brokerage and affiliated business services. We may also from time to time be subject to liability claims based upon the fraud or misconduct of our franchisees. To the extent that any loss or theft of funds substantially exceeds our insurance coverage, our business could be adversely affected.

There may be adverse financial and operational consequences to us and our franchisees if independent sales agents are reclassified as employees.

There may be adverse financial and operational consequences to us and our franchisees if independent sales agents are reclassified as employees. The legal relationship between residential real estate brokers and licensed sales agents throughout most of the real estate industry historically has been that of independent contractors. Although we believe our classification practices are proper and consistent with the legal framework for such classification, our company-owned brokerage operations could face substantial litigation or disputes in direct claims or regulatory procedures, including the risk of court or regulatory determinations that

44

certain groups of real estate agents should be reclassified as employees and entitled to unpaid minimum wage, overtime, benefits, expense reimbursement and other employment obligations. Franchisees affiliated with one of our brands face the same risks with respect to their affiliated independent sales agents. In addition, our franchise business may face similar claims as an alleged joint employer of an affiliated franchisee’s independent sales agents.

Real estate laws generally permit brokers to engage sales agents as independent contractors. Federal and state agencies have their own rules and tests for classification of independent contractors as well as to determine whether employees meet exemptions from minimum wages and overtime laws. These tests consider many factors that also vary from state to state. The tests continue to evolve based on state case law decisions, regulations and legislative changes. There is active worker classification litigation in numerous jurisdictions against a variety of industries—including residential real estate brokerages—where the plaintiffs seek to reclassify independent contractors as employees or to challenge the use of federal and state minimum wage and overtime exemptions.

Certain jurisdictions, such as California where we have company-owned and franchised brokerages, have adopted or are considering adopting standards that are significantly more restrictive than those historically used in wage and hour cases. Under the newer test, an individual is considered an employee unless the hiring entity satisfies three specific criteria that focus on control of the performance of the work and whether the nature of the work involves a separate trade that is outside the usual course of the hiring entity’s business.

Similar to California, a number of other states have separate statutory structures and existing case law that articulate different, less stringent standards for real estate agents operating as independent contractors. How these differing tests will be reconciled is presently unclear, and given the evolving nature of this issue, we are currently unable to estimate what impact, if any, this would have on our operations or financial results.

Significant sales agent reclassification determinations in the absence of available exemptions from minimum wage or overtime laws, including damages and penalties for prior periods (if assessed), could be disruptive to our business, constrain our operations in certain jurisdictions and could harm our operational and financial performance.

The real estate business is highly regulated and any failure to comply with such regulations or any changes in such regulations could adversely affect our business.

We and our franchisees operate in the real estate business, which is highly regulated, and any failure to comply with such regulations or any changes in such regulations could adversely affect our business.

We and our franchisees (other than in commercial brokerage transactions) must comply with the Real Estate Settlement Procedures Act (“RESPA”). RESPA and comparable state statutes, among other things, restrict payments which real estate brokers, agents and other settlement service providers may receive for the referral of business to other settlement service providers in connection with the closing of real estate transactions. Such laws may to some extent restrict preferred vendor arrangements involving our franchisees. RESPA and similar state laws also require timely disclosure of certain relationships or financial interests that a broker has with providers of real estate settlement services.

We and our franchisees must comply with laws and regulations regarding the proper licensure of our businesses. If we or our franchisees fail to comply with the requirements governing the licensing of brokerages, mortgage and title businesses in the jurisdictions in which we operate, then our ability to operate those businesses in those jurisdictions may be harmed. We as a brokerage, our franchisees, and our agents must comply with the requirements governing the licensing and conduct of real estate brokerage and brokerage-related businesses in the markets where we operate. Furthermore, we are also required to comply with the

45

requirements governing the licensing and conduct of mortgage and title and settlement businesses in the markets where we operate. Due to the geographic scope of our operations, we, our franchisees, and our agents may not be in compliance with all of the required licenses at all times. Additionally, if we enter into new markets, we may become subject to additional licensing requirements. If we, our franchisees, or our agents fail to obtain or maintain the required licenses or fail to strictly adhere to associated regulations, the relevant government authorities may order us to suspend relevant operations or impose fines or other penalties.

We and our franchisees are also subject to various other rules and regulations such as the Gramm-Leach-Bliley Act, the CCPA, the Fair Housing Act, laws and regulations regarding franchises, and other laws and regulations in the jurisdictions in which we do business. For example, the sale of franchises is regulated by various state laws as well as by the FTC. The FTC requires that franchisors make extensive disclosure to prospective franchisees but does not require registration. A number of states require registration and/or disclosure in connection with franchise offers and sales. In addition, several states have “franchise relationship laws” or “business opportunity laws” that limit the ability of franchisors to terminate franchise agreements or to withhold consent to the renewal or transfer of these agreements. Our or our franchisees’ failure to comply with any of the foregoing laws and regulations may result in fines, penalties, injunctions and/or potential criminal violations. There is also a risk that we or our franchisees could be adversely affected if more restrictive laws, regulations or interpretations are adopted in the future that could make compliance more difficult or expensive. Any failure by us or our franchisees to comply with these laws or regulations, changes to these laws or regulations, or any new laws or regulations may subject us to costs associated with investigation or litigation, make it more difficult for us to operate our business, and have an adverse effect on our reputation and business.

Any of the issues discussed above could harm our business, financial condition and results of operations.

If we do not comply with the rules, terms of service, and policies of MLSs, our access to and use of listings data may be restricted or terminated.

If we do not comply with the rules, terms of service, and policies of MLSs, our access to and use of listings data may be restricted or terminated. We belong to numerous MLSs, and each has adopted its own rules, terms of service, and policies governing, among other things, how MLS data may be used and how listings data must be displayed on our website and mobile application. Complying with the rules of each MLS requires significant investment, including personnel, technology and development resources, and the exercise of considerable judgment. If we are deemed to be noncompliant with an MLS’s rules, we may face disciplinary sanctions in that MLS, which could include monetary fines, restricting or terminating our access to that MLS’s data, or other disciplinary measures. The loss or degradation of this listings data may adversely affect traffic to our website and mobile application, making us less relevant to consumers and restricting our ability to attract customers. It also may reduce agent and customer confidence in our services and harm our business.

Changes to the rules governing MLSs may disrupt the functioning of the residential real estate market and could adversely affect our operations and financial results.

Through our brokerages, we participate in many MLSs and are subject to each MLS’s rules, policies, data licenses, and terms of service. The rules of each MLS to which we belong can vary widely and are complex. Any changes to these rules could disrupt the functioning of the residential real estate market and result in harm to our operations and financial results.

From time to time, certain industry practices, including MLS rules, have come under regulatory scrutiny. For example, in June 2018, the U.S. Department of Justice (“DOJ”) and the FTC held a joint public workshop to explore competition issues in the residential real estate brokerage industry including potential barriers to competition. In the workshop, there were various panels and participants submitted comments that raised a

46

variety of issues, including: whether the current industry practice involving commission sharing by listing brokers was anti-competitive, whether offers of commission sharing-including commission rates-should be public, and whether average broker commission rates were too high. There can be no assurances as to whether DOJ or the FTC will determine that any industry practices or developments have an anti-competitive effect on the industry. Any such determination by DOJ or the FTC could result in industry investigations, legislative or regulatory action or other actions, any of which could have the potential to disrupt our business.

Meaningful changes in industry operations or structure, as a result of governmental pressures, the actions of certain competitors or the introduction or growth of certain competitive models, changes to MLS rules, or otherwise could adversely affect our operations, revenues, earnings and financial results.

Adverse decisions in litigation against companies unrelated to us could impact our business practices and those of our franchisees in a manner that adversely impacts our financial condition and results of operations.

Litigation, claims, and regulatory proceedings against other participants in the residential real estate industry may impact us when the rulings in those cases cover practices common to the broader industry. Examples may include claims associated with RESPA compliance, broker fiduciary duties, and sales agent classification. Similarly, we may be impacted by litigation and other claims against companies in other industries. To the extent plaintiffs are successful in these types of litigation matters, and we or our franchisees cannot distinguish our or their practices (or our industry’s practices), we and our franchisees could face significant liability and could be required to modify certain business relationships, either of which could adversely impact our financial condition and results of operations.

We are an “emerging growth company,” and any decision on our part to comply only with certain reduced reporting and disclosure requirements applicable to emerging growth companies could make our common stock less attractive to investors.

We are an EGC as defined in the Jumpstart Our Business Startups Act enacted in April 2012, and, for as long as we continue to be an EGC, we may choose to take advantage of exemptions from various reporting requirements applicable to other public companies but not to EGCs, including, but not limited to, not being required to have our independent registered public accounting firm audit our internal control over financial reporting under Section 404 of SOX, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. We could be an EGC for up to five years following the completion of this offering, although, if we have more than $1.07 billion in annual revenue, if the market value of our common stock that is held by non-affiliates exceeds $700 million as of June 30 of any year, or we issue more than $1.0 billion of non-convertible debt over a three-year period before the end of that five-year period, we would cease to be an EGC as of the following December 31. We cannot predict if investors will find our common stock less attractive if we choose to rely on these exemptions. If some investors find our common stock less attractive as a result of any choices to reduce future disclosure, there may be a less active trading market for our common stock and our stock price may be more volatile.

We use third-party contractors outside of the United States to supplement our research and development capabilities, which may expose us to risks, including risks inherent in foreign operations.

We use third-party contractors outside of the United States to supplement our technology development capabilities. We currently use third-party contractors located in India and the United Kingdom. Managing operations that are remote from our U.S. headquarters is difficult and we may not be able to manage these third-party contractors successfully. If we fail to maintain productive relationships with these contractors generally, we may be required to develop our solutions in a less efficient and cost-effective manner and our

47

product release schedules may be delayed while we hire software developers or find alternative contract development resources. Additionally, while we take precautions to ensure that software components developed by our third-party contractors are reviewed and that our source code is protected, misconduct by our third-party contractors could result in infringement or misappropriation of our intellectual property. Furthermore, any acts of espionage, malware attacks, theft of confidential information or other privacy, security, or data protection incidents attributed to our third party contractors may compromise our system infrastructure, expose us to litigation and lead to reputational harm that could result in harm to our financial condition and results of operations.

We plan to expand our operations into international markets, which may subject us to risks not generally experienced by our U.S. operations.

Part of our future growth strategy involves the expansion of our operations and establishment of an agent base internationally. We are continuing to adapt and develop strategies to address international markets, but there is no guarantee that such efforts will have the desired effect. For example, we may need to establish relationships with new partners or acquire businesses in order to expand into certain countries, and if we fail to identify, establish, and maintain such relationships or successfully identify and acquire businesses, we may be unable to execute on our expansion plans. In addition, there may be laws and regulations in place that are not generally experienced by our U.S. operations that could hinder or impact our marketing tactics and results. We currently have the ability to operate or franchise in Canada. The risks involved in our global operations and relationships could result in losses against which we are not insured and therefore affect our profitability. These risks include:

• Fluctuations in foreign currency exchange rates;

• Exposure to local economic conditions and local laws and regulations, including those relating to the agents of our franchisees;

• Economic and/or credit conditions abroad;

• Potential adverse changes in the political stability of foreign countries or in their diplomatic relations with the United States;

• Restrictions on the withdrawal of foreign investment and earnings;

• Government policies against businesses owned by foreigners;

• Diminished ability to legally enforce our contractual rights in foreign countries;

• Withholding and other taxes on remittances and other payments by subsidiaries; and

• Changes in tax laws regarding taxation of foreign profits.

Conducting business in foreign countries involves inherent risks, as described above. If we were to experience any of these risks, or any other difficulties related to global operations, our global development efforts and financial growth could be harmed.

As we expand our global operations, we are subject to anti-corruption, anti-bribery, anti-money laundering, trade compliance, economic sanctions and similar laws, and non-compliance with such laws may subject us to criminal or civil liability and harm our business, financial condition and results of operations. We may also be subject to governmental export and import controls that could impair our ability to compete in international markets or subject us to liability if we violate the controls.

As we expand our global operations, we are subject to the U.S. Foreign Corrupt Practices Act of 1977, as amended, U.S. domestic bribery laws, and other anti-corruption and anti-money laundering laws in the

48

countries in which we conduct business. Anti-corruption and anti-bribery laws have been enforced aggressively in recent years and are interpreted broadly to generally prohibit companies, their employees, and their third-party intermediaries from authorizing, offering, or providing, directly or indirectly, improper payments or benefits to recipients in the public or private sector. If we engage in international sales and business with partners and third-party intermediaries to market our products, we may be required to obtain additional permits, licenses, and other regulatory approvals. In addition, we or our third-party intermediaries may have direct or indirect interactions with officials and employees of government agencies or state-owned or affiliated entities. If we engage in international sales and business with the public sector, we can be held liable for the corrupt or other illegal activities of these third-party intermediaries, our employees, agents, representatives, contractors, and partners, even if we do not explicitly authorize such activities.

While we have policies and procedures to address compliance with such laws, there is a risk that our employees and agents will take actions in violation of our policies and applicable law, for which we may be ultimately held responsible. If we further expand internationally, our risks under these laws may increase. Any such noncompliance with anti-corruption, anti-bribery, or anti-money laundering laws could subject us to whistleblower complaints, investigations, sanctions, settlements, prosecution, enforcement actions, fines, damages, other civil or criminal penalties or injunctions, and adversely affect our business, financial condition, and results of operations.

Additionally, if we expand our brokerage business in international markets, our platform may become subject to U.S. export controls, including the U.S. Export Administration Regulations. Obtaining the necessary export license or other authorization for a particular sale may be time-consuming and may result in the delay or loss of sales opportunities. Furthermore, our activities are subject to applicable economic and trade sanctions laws and regulations, such as those administered and enforced by the U.S. Department of Treasury’s Office of Foreign Assets Control, the U.S. Department of State, the United Nations Security Council and other relevant sanctions authorities. Our expanding global operations expose us to the risk of violating or being accused of violating economic and trade sanctions laws and regulations. Our failure to comply with these laws and regulations could expose us to reputational harm as well as significant penalties, including criminal fines, imprisonment, civil fines, disgorgement of profits, injunctions and debarment from government contracts, and other measures. Investigations of alleged violations can be expensive and disruptive. Despite our compliance efforts and activities, we cannot assure compliance by our employees or representatives for which we may be held responsible, and any such violation could adversely affect our reputation, business, financial condition and results of operations.

Also, various countries, in addition to the United States, regulate the import and export of certain encryption and other technology, including import and export licensing requirements, and have enacted laws that could limit our ability to operate our platform in those countries. Changes in our platform or future changes in export and import regulations may impede the introduction of our platform in international markets, prevent our agents with international clients from using our platform globally or, in some cases, prevent the export or import of our platform to certain countries, governments, or persons altogether, and may adversely affect our business, financial condition, and results of operations.

Our business is subject to potential tax liabilities.

We are subject to income tax, indirect tax or other tax claims by tax agencies in jurisdictions in which we conduct business. Significant judgment is required in determining our provision for income taxes. Tax laws are dynamic and subject to change as new laws are passed and new interpretations of the law are issued or applied. Any changes to tax laws could increase our tax obligations and effective tax rate.

In the ordinary course of our business, there are many transactions and calculations where the ultimate income tax, indirect tax, or other tax determination is uncertain. Although we believe our tax estimates are reasonable,

49

we cannot assure that the final determination of any tax audits and litigation will not be different from that which is reflected in historical tax provisions and accruals. Should additional taxes be assessed as a result of an audit, assessment or litigation, there could be an adverse impact on our cash, tax provisions and net income in the period or periods for which that determination is made.

Risks Related to Intellectual Property

We rely on third-party licensed technology and open-source software for certain aspects of our technology, and the inability to maintain these licenses, or the occurrence of errors in the software we use, could result in increased costs or reduced service levels.

We employ certain third-party software obtained under licenses from other companies in our technology and we anticipate that we will continue to rely on such third-party software and tools in the future. Although we believe that there are commercially reasonable alternatives to the third-party software we currently license, this may not always be the case, or it may be difficult or costly to replace. In addition, any failure to maintain these licenses could result in increased costs or reduced service levels. For example, we use third-party software to integrate our technologies and services for our mortgage and title services. Our reliance on this third-party software may become costly if the licensor increases the price for the license or changes the terms of use, and we cannot find commercially reasonable alternatives. Even if we were to find an alternative, integration of our technology with new third-party software may require substantial investment of our time and resources.

Our technology also incorporates software covered by open-source licenses. The terms of various open-source licenses have not been interpreted by U.S. courts, and if they were interpreted, such licenses could be construed in a manner that imposes unanticipated restrictions on our technology. If portions of our proprietary software are determined to be subject to an open-source license, we could be required to publicly release the affected portions of our source code, re-engineer all or a portion of our technologies, or otherwise be limited in our use of such software, each of which could reduce or eliminate the value of our technologies and harm our business. In addition to risks related to license requirements, use of open-source software can lead to greater risks than use of third-party commercial software, as open source licensors generally do not provide warranties or controls on the origin of the software. Many of the risks associated with use of open-source software cannot be eliminated and, if such risks materialize, could harm our business.

Moreover, we cannot ensure our processes for controlling our use of open-source software will not be effective. If we do not comply with the terms of an open source software license, we could be required to seek licenses from third parties to continue offering our services on terms that are not economically feasible, to re-engineer our technology to remove or replace the open source software, to discontinue the use of certain technology if re-engineering could not be accomplished on a timely basis, to pay monetary damages, to make generally available the source code for our proprietary technology, or to waive certain intellectual property rights.

Any undetected errors or defects in the third-party software we use could prevent the deployment or impair the functionality of our technology, delay new service offerings, or result in a failure of our website or mobile application, any of which could harm our business, financial condition and results of operations.

Failure to protect intellectual property rights could adversely affect our business.

Failure to protect intellectual property rights could adversely affect our business. Our intellectual property rights, including existing and future trademarks, trade secrets and copyrights, and technology created by our company are important assets of the business. We have taken measures to protect our intellectual property, but these measures might not be sufficient or effective. We may bring lawsuits to protect against the potential

50

infringement of our intellectual property rights and other companies, including our competitors, could make claims against us alleging our infringement of their intellectual property rights. There can be no assurance that we would prevail in such lawsuits. Any significant impairment of our intellectual property rights could harm our business.

If we are unable to protect the confidentiality of our proprietary information and know-how, the value of our products could be adversely affected.

We are heavily dependent on the maintenance and protection of our intellectual property and, with respect to trade secrets and confidential proprietary information, rely largely on confidentiality procedures and employee nondisclosure agreements to protect our intellectual property. However, these agreements may be inadequate to protect our proprietary information and intellectual property rights. Moreover, those agreements may be breached, and we may not have adequate remedies for any such breach. Our software is not patented and existing copyright laws offer only limited practical protection. As such, we rely on our unpatented proprietary technology, trade secrets, processes and know-how to create our unique platform which provides us with our competitive edge. Although we use reasonable efforts to protect this proprietary information and technology, we cannot guarantee that we have entered into non-disclosure agreements with each party who has developed intellectual property on our behalf or each party that has or may have had access to our confidential information, know-how or trade secrets. Our employees, consultants and other parties may unintentionally or willfully disclose our information or technology to competitors and there can be no assurance that the legal protections and precautions taken by us will be adequate to prevent misappropriation of our technology or that competitors will not independently develop technologies equivalent or superior to ours. Engaging in litigation involving proprietary information or technology is difficult, expensive, distracting to management and time-consuming, and the outcome is unpredictable and varied depending on the jurisdiction.

Moreover, courts inside and outside the United States, in countries in which we operate or intend to operate, are sometimes less willing to protect trade secrets, know-how and other proprietary information. We generally seek to protect this information by confidentiality, non-disclosure and invention assignment agreements. In addition, our trade secrets may be disclosed to or otherwise become known or substantially similar information or inventions may be independently developed by competitors, in which case, we may have no right to prevent such third parties, or those to who they communicate such trade secrets and other confidential proprietary information, from using such trade secrets and information to compete with us, any of which could have an adverse effect on our business, results of operations and financial condition. To the extent that our employees, consultants or contractors use intellectual property owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions. Confidentiality agreements with employees and others may not adequately prevent disclosure, misappropriation or reverse engineering of trade secrets and proprietary information. Accordingly, if, for any of the above reasons, our intellectual property is disclosed or misappropriated, it would harm our ability to protect our confidential intellectual property rights and adversely affect our business, results of operations and financial condition.

Our products and services may infringe the intellectual property rights of others, which may cause us to incur unexpected costs or prevent us from providing our products and services and could adversely affect our business.

We cannot guarantee that our internally developed or acquired systems, technologies and content do not and will not infringe the intellectual property rights of others. In addition, we use content, software and other intellectual property rights from third parties and may be subject to claims of infringement or misappropriation if we have failed to obtain appropriate intellectual property licenses from such parties, or such parties do not

51

possess the necessary intellectual property rights to the products or services they license to our business. We may in the future be subject to claims that we have infringed the copyrights, trademarks, or other intellectual property rights of a third party. Any intellectual property-related infringement or misappropriation claims, whether or not meritorious, could result in costly litigation and divert management resources and attention. For example, responding to any infringement or other enforcement claim, regardless of its validity, could harm our business, results of operations, and financial condition, by, among other things:

• Resulting in time-consuming and costly litigation;

• Diverting management’s time and attention from developing our business;

• Requiring us to pay monetary damages or enter into royalty and licensing agreements that we would not normally find acceptable;

• Requiring us to redesign certain components of our software using alternative non-infringing source technology or practices, which could require significant effort and expense;

• Disrupting our customer relationships if we are forced to cease offering certain services;

• Requiring us to waive certain intellectual property rights associated with our release of open source software, or contributions to third-party open source projects;

• Requiring us to disclose our software source code; and

• Requiring us to satisfy indemnification obligations.

Accordingly, should we be found liable for infringement or misappropriation, we may be required to enter into licensing agreements, if available on acceptable terms or at all, pay substantial damages, limit or curtail our offerings and technologies or take other action, which could harm our business and results of operations. Moreover, we may need to redesign some of our systems and technologies to avoid future infringement liability. Any of the foregoing could prevent us from competing effectively and could expose our business to significant liabilities, thereby adversely affecting our business.

Risks Related to Indebtedness and Liquidity

Certain provisions of our loan agreements could adversely affect our ability to fund our operations, invest in our business or pursue growth opportunities, react to changes in the economy or our industry, or incur additional borrowings.

Certain provisions of New Facility entered into on September 27, 2021, including subsequent modifications, could adversely affect our ability to fund our operations, invest in our business or pursue growth opportunities, react to changes in the economy or our industry, or incur additional borrowings. Our leverage could have important consequences, including the following:

• It exposes us to the risk of increased interest rates because a portion of our borrowings are at variable rates of interest;

• It may limit our ability to adjust to changing market conditions and place us at a competitive disadvantage compared to our competitors that have no or less debt;

• It may limit our ability to attract acquisition candidates or to complete future acquisitions;

• It may cause us to be more vulnerable to periods of negative or slow growth in the general economy or in our business, or may cause us to be unable to carry out capital spending that is important to our growth; and

52

• It may result in substantial and immediate payments if an event of default were to occur.

The New Facility contains restrictive covenants, including a requirement that we maintain a Total Leverage Ratio, as that term is defined in the credit agreement governing the New Facility, of 3.00 to 1.00. Any failure to meet our obligations under our debt interests may harm our ability to fund our operations.

If we are unable to comply with the New Facility because of the occurrence of certain “events of default” such as failure to comply with the leverage ratio covenant described above, nonpayment of principal or interest, a change of control, material misrepresentations, insolvency, bankruptcy, certain material judgments, or others, the lenders may not be required to lend any additional amounts to us; could elect to declare all borrowings outstanding, together with accrued and unpaid interest and fees, to be immediately due and payable; or could require us to apply our available cash to repay these borrowings. If the lenders under our New Facility accelerate the repayment of borrowings, we may not have sufficient assets to repay the New Facility or be able to borrow sufficient funds to refinance such indebtedness. Occurrence of any of the foregoing may harm our ability to operate our business.

Variable rate indebtedness subjects us to interest rate risk, including risks of changes to LIBOR, and could cause our debt service obligations to increase significantly.

Variable rate indebtedness subjects us to interest rate risk, including risks of changes to the London Inter-Bank Offer Rate (“LIBOR”), and could cause our debt service obligations to increase significantly. At September 30, 2021, $6.5 million of our borrowings under our New Facility were at variable rates of interest thereby exposing us to interest rate risk. If interest rates continue to increase, our debt service obligations on the variable rate indebtedness would increase even if the amount borrowed remained the same, and our net income would decrease. Our primary interest rate exposure is interest rate fluctuations, specifically with respect to LIBOR, due to its impact on our variable rate borrowings under our New Facility.

LIBOR is the subject of national, international and other regulatory guidance and proposals for reform. At this time, it is not possible to predict the effect of any changes to LIBOR, any phase out of LIBOR or any establishment of alternative benchmark rates. The U.S. Federal Reserve, based on the recommendations of the New York Federal Reserve’s Alternative Reference Rate Committee (comprised of major derivative market participants and their regulators), began publishing in April 2018 a Secured Overnight Financing Rate (“SOFR”), which is intended to replace U.S. dollar LIBOR in 2021. SOFR is a broad measure of the cost of borrowing cash overnight collateralized by U.S. Treasury securities. Markets are developing in response to these new rates. Any new benchmark rate will likely not replicate LIBOR exactly and if future rates based upon a successor rate (or a new method of calculating LIBOR) are higher than LIBOR rates as currently determined, it could result in an increase in the cost of our variable rate indebtedness and may harm our financial condition and results of operations.

If Minute Mortgage is unable to obtain sufficient financing through warehouse credit facilities to fund its origination of mortgage loans, then we may be unable to grow our mortgage origination business.

If Minute Mortgage is unable to obtain sufficient financing through warehouse credit facilities to fund its origination of mortgage loans, then we may be unable to grow our mortgage origination business. Minute Mortgage relies on borrowings from its warehouse credit facilities to fund substantially all of the mortgage loans that it originates. To grow its business, Minute Mortgage depends, in part, on having sufficient borrowing capacity under its current facilities or obtaining additional borrowing capacity under new facilities. If it were unable to receive the necessary capacity, or receive such capacity on acceptable terms, and did not have cash on hand available, then Minute Mortgage may be unable to maintain or increase the amount of mortgage loans that it originates, which will adversely affect its growth.

53

Risks Related to the Offering and Ownership of our Common Stock

Insiders will exercise significant control over our company and all corporate matters.

Our Chief Executive Officer and his affiliated entities owned 100% of our outstanding capital stock as of September 30, 2021. Upon the completion of this offering, including the sale of our common stock by our Chief Executive Officer and his affiliated entities in this offering, it is expected that he and his affiliated entities will beneficially own                 % of our outstanding capital stock. As a result, this stockholder will be able to exercise significant influence over all matters submitted to our stockholders for approval, including the election of directors and approval of significant corporate transactions, such as (i) making changes to our certificate of incorporation whether to issue additional common stock, including to himself, (ii) employment decisions, including compensation arrangements, and (iii) whether to enter into material transactions with related parties. This concentration of ownership may also have the effect of delaying or preventing a third party from acquiring control of our company which could adversely affect the price of our common stock.

There has been no prior public market for our common stock, the stock price of our common stock may be volatile or may decline regardless of our performance, and you may not be able to resell your shares at or above the initial public offering price.

There has been no public market for our common stock prior to this offering. The initial public offering price for our common stock will be determined through negotiations among the underwriters, the selling stockholder, and us and may vary from the market price of our common stock following this offering. The market prices of the securities of newly public companies have historically been highly volatile. The market price of our common stock may fluctuate significantly in response to numerous factors, many of which are beyond our control, including:

• Overall performance of the equity markets and the performance of technology or real estate companies in particular;

• Variations in our results of operations, cash flows, and other financial metrics and non-financial metrics, and how those results compare to analyst expectations;

• Changes in the financial projections we may provide to the public or our failure to meet those projections;

• Failure of securities analysts to initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors;

• Recruitment or departure of key personnel;

• Variations in general market, financial market, economic and political conditions in the United States;

• Changes in mortgage interest rates;

• Variations in the housing market, including seasonal trends and fluctuations;

• Negative publicity related to the real or perceived quality of our website and mobile application, as well as the failure to timely launch new products and services that gain market acceptance;

• Rumors and market speculation involving us or other companies in our industry;

• Announcements by us or our competitors of significant technical innovations, new business models, or changes in pricing;

• Acquisitions, strategic partnerships, joint ventures, or capital commitments;

54

• New laws, regulations, or executive orders, or new interpretations of existing laws or regulations applicable to our business;

• Changes in MLS or other broker rules and regulations, or new interpretations of rules and regulations applicable to our business;

• Lawsuits threatened or filed against us, or unfavorable determinations or settlements in any such suits;

• Developments or disputes concerning our intellectual property or our technology, or third-party proprietary rights;

• Changes in accounting standards, policies, guidelines, interpretations or principles;

• Other events or factors including those resulting from war, incidents of terrorism, or responses to these events;

• The expiration of contractual lock-up or market standoff agreements; and

• Sales of shares of our common stock by us or our stockholders.

In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. Stock prices of many companies, and technology companies in particular, have fluctuated in a manner unrelated or disproportionate to the operating performance of those companies. In the past, stockholders have instituted securities class action litigation following periods of market volatility. If we were to become involved in securities litigation, it could subject us to substantial costs, divert resources and the attention of management from our business, and harm our business.

Our amended and restated bylaws provide that, unless we consent in writing to the selection of an alternative forum, the sole and exclusive forum for (a) any derivative action or proceeding brought on our behalf, (b) any action asserting a claim of breach of a fiduciary duty owed by any of our current or former directors, stockholders, officers, or other employees to us or our stockholders, (c) any action or proceeding asserting a claim arising pursuant to, or seeking to enforce any right, obligation or remedy under, any provision of the Delaware General Corporation Law (“DGCL”), our amended and restated certificate of incorporation, or our amended and restated bylaws, (d) any action or proceeding as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware, or (e) any action or proceeding asserting a claim that is governed by the internal affairs doctrine shall be the Court of Chancery of the State of Delaware (or, if the Court of Chancery does not have jurisdiction, another state court in Delaware or, if no state court in Delaware has jurisdiction, the federal district court for the District of Delaware) and any appellate court therefrom, in all cases subject to the court having jurisdiction over the claims at issue and the indispensable parties; provided that the exclusive forum provision will not apply to suits brought to enforce any liability or duty created by the Exchange Act.

Section 22 of the Securities Act of 1933, as amended (the “Securities Act”), creates concurrent jurisdiction for federal and state courts over all such Securities Act actions. Accordingly, both state and federal courts have jurisdiction to entertain such claims. To prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, our amended and restated

55

bylaws also provide that the federal district courts of the United States of America will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act.

Any person or entity purchasing or otherwise acquiring or holding or owning (or continuing to hold or own) any interest in any of our securities shall be deemed to have notice of and consented to the foregoing bylaw provisions. Although we believe these exclusive forum provisions benefit us by providing increased consistency in the application of Delaware law and federal securities laws in the types of lawsuits to which each applies, the exclusive forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum of its choosing for disputes with us or any of our directors, officers, stockholders, or other employees, which may discourage lawsuits with respect to such claims against us and our current and former directors, officers, stockholders, or other employees. Our stockholders will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder as a result of our exclusive forum provisions. Further, in the event a court finds either exclusive forum provision contained in our amended and restated bylaws to be unenforceable or inapplicable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our results of operations.

Delaware law and provisions in our amended and restated certificate of incorporation and amended and restated bylaws could make a merger, tender offer, or proxy contest difficult, thereby depressing the market price of our common stock.

Our status as a Delaware corporation and the anti-takeover provisions of the DGCL may discourage, delay, or prevent a change in control by prohibiting us from engaging in a business combination with an interested stockholder for a period of three years after the date of the transaction in which the person became an interested stockholder, even if a change of control would be beneficial to our existing stockholders. In addition, our amended and restated certificate of incorporation and amended and restated bylaws will contain provisions that may make the acquisition of our company more difficult, including the following:

• Any amendments to our amended and restated certificate of incorporation will require the approval of at least a majority of the voting power of the outstanding shares of our common stock;

• Our amended and restated bylaws will provide that approval of the holders of at least a majority of the voting power of the outstanding shares of our common stock is required for stockholders to amend or adopt any provision of our bylaws;

• Our board of directors is classified into three classes of directors with staggered three-year terms and directors are only able to be removed from office for cause;

• Our amended and restated certificate of incorporation will not provide for cumulative voting;

• Vacancies on our board of directors will be able to be filled only by our board of directors and not by stockholders, except as set forth in the section titled “Description of Capital Stock—Anti-Takeover Provisions —Amended and Restated Certificate of Incorporation and Amended and Restated Bylaw Provisions—Board of Directors Vacancies”;

• A special meeting of our stockholders may only be called by the chairperson of our board of directors, our Chief Executive Officer, our President, or a majority of our board of directors;

• Certain litigation against us can only be brought in Delaware;

• Our amended and restated certificate of incorporation will authorize undesignated preferred stock, the terms of which may be established and shares of which may be issued without further action by our stockholders; and

• Advance notice procedures apply for stockholders to nominate candidates for election as directors or to bring matters before an annual meeting of stockholders.

56

These provisions, alone or together, could discourage, delay, or prevent a transaction involving a change in control of our company. These provisions could also discourage proxy contests and make it more difficult for stockholders to elect directors of their choosing and to cause us to take other corporate actions they desire, any of which, under certain circumstances, could limit the opportunity for our stockholders to receive a premium for their shares of our common stock and could also affect the price that some investors are willing to pay for our common stock.

Because we do not intend to pay any cash dividends on our shares of common stock in the near future, our stockholders will not be able to receive a return on their shares unless they sell them.

We do not intend to pay cash dividends on our shares of common stock in the near future, and our stockholders will not be able to receive a return on their shares unless they sell them. The declaration, payment and amount of any future dividends will be made at the discretion of our board of directors, and will depend upon, among other things, the results of operations, cash flows and financial condition, operating and capital requirements, and other factors as our board of directors considers relevant. There is no assurance that future dividends will be paid, and if dividends are paid, there is no assurance with respect to the amount of any such dividend. Unless we pay dividends, our stockholders will not be able to receive a return on their shares unless they sell them.

You will experience immediate and substantial dilution.

The initial public offering price will be substantially higher than the net tangible book value of each outstanding share of common stock immediately after this offering. If you purchase common stock in this offering, you will suffer immediate and substantial dilution. At an assumed initial public offering price of $                with net proceeds to us of $                million, after deducting estimated underwriting discounts and commissions and estimated offering expenses, investors who purchase shares in this offering will have contributed                 % of the total amount of funding we have received to date, but will only hold                 % of the total voting rights. The dilution will be $                per share in the net tangible book value of the common stock from the assumed initial public offering price. In addition, if outstanding options or warrants to purchase shares of our common stock are exercised, there could be further dilution. For more information refer to the section titled “Dilution.”

We have broad discretion in the use of the net proceeds from this offering and may not use them effectively.

Our management will have broad discretion in the application of the net proceeds from this offering and could spend the proceeds in ways that do not improve our results of operations or enhance the value of our common stock. The failure by our management to apply these funds effectively could result in financial losses that could have an adverse effect on our business and cause the market price of our shares of common stock to decline. Pending their use, we may invest the net proceeds from this offering in a manner that does not produce income or that loses value. If we do not invest the net proceeds from this offering in ways that enhance stockholder value, we may fail to achieve expected financial results, which could cause the price of our shares of common stock to decline.

Future sales or issuance of shares of our common stock by existing stockholders could depress the market price of our common stock.

Upon completion of this offering, there will be                shares of our common stock outstanding (or                shares, if the underwriters exercise in full their option to purchase additional shares). The                shares being sold in this offering will be freely tradable immediately after this offering (except for shares purchased by affiliates) and of the                shares outstanding as of                 (assuming no exercise of the underwriters’ option to purchase additional shares),                shares are freely tradable shares under Rule 144 that are not subject to a lock-up,                shares may be sold upon expiration of lock-up agreements 180

57

days after the date of this offering (subject in some cases to volume limitations). A large portion of these shares are held by a small number of persons. Sales by these stockholders or option holders of a substantial number of shares after this offering could significantly reduce the market price of our common stock. See the section titled “Shares Eligible for Future Sale” for a more detailed description of sales that may occur in the future.

If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, the trading price of our common stock and trading volume could decline.

The trading market for our shares of our common stock will depend in part on the research and reports that securities or industry analysts publish about us or our business, and, if analysts do not publish research or publish inaccurate or unfavorable research, the trading price of our common stock may decline. Securities and industry analysts do not currently, and may never, publish research on our shares of common stock. If no securities or industry analysts commence coverage of our company, the trading price for our shares of our common stock would likely be negatively impacted. In the event securities or industry analysts initiate coverage, if one or more of the analysts who cover us downgrade our securities or publish inaccurate or unfavorable research about our business, the price of our shares of common stock would likely decline. If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, demand for our securities could decrease, which might cause the trading price of our shares of common stock and trading volume to decline.

Our common stock could be subject to extreme volatility.

The trading price of our common stock may be subject to extreme volatility and may be affected by a number of factors, including events described in the risk factors set forth in this prospectus, as well as our operating results, financial condition and other events or factors. In addition to the uncertainties relating to future operating performance and the profitability of operations, factors such as variations in interim financial results, illiquidity of our common stock, or various, as yet unpredictable, factors, many of which are beyond our control, may have a negative effect on the market price of our common stock. In recent years, broad stock market indices, in general, and smaller capitalization companies, in particular, have experienced substantial price fluctuations. In a volatile market, we may experience wide fluctuations in the market price of our common stock and wide bid-ask spreads. These fluctuations may have a negative effect on the market price of our common stock. In addition, the securities market has, from time to time, experienced significant price and volume fluctuations that are not related to the operating performance of particular companies. These market fluctuations may also adversely affect the market price of our common stock.

General Risk Factors

The requirements of being a public company may strain our resources, divert management’s attention, and affect our ability to attract and retain qualified board of director members.

As a public company, we will be subject to the reporting requirements of the Exchange Act, SOX, and other applicable securities rules and regulations. Compliance with these rules and regulations, even as an EGC, will increase our legal and financial compliance costs, make some activities more difficult, time-consuming, or costly, and increase demand on our systems and resources. The Exchange Act requires, among other things, that we file annual, quarterly, and current reports with respect to our business and operating results. SOX requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. In order to maintain and, if required, improve our disclosure controls and procedures and internal control over financial reporting to meet this standard, significant resources and management oversight may be required. As a result, management’s attention may be diverted from other business concerns, which could harm our business and operating results. Although we have

58

already hired additional employees to comply with these requirements, we may need to hire more resources in the future, which will increase our costs and expenses.

In addition, changing laws, regulations, and standards relating to corporate governance and public disclosure create uncertainty for public companies, increasing legal and financial compliance costs and making some activities more time consuming. These laws, regulations, and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We intend to invest resources to comply with evolving laws, regulations, and standards, and this investment may result in increased general and administrative expenses and a diversion of management’s time and attention from revenue-generating activities to compliance activities. If our efforts to comply with new laws, regulations, and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to practice, regulatory authorities may initiate legal proceedings against us, and our business may be harmed.

We also expect that being a public company combined with these new rules and regulations will make it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These factors also could make it more difficult for us to attract and retain qualified management and members of our board of directors, particularly to serve on our audit committee and compensation and governance committee.

As a result of disclosure of information in this prospectus and in filings required of a public company, our business and financial condition will become more visible, which we believe may result in threatened or actual litigation, including by competitors and other third parties. If such claims are successful, our business and operating results could be harmed. Even if the claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve them, could divert the resources of our management and harm our business, operating results, and financial condition.

Our management team has limited experience managing a public company.

Most members of our management team have limited experience managing a publicly traded company, interacting with public company investors, and complying with the increasingly complex laws pertaining to public companies. Our management team may not successfully or efficiently manage our transition to being a public company that is subject to significant regulatory oversight and reporting obligations under the federal securities laws and the continuous scrutiny of securities analysts and investors. These new obligations and constituents will require significant attention from our senior management and could divert their attention away from the day-to-day management of our business, which could harm our business, results of operations, and financial condition.

Investors’ expectations of our performance relating to environmental, social and governance factors may impose additional costs and expose us to new risks.

There is an increasing focus from certain investors, employees and other stakeholders concerning corporate responsibility, specifically related to environmental, social and governance factors. Some investors may use these factors to guide their investment strategies and, in some cases, may choose not to invest in us if they believe our policies relating to corporate responsibility are inadequate. Third-party providers of corporate responsibility ratings and reports on companies have increased to meet growing investor demand for measurement of corporate responsibility performance. The criteria by which companies’ corporate responsibility practices are assessed may change, which could result in greater expectations of us and cause us to undertake costly initiatives to satisfy such new criteria. If we elect not to or are unable to satisfy such new

59

criteria, investors may conclude that our policies with respect to corporate responsibility are inadequate. We may face reputational damage in the event that our corporate responsibility procedures or standards do not meet the standards set by various constituencies.

Furthermore, if our competitors’ corporate responsibility performance is perceived to be greater than ours, potential or current investors may elect to invest with our competitors instead. In addition, in the event that we communicate certain initiatives and goals regarding environmental, social and governance matters, we could fail, or be perceived to fail, in our achievement of such initiatives or goals, or we could be criticized for the scope of such initiatives or goals. If we fail to satisfy the expectations of investors, employees and other stakeholders or our initiatives are not executed as planned, our reputation and financial results could be adversely affected.

Internet law is evolving, and unfavorable changes to, or failure by us to comply with, these laws and regulations could adversely affect our business, financial condition and results of operations.

We are subject to regulations and laws specifically governing the Internet. The scope and interpretation of the laws that are or may be applicable to our business are often uncertain, subject to change and may be conflicting. If we incur costs or liability as a result of unfavorable changes to these regulations or laws or our failure to comply therewith, the business, financial condition and results of operations of our business could be adversely affected. Any costs incurred to prevent or mitigate this potential liability could also harm our business, financial condition and results of operations.

Changes in accounting standards, subjective assumptions and estimates used by management related to complex accounting matters could have an adverse effect on results of operations.

GAAP in the United States and related accounting pronouncements, implementation guidance and interpretations with regard to a wide range of matters, such as revenue recognition, lease accounting, stock-based compensation, asset impairments, valuation reserves, income taxes and fair value accounting, are highly complex and involve many subjective assumptions, estimates and judgments made by management. Changes in these rules or their interpretations or changes in underlying assumptions, estimates or judgments made by management could change our reported results.

The occurrence of natural or man-made disasters could adversely affect our operations, results of operations and financial condition.

The occurrence of natural disasters, including hurricanes, floods, earthquakes, tsunamis, tornadoes, fires, explosions, pandemic disease, such as the current COVID-19 pandemic, and man-made disasters, including acts of terrorism and military actions, could adversely affect our operations, results of operations or financial condition, even if home values and buyers’ access to financing has not been affected.

60

Special Note Regarding Forward-Looking Statements

This prospectus contains forward-looking statements within the meaning of the federal securities laws, which statements involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements contained in this prospectus include statements about:

• Our future financial performance, including our expectations regarding our revenue, rate of growth, operating expenses including changes in sales and marketing, research and development, and general and administrative expenses (including any components of the foregoing) and our ability to achieve and sustain future profitability;

• Any changes in macroeconomic conditions and in U.S. residential real estate market conditions, including changes in prevailing interest rates or monetary policies;

• Our business plan and our ability to effectively manage our expenses or grow our revenue;

• Anticipated trends, growth rates, and challenges in our business and in the markets in which we operate;

• Our market opportunity;

• Our ability to expand into new domestic and international markets;

• Our ability to successfully develop and market our adjacent services;

• Our ability to attract and retain agents and expand their businesses;

• Beliefs and objectives for future operations;

• The timing and market acceptance of our products and services for HomeSmart agents and clients, including new products and services offered by us or our competitors;

• The effects of seasonal and cyclical trends on our results of operations;

• Our ability to maintain, protect, and enhance our intellectual property;

• The effects of increased competition in our markets and our ability to compete effectively;

• Our ability to stay in compliance with laws and regulations that currently apply or become applicable to our business both in the United States and, if and as applicable, internationally;

• Economic and industry trends, growth forecasts or trend analysis; and

• The effects of the ongoing COVID-19 coronavirus pandemic in the markets in which we operate.

We caution you that the foregoing list may not contain all of the forward-looking statements made in this prospectus.

You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this prospectus primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations and prospects. The outcome of the events described in these forward-looking statements is subject

61

to risks, uncertainties and other factors, including those described in the section titled “Risk Factors” and elsewhere in this prospectus. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this prospectus. We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.

Neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. Moreover, the forward-looking statements made in this prospectus relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this prospectus to reflect events or circumstances after the date of this prospectus or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this prospectus, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

62

Industry, Market and Other Data

Unless otherwise indicated, estimates and information contained in this prospectus concerning our industry and the market in which we operate, including our general expectations, market position, market opportunity and market size, are based on industry publications and reports generated by third-party providers, other publicly available studies and our internal sources and estimates. This information involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. Although we are responsible for all of the disclosure contained in this prospectus and we believe the information from the industry publications and other third-party sources included in this prospectus is reliable, we have not independently verified the accuracy or completeness of the data contained in such sources. The content of, or accessibility through, the below sources and websites, except to the extent specifically set forth in this prospectus, does not constitute a portion of this prospectus and is not incorporated herein and any websites are an inactive textual reference only.

The sources of certain statistical data, estimates, market and industry data and forecasts contained in this prospectus include:

• National Association of REALTORS, 2020 Profile of Home Buyers and Sellers—November 2020;

• National Association of REALTORS, Historic Membership Report—June 2021;

• National Association of REALTORS, 2020 Member Profile—July 2020;

• RISMedia, 2021 Power Broker Report—April 2021;

• RealTrends, The RealTrends Five Hundred 2020—March 2021;

• RealTrends, October 2020 Newsletter—October 2020;

• Bankrate, Real Estate Commissions Fall to New Lows as Homes Fly Off the Market—March 2021;

• Salesforce, State of the Connected Customer—October 2020;

• Phoenix Business Journal, The Top 5 Residential Real Estate Brokerages in Phoenix—July 2020;

• IBISWorld, Title Insurance—February 2020;

• IBISWorld, Real Estate Sales & Brokerage in the US—April 2021;

• Mortgage Bankers Association, Forecast: Purchase Originations to Increase 8.5% to Record $1.54 Trillion in 2021—October 2021; and

• LendingTree, U.S. Mortgage Market Statistics: 2020—February 2021.

63

Use of Proceeds

We estimate that the net proceeds to us from the sale of shares of our common stock in this offering will be approximately $                million, based upon the assumed initial public offering price of $                 per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. If the underwriters’ option to purchase additional shares of our common stock from us is exercised in full, we estimate that the net proceeds to us would be approximately $                million, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. We will not receive any proceeds from the sale of common stock by the selling stockholder.

Each $1.00 increase or decrease in the assumed initial public offering price of $                 per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, would increase or decrease the net proceeds that we receive from this offering by approximately $                million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions payable by us. Similarly, each increase or decrease of 1.0 million in the number of shares of our common stock offered by us would increase or decrease the net proceeds that we receive from this offering by approximately $                million, assuming the assumed initial public offering price remains the same and after deducting the estimated underwriting discounts and commissions payable by us.

The principal purposes of this offering are to increase our capitalization and financial flexibility, create a public market for our common stock, facilitate an orderly distribution of shares for the selling stockholder, and enable access to the public equity markets for us and our stockholders.

We intend to use the net proceeds we receive from this offering for general corporate purposes, including working capital, operating expenses and capital expenditures. Additionally, we may use a portion of the net proceeds we receive from this offering to acquire or invest in businesses, products, services or technologies. However, we do not have agreements or commitments for any material acquisitions or investments at this time.

We cannot further specify with certainty the particular uses of the net proceeds that we will receive from this offering. Accordingly, we will have broad discretion in using these proceeds. Pending the use of proceeds from this offering as described above, we may invest the net proceeds that we receive in this offering in short-term, investment grade, interest-bearing instruments.

64

Dividend Policy

We currently intend to retain any future earnings and do not expect to pay any dividends in the foreseeable future. Any future determination to declare cash dividends will be made at the discretion of our board of directors, subject to applicable laws, and will depend on a number of factors, including our financial condition, results of operations, capital requirements, contractual restrictions, general business conditions and other factors that our board of directors may deem relevant. In connection with the Corporate Reorganization, we issued two notes payable with initial principal balances of $7.0 million and $3.0 million to Matthew Widdows that were treated as dividends to Mr. Widdows and recorded as a net reduction in retained earnings. For more information, see the sections titled “Unaudited Pro Forma Combined Financial Information—Description of the Transaction and Financing” and “Certain Relationships and Related Party Transactions—Notes Receivable and Notes Payable.”

65

Capitalization

The following table sets forth cash and cash equivalents, as well as our capitalization, as of September 30, 2021 as follows:

• On an actual basis; and

• On a pro forma basis, giving effect to (i) the filing and effectiveness of our amended and restated certificate of incorporation in Delaware that will become effective immediately prior to the completion of this offering and (ii) the sale and issuance by us of                 shares of our common stock in this offering, based upon the assumed initial public offering price of $                 per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

You should read this table together with our consolidated financial statements and related notes, and the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” that are included elsewhere in this prospectus.

	As of September 30, 2021
	Actual			Pro forma
	(in thousands, except for share and per share data)
Cash and cash equivalents	$	9,214		$
Long-term debt	$	11,534		$
Stockholders’ equity (deficit):
Preferred stock, par value $0.01 per share; no shares authorized, issued and outstanding, actual;                 shares authorized, no shares issued and outstanding, pro forma.
Common stock, par value $0.01 per share: 100,000,000 shares authorized, 54,478,907 shares issued and outstanding, actual;                 shares authorized,                 shares issued and outstanding, pro forma	$	545
Additional paid-in capital	$	17,462
Retained earnings	($	11,754	)
Total stockholders’ equity (deficit)	$	6,253
Total capitalization	$	17,787		$

The pro forma column in the table above is based on 54,478,907 shares of our common stock outstanding as of September 30, 2021, and excludes the following:

• 1,664,270 shares of common stock subject to RSUs, outstanding as of September 30, 2021;

• 187,655 shares of common stock subject to RSUs granted after September 30, 2021;

• 253,080 shares of common stock subject to SARs outstanding as of September 30, 2021 at a weighted average exercise price of $12.04 per share, which right we can elect to satisfy through the issuance of shares or by the payment of a cash settlement equal to the difference between the fair market value of our common stock on the date of exercise and the exercise price, and which our board of directors currently intends to satisfy through the issuance of shares;

66

• 263,630 shares of common stock subject to SARs granted after September 30, 2021 at a weighted average exercise price of $12.54 per share, which right we can elect to satisfy through the issuance of shares or by the payment of a cash settlement equal to the difference between the fair market value of our common stock on the date of exercise and the exercise price, and which our board of directors currently intends to satisfy through the issuance of shares;

•              shares of our common stock reserved for future issuance under our equity compensation plans, consisting of:

•                  shares of our common stock to be reserved for future issuance under our 2022 Plan, which will become effective prior to the completion of this offering;

•                  shares of our common stock reserved for future issuance under our 2021 Equity Incentive Plan, which number of shares will be added to the shares of our common stock to be reserved for future issuance under our 2022 Plan upon its effectiveness, at which time we will cease granting awards under our 2021 Equity Incentive Plan; and

•                  shares of our common stock reserved for future issuance under our ESPP, which will become effective prior to the completion of this offering.

Our 2022 Plan and ESPP provide for annual automatic increases in the number of shares of our common stock reserved thereunder, and our 2022 Plan also provides for increases to the number of shares that may be granted thereunder based on shares under our 2021 Equity Incentive Plan that expire, are tendered to or withheld by us for payment of an exercise price or for satisfying tax withholding obligations or are forfeited or otherwise repurchased by us, as more fully described in the section titled “Executive Compensation—Employee Benefit and Stock Plans.”

67

Dilution

If you invest in our common stock in this offering, your ownership interest will be diluted to the extent of the difference between the initial public offering price per share of our common stock and the pro forma as adjusted net tangible book value per share of our common stock immediately after this offering.

Net tangible book value per share is determined by dividing our total tangible assets less our total liabilities by the number of shares of our common stock outstanding. Our historical net tangible book value as of September 30, 2021 was $(9.2) million, or $(0.17) per share. Our pro forma net tangible book value as of September 30, 2021 was $                , or $                per share, based on the total number of shares of our common stock outstanding as of                      , after giving effect to the filing and effectiveness of our amended and restated certificate of incorporation in Delaware that will become effective immediately prior to the completion of this offering.

After giving effect to the sale by us of                 shares of our common stock in this offering at the assumed initial public offering price of $                 per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, our pro forma as adjusted net tangible book value as of September 30, 2021 would have been $                , or $                 per share. This represents an immediate increase in pro forma net tangible book value of $                 per share to our existing stockholders and an immediate dilution in pro forma net tangible book value of $                 per share to investors purchasing shares of our common stock in this offering at the assumed initial public offering price. The following table illustrates this dilution on a per share basis:

Assumed initial public offering price per share				$
Historical net tangible book value per share as of September 30, 2021	$	(0.17	)
Increase per share attributable to the pro forma adjustment described above
Pro forma net tangible book value per share as of	$
Increase in pro forma net tangible book value per share attributable to new investors purchasing shares of common stock in this offering
Pro forma as adjusted net tangible book value per share immediately after this offering
Dilution in pro forma net tangible book value per share to new investors in this offering				$

The dilution information discussed above is illustrative only and may change based on the actual initial public offering price and other terms of this offering. Each $1.00 increase or decrease in the assumed initial public offering price of $                 per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, would increase or decrease, as applicable, our pro forma as adjusted net tangible book value per share to new investors by $                , and would increase or decrease, as applicable, dilution per share to new investors purchasing shares of common stock in this offering by $                , assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. Similarly, each increase or decrease of 1.0 million shares in the number of shares of our common stock offered by us would increase or decrease, as applicable, our pro forma as adjusted net tangible book value by approximately $                 per share and increase or decrease, as applicable, the dilution to new investors purchasing shares of common stock in this offering by $                 per share, assuming the assumed initial public offering price remains the same, and after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

68

If the underwriters’ option to purchase additional shares of our common stock from us is exercised in full, the pro forma as adjusted net tangible book value per share of our common stock, as adjusted to give effect to this offering, would be $                 per share, and the dilution in pro forma net tangible book value per share to new investors purchasing shares of common stock in this offering would be $                 per share.

The following table presents, as of September 30, 2021, the differences between the existing stockholders and the new investors purchasing shares of our common stock in this offering with respect to the number of shares purchased from us, the total consideration paid or to be paid to us, which includes net proceeds received from the issuance of our common stock and the average price per share paid or to be paid to us at the assumed initial public offering price of $                 per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, before deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us:

	Shares purchased			Total consideration			Average price per share
	Number	Percent		Amount	Percentage
Existing stockholders			%	$		%	$
New investors							$
Totals			100%	$		100%

Each $1.00 increase or decrease in the assumed initial public offering price of $                 per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, would increase or decrease, as applicable, the total consideration paid by new investors and total consideration paid by all stockholders by $                , assuming that the number of shares of our common stock offered by us, as set forth on the cover page of this prospectus, remains the same and before deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. Similarly, each increase or decrease of 1.0 million in the number of shares of our common stock offered by us would increase or decrease the total consideration paid by new investors and total consideration paid by all stockholders by $                , assuming the assumed initial public offering price remains the same and before deducting the estimated underwriting discounts and commissions payable by us.

The foregoing table and preceding paragraph do not reflect any sales by the selling stockholder in this offering. Sales by the selling stockholder in this offering will cause the number of shares held by existing stockholders to be reduced to                  shares or approximately         % of the total number of shares of our common stock outstanding after this offering, and will increase the number of shares held by new investors to                  shares, or approximately         % of the total number of shares of our common stock outstanding after this offering.

Except as otherwise indicated, the above discussion and tables assume no exercise of the underwriters’ option to purchase additional shares of our common stock from us. If the underwriters’ option to purchase additional shares of our common stock were exercised in full, our existing stockholders would own         % and our new investors would own         % of the total number of shares of our common stock outstanding upon completion of this offering.

The number of shares of our common stock that will be outstanding after this offering is based on 54,478,907 shares of our common stock outstanding as of September 30, 2021, and excludes the following:

• 1,664,270 shares of common stock subject to RSUs, outstanding as of September 30, 2021;

• 187,655 shares of common stock subject to RSUs granted after September 30, 2021;

69

• 253,080 shares of common stock subject to SARs outstanding as of September 30, 2021 at a weighted average exercise price of $12.04 per share, which right we can elect to satisfy through the issuance of shares or by the payment of a cash settlement equal to the difference between the fair market value of our common stock on the date of exercise and the exercise price, and which our board of directors currently intends to satisfy through the issuance of shares;

• 263,630 shares of common stock subject to SARs granted after September 30, 2021 at a weighted average exercise price of $12.54 per share, which right we can elect to satisfy through the issuance of shares or by the payment of a cash settlement equal to the difference between the fair market value of our common stock on the date of exercise and the exercise price, and which our board of directors currently intends to satisfy through the issuance of shares;

•              shares of our common stock reserved for future issuance under our equity compensation plans, consisting of:

•                  shares of our common stock to be reserved for future issuance under our 2022 Plan, which will become effective prior to the completion of this offering;

•                  shares of our common stock reserved for future issuance under our 2021 Equity Incentive Plan, which number of shares will be added to the shares of our common stock to be reserved for future issuance under our 2022 Plan upon its effectiveness, at which time we will cease granting awards under our 2021 Equity Incentive Plan; and

•                 shares of our common stock reserved for future issuance under our ESPP, which will become effective prior to the completion of this offering.

Our 2022 Plan and ESPP provide for annual automatic increases in the number of shares of our common stock reserved thereunder, and our 2022 Plan also provides for increases to the number of shares that may be granted thereunder based on shares under our 2021 Equity Incentive Plan that expire, are tendered to or withheld by us for payment of an exercise price or for satisfying tax withholding obligations or are forfeited or otherwise repurchased by us, as more fully described in the section titled “Executive Compensation—Employee Benefit and Stock Plans.”

70

Unaudited Pro Forma Combined Financial Information

Introduction

On January 1, 2021, HS Brokerage Holdings, LLC, a subsidiary of HomeSmart, entered into an Acquisition Agreement with KLP Trust and JTE Trust (“Seller”) to acquire (the “Acquisition”) PalmerHouse Properties, LLC, PalmerHouse Properties and Associates, LLC, and PalmerHouse Properties Lake Country, LLC (collectively “PalmerHouse”). In April 2021, we executed certain transactions that had the net effect of reorganizing HomeSmart’s corporate structure (“Corporate Reorganization” or “Reorganization”). As part of the Corporate Reorganization, HomeSmart Holdings, Inc., obtained 100% of the equity interests in HomeSmart subsidiaries and affiliates that were under common control by Matthew Widdows, Chief Executive Officer, and his affiliated entities. Following the Reorganization, HomeSmart Holdings, Inc. and its subsidiaries will be taxed as C corporations for federal and state income tax purposes. The Acquisition and Corporate Reorganization are referred to together as the “Transaction.”

HomeSmart is providing the following unaudited pro forma combined financial information to aid you in your analysis of the financial aspects of the acquisition. The following unaudited pro forma combined financial information has been prepared in accordance with Article 11 of Regulation S-X as amended by the final rule, Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses.” HomeSmart has elected not to present management’s adjustments and will only be presenting transaction accounting adjustments in the unaudited pro forma condensed combined financial information.

The unaudited pro forma combined balance sheet as of December 31, 2020 gives effect to the Acquisition, as if the Acquisition had been completed on December 31, 2020 and combines the audited combined balance sheet of PalmerHouse as of December 31, 2020 with HomeSmart’s audited combined balance sheet as of December 31, 2020. The Condensed Consolidated Balance Sheet as of September 30, 2021 presented elsewhere in this document already reflects all the impacts of the Transaction; as such, a separate pro forma combined balance sheet is not presented as of the interim date.

The unaudited pro forma combined statement of income for the nine months ended September 30, 2021 gives effect to the Transaction as if the Transaction had occurred on January 1, 2020, the first day of HomeSmart’s fiscal year 2020, and considering the Acquisition occurred on January 1, 2021 it includes the consolidated results of HomeSmart and PalmerHouse.

The unaudited pro forma combined statement of income for the year ended December 31, 2020 gives effect to the Acquisition as if the Acquisition had occurred on January 1, 2020, the first day of HomeSmart’s fiscal year 2020, and combines the historical results of HomeSmart and PalmerHouse.

The historical financial statements of HomeSmart and PalmerHouse have been adjusted in the accompanying unaudited pro forma combined financial information to give effect to pro forma events that are transaction accounting adjustments which are necessary to account for the Acquisition and the financing of the Acquisition, in accordance with U.S. GAAP. The unaudited pro forma adjustments are based upon available information and certain assumptions that our management believe are reasonable.

The unaudited pro forma combined financial information should be read in conjunction with:

• the accompanying notes to the unaudited combined pro forma financial information;

• the separate audited combined financial statements of HomeSmart for the fiscal year ended December 31, 2020 and the related notes;

• the separate audited combined financial statements of PalmerHouse for the fiscal year ended December 31, 2020; and

71

• the separate unaudited condensed consolidated financial statements of HomeSmart for the nine months ended September 30, 2021.

Description of the Transaction and financing

On January 1, 2021, HomeSmart completed the acquisition of PalmerHouse Properties, LLC, PalmerHouse Properties and Associates, LLC, and PalmerHouse Properties Lake Country, LLC. The acquisition consideration was $12.6 million, plus or minus a customary working capital adjustment and minus any outstanding debt and transaction expenses. The $12.6 million payable to the seller consisted of $6.3 million in cash and a $6.3 million unsecured promissory note. The amount of the promissory note is variable pending certain requirements being met (or not met) by the acquired brokerage group. HomeSmart expects the requirements will be met and as such, the $6.3 million promissory note is expected to be payable in full. The promissory note bears interest at a non-compounded rate equal to London interbank offered rate (“LIBOR”) plus 3.0% per annum, calculated on the anniversary date of closing and is payable in 60 monthly installments due on or before the tenth day of each month.

Subsequent to the initial valuation, the acquisition consideration calculation of $12.6 million noted above was revised upward to $14.8 million due to the customary working capital mechanism and adjustments for any outstanding debt and transaction expenses. The adjustment occurred during the one-year from the acquisition date measurement period (the “measurement period”) businesses have to finalize their accounting for business combinations. The adjusted acquisition consideration of $14.8 million is reflected in Note 3 to the unaudited pro forma combined financial statements below; however, it is not reflected in the subsequent event disclosure of the HomeSmart Holdings, Inc. audited financial statements for the years ended 2020 and 2019, beginning on page F-1 for this filing.

HomeSmart has access to a secured credit facility for which draws may be used for acquisitions and general corporate purposes (the “Operating Secured Credit Facility”). In connection with the acquisition agreement, HomeSmart withdrew $6.3 million from this facility to cover the upfront cash payment of the acquisition consideration. The Operating Secured Credit Facility is secured by the personal property and assets of the Founder and multiple subsidiaries of HomeSmart wholly owned by the Founder. Borrowings bear interest at a rate equal to the LIBOR, plus an applicable margin.

The acquisition agreement requires Kevin Palmer, as the trustee of KLP Trust and founder and former CEO of PalmerHouse, to continue to provide services to HomeSmart for a period not to exceed one year from the closing date. Also, per the acquisition agreement, HomeSmart will continue to employ all salaried employees for one year from the closing date, either in the form of actual employment or paid out through severance.

Customary non-compete and non-solicitation restrictions, all of which are subject to certain exceptions and qualifications, are also included in the acquisition agreement.

In the reorganization process, Mr. Widdows contributed a $2.0 million note receivable to HomeSmart Holdings, Inc., the principal balance of which was subsequently paid in full by Mr. Widdows in April 2021. No interest was paid. Additionally, we entered into two notes payable with legal entities that Mr. Widdows holds a 100% ownership interest in. The two notes payable, effectively due to Mr. Widdows, were issued with initial principal balances of $7.0 million and $3.0 million, respectively. Both bear interest at a rate of 3.0% per annum and mature in March 2029. The notes payable were treated as a dividend to Mr. Widdows and recorded as a net reduction to retained earnings. As part of the Reorganization, on April 1, 2021, we also issued 54,477,907 shares of common stock to the various entities affiliated with Mr. Widdows, 337,743 of these shares were issued in exchange for the note receivable from Mr. Widdows and the remaining 54,140,164 were issued for nominal consideration. All share and per share amounts presented herein have been retroactively adjusted to reflect the impact of this issuance of the 54,140,164 shares in accordance with ASC 260-10-55-12.

72

Accounting for the Transaction

The Transaction is being accounted for as a business combination using the acquisition method with HomeSmart as the accounting acquirer in accordance with Accounting Standards Codification (“ASC”) Topic 805, Business Combinations. Under this method of accounting, the acquisition consideration will be allocated to PalmerHouse’s assets acquired and liabilities assumed based upon their estimated fair values at the date of completion of the acquisition. The process of valuing the net assets of PalmerHouse, as well as evaluating accounting policies for conformity, is preliminary. Any differences between the fair value of the consideration transferred and the fair value of the assets acquired and liabilities assumed will be recorded as goodwill. Accordingly, the acquisition consideration allocation and related adjustments reflected in this unaudited pro forma combined financial information are preliminary and subject to revision based on a final determination of fair value. Refer to Note 1—Basis of Presentation for more information.

The unaudited pro forma combined financial information presented is for informational purposes only and is not necessarily indicative of the financial position or results of operations that would have been realized if the acquisition had been completed on the dates set forth above, nor is it indicative of future results or financial position of the combined company.

The unaudited pro forma combined statement of income is presented as if the Reorganization had occurred on January 1, 2020, including the impact of HomeSmart and its subsidiaries being taxed as C corporations for federal and state income tax purposes as of that date.

73

Unaudited pro forma combined balance sheet

As of December 31, 2020

	HomeSmart Historical December 31, 2020		PalmerHouse Historical December 31, 2020		Acquisition adjustments			(Note 3)			Pro forma combined
	(In thousands)
Assets
Current assets
Cash and cash equivalents	$	10,690	$	1,890	$	—					$	12,580
Accounts receivable, net		1,642		698		—						2,340
Prepaid Expenses		782		—		—						782
Due from related parties		134		—		2,000			(a	)		2,134
Other Current Assets		660		54		—						714
Mortgage loans held for sale		2,698		—		—						2,698
Total current assets	$	16,606	$	2,642	$	2,000					$	21,248
Property and equipment, net		1,965		32		—						1,997
Goodwill		5,161		—		4,190			(b	)		9,351
Intangibles, net		306		—		7,100			(c	)		7,406
Other non-current assets		847		140		1,698			(d	)		2,685
Total assets	$	24,885	$	2,814	$	14,988					$	42,687
Liabilities and stockholders’ equity
Current liabilities
Accounts payable	$	515	$	326	$	—					$	841
Accrued expenses		1,077		680		—						1,757
Commissions payable		521		—		—						521
Due to related parties		2,239		—		—						2,239
Accrued consideration payable		—		—		2,196			(e	)		2,196
Secured credit facilities		3,569		—		6,300			(f	)		9,869
Current portion of notes payable		497		—		1,177			(g	)		1,674
Total current liabilities	$	8,418	$	1,006	$	9,673					$	19,097
Long-term notes payable		214		—		5,123			(h	)		5,337
Long-term related party notes payable		—		—		10,000			(i	)		10,000
Deferred rent due to related party		—		744		(744	)		(j	)		—
Other non-current liabilities		1,062		—		218			(k	)		1,280
Total liabilities	$	9,694	$	1,750	$	24,270					$	35,714
Stockholders’ equity
Net Parent Investment	$	—	$	1,064	$	(1,064	)		(l	)	$	—
Common stock		541		—		4			(m	)		545
Additional paid-in-capital		12,802		—		1,996			(m	)		14,257
Retained earnings		2,389		—		(10,218	)		(n	)		7,829
Total stockholders’ equity		15,191		1,064		(9,282	)					6,973
Total liabilities and stockholders’ equity	$	24,885	$	2,814	$	14,988					$	42,687

See the accompanying notes to the Unaudited Pro Forma Combined Financial Information

74

Unaudited pro forma combined statement of income

For the year ended December 31, 2020

	HomeSmart year ended December 31, 2020		PalmerHouse year ended December 31, 2020		Reclassification adjustments			(Note 2)		Acquisition adjustments			(Note 4)		Pro forma combined
	(In thousands, except per share data)
Revenue
Real estate brokerage	$	380,890	$	82,521	$	—				$	—					463,411
Franchise		5,635		—		—					—					5,635
Affiliated business services		5,981		—		—					—					5,981
Total revenue	$	392,506	$	82,521	$	—				$	—				$	475,027
Operating expenses
Commission and other agent-related costs	$	362,059	$	76,168		—					—				$	438,227
General and administrative		16,576		3,082		—					916			(a)		20,574
Sales, marketing, and advertising		3,975		418		—					—					4,393
Depreciation and amortization		911		—		—					1,580			(b)		2,491
Total operating expenses	$	383,521	$	79,668		—					2,496					465,685
Income (loss) from operations	$	8,985	$	2,853	$	—				$	(2,496	)				9,342
Investment Income		—		510		(510	)		(a)		—					—
Interest expense		182		—		—					666			(c,d,e)		848
Other income (expense), net		557		280		510					—					1,347
Income (loss) before income taxes	$	9,360	$	3,643	$	—				$	(3,162	)			$	9,841
Income tax expense		155		—		—					2,130			(f)		2,285
Net income (loss)	$	9,205	$	3,643	$	—				$	(5,292	)			$	7,556
Net income per share basic and diluted	$	0.17													$	0.14
Weighted average common shares outstanding, basic and diluted		54,141,164														54,141,164

See the accompanying notes to the Unaudited Pro Forma Combined Financial Information

75

Unaudited pro forma combined statement of income

For the nine months ended September 30, 2021

	Nine months ended September 30, 2021			Transaction Adjustments			(Note 4)		Pro Forma Combined
	(in thousands, except per share data)
Revenue
Real Estate Brokerage	$	466,843		$	—				$	466,843
Franchise	$	5,279		$	—				$	5,279
Affiliated Business Services	$	5,571		$	—				$	5,571
Total Revenue	$	477,693		$	—				$	477,693
Operating Expenses
Commission and other agent-related costs	$	447,059		$	—				$	447,059
General and administrative	$	26,524		$	(916	)		(a)	$	25,608
Sales, marketing, and advertising	$	4,966		$	—				$	4,966
Depreciation and Amortization	$	1,953		$	—				$	1,953
Total Operating Expenses	$	480,502		$	(916	)			$	479,586
Loss from Operations	$	(2,809	)	$	916				$	(1,893	)
Interest expense	$	522		$	—				$	522
Other income (expense), net	$	747		$	—				$	747
Loss before income taxes	$	(2,584	)	$	916				$	(1,668	)
Income tax benefit	$	(237	)	$	37			(f)	$	(200	)
Net loss	$	(2,347	)	$	879				$	(1,468	)
Net income per share basic and diluted		(0.04	)						$	(0.03	)
Weighted average common shares outstanding, basic and diluted		54,478,907								54,478,907

See the accompanying notes to the Unaudited Pro Forma Combined Financial Information

76

Notes to the unaudited pro forma combined financial information

Note 1 - Basis of presentation

The unaudited pro forma combined financial information and related notes are prepared in accordance with Article 11 of Regulation S-X as amended by the final rule, Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses.”

HomeSmart and PalmerHouse’s historical financial statements were prepared in accordance with U.S. GAAP and presented in U.S. dollars. As discussed in Note 2, certain reclassifications were made to align HomeSmart and PalmerHouse’s financial statement presentation. HomeSmart has identified all adjustments necessary to conform PalmerHouse’s accounting policies to HomeSmart’s accounting policies.

The Reorganization, which occurred in the second quarter of 2021, ultimately consolidated each of the individual legal entities under common control which required the acquired entities to be combined at their historical cost. Prior to the Reorganization, Holdings and its subsidiaries had no operations and immaterial assets or liabilities.

The unaudited pro forma combined financial information was prepared using the acquisition method of accounting in accordance with ASC 805, with HomeSmart as the accounting acquirer, using the fair value concepts defined in ASC Topic 820, Fair Value Measurement, and based on the historical combined financial statements of HomeSmart and PalmerHouse. Under ASC 805, all assets acquired and liabilities assumed in a business combination are recognized and measured at their assumed acquisition date fair value, while transaction costs associated with the business combination are expensed as incurred. The excess of acquisition consideration over the fair value of assets acquired and liabilities assumed, if any, is allocated to goodwill.

The allocation of the consideration for the acquisition depends upon certain estimates and assumptions, all of which are preliminary. The allocation of the acquisition consideration has been made for the purpose of developing the unaudited pro forma combined financial information. The final determination of fair values of assets acquired and liabilities assumed relating to the acquisition could differ materially from the preliminary allocation of acquisition consideration. The final valuation will be based on the actual net tangible and intangible assets of PalmerHouse existing at the acquisition date.

The unaudited pro forma combined balance sheet, as of December 31, 2020 and the unaudited pro forma combined statement of income for the twelve months and fiscal year ended December 31, 2020 presented herein, are based on the historical financial statements of HomeSmart and PalmerHouse.

The unaudited pro forma combined financial information does not reflect any anticipated synergies, operating efficiencies or cost savings that may result from the acquisition or any acquisition and integration costs that may be incurred. The pro forma adjustments represent HomeSmart management’s best estimates and are based upon currently available information and certain assumptions that HomeSmart believes are reasonable under the circumstances. HomeSmart is not aware of any material transactions between HomeSmart and PalmerHouse during the periods presented. Accordingly, adjustments to eliminate transactions between HomeSmart and PalmerHouse have not been reflected in the unaudited pro forma combined financial information.

Note 2 - HomeSmart and PalmerHouse’s reclassification adjustments

During the preparation of this unaudited pro forma combined financial information, management performed an analysis of PalmerHouse’s financial information to identify differences in accounting policies as compared to those of HomeSmart and differences in financial statement presentation as compared to the presentation of

77

HomeSmart. HomeSmart has determined that no significant adjustments are necessary to conform PalmerHouse’s financial statements to the accounting policies used by HomeSmart. However, certain reclassification adjustments have been made to conform PalmerHouse’s historical financial statement presentation to HomeSmart’s financial statement presentation.

Refer to the table below for a summary of adjustments made to present PalmerHouse’s statement of income for the year ended December 31, 2020 to conform with that of HomeSmart’s:

Consolidated statement of income For the year ended December 31, 2020
(in thousands)	Pro forma reclassification adjustments
Investment Income (1)	$	(510	)
Other income (expense), net		510

(1) Represents a reclassification of investment income to conform with HomeSmart’s presentation

Note 3 – Adjustments to the unaudited pro forma combined balance sheet

Estimated acquisition consideration allocation

The following table summarizes the estimated acquisition consideration:

(in thousands)	Amount
Upfront cash payment transferred to Seller (1)	$	6,300
Promissory Note (5 Year at Libor + 3% annual interest) (2)	$	6,300
Accrued consideration payable (3)	$	2,196
Preliminary estimated acquisition consideration	$	14,796

(1) The cash component of the estimated acquisition consideration is based on the $6.3 million upfront cash payment to the seller.

(2) The promissory note component of the estimated acquisition consideration consists of the principal sum of $6.3 million.

(3) Adjustments to estimated consideration payable to sellers based on actual acquisition consideration.

Preliminary acquisition consideration allocation

The following table summarizes the preliminary acquisition consideration allocation, as if the acquisition had been completed on December 31, 2020. As previously mentioned, the allocation is dependent upon certain valuation and other studies that are yet to be finalized.

(in thousands)	Amount
Cash and cash equivalents	$	1,890
Accounts receivable, net	$	698
Other current assets	$	54
Property and equipment, net (1)	$	32
Other non-current assets (2)	$	1,838
Intangible assets, net (3)	$	7,100
Accounts payable	$	(326	)
Other current liabilities	$	(680	)
Goodwill	$	4,190
Estimated acquisition consideration	$	14,796

(1) Property and equipment consists primarily of office and computer equipment, leasehold improvements and furniture for which the carrying value is assumed to approximate fair value.

78

(2) Other non-current assets primarily consist of the fair value of PalmerHouse’s investment in Independence Title & Escrow, LLC. The fair value of the PalmerHouse’s equity investment is preliminary and is based on management’s estimates after consideration of similar transactions.

(3) Preliminary fair value of identifiable intangible assets in the unaudited pro forma combined financial information consists of the following:

(in thousands)	Preliminary fair value		Estimated useful life
Fair value of intangible assets acquired
Agent Relationships	$	4,800		5 years
Trade Name		2,100		5 years
Pendings and Listings		200		1 year
Intangible assets acquired	$	7,100

The identifiable intangible assets and related amortization are preliminary and are based on management’s estimates after consideration of similar transactions. As discussed above, the amount that will ultimately be allocated to identifiable intangible assets and liabilities, and the related amount of amortization, may differ materially from this preliminary allocation. Pro forma amortization is preliminary and based on the use of straight-line amortization. The amount of amortization following the acquisition may differ significantly between periods based upon the final value assigned and amortization methodology used for each identifiable intangible asset and liability.

Adjustments to the unaudited pro forma combined balance sheet

(a) Reflects HomeSmart Holdings note receivable from Matthew Widdows as it relates to the Corporate Reorganization.

(b) Preliminary goodwill adjustment of $4.2 million which represents the excess of the estimated acquisition consideration over the preliminary fair value of the underlying assets acquired and liabilities assumed.

(c) Reflects the preliminary purchase accounting adjustment for estimated intangibles acquired.

(d) Reflects the preliminary purchase accounting adjustment for estimated fair value of the PalmerHouse’s equity method investment.

(e) Reflects adjustments to estimated consideration payable to sellers based on actual acquisition consideration.

(f) Reflects adjustment for the $6.3 million withdrawn from the Operating Secured Credit Facility.

(g) Reflects the current portion of the promissory note payable to the sellers.

(h) Reflects the non-current portion of the promissory note payable to the sellers.

(i) Reflects the notes payable to Matthew Widdows as it relates to the Corporate Reorganization.

(j) Reflects adjustment to write-off the existing deferred rent balance as it is not an identifiable liability assumed as part of the acquisition of PalmerHouse.

(k) Reflects the deferred tax liability generated as a result of the Corporate Reorganization.

79

(l) Reflects the elimination of PalmerHouse’s historical equity accounts.

(m) Reflects the issuance of 337,743 shares with $0.01 par value that were issued in exchange for the note receivable to Matthew Widdows and affiliated entities.

(n) Reflects the impact in retained earnings associated with the Reorganization.

Note 4 – Pro forma adjustments for combined statement of operations

Adjustments included in the Transaction Adjustments column in the accompanying unaudited pro forma combined statement of income for the fiscal year ended December 31, 2020 are as follows:

(a) Reflects the expenses associated with the Transaction incurred during 2021.

(b) Reflects the amortization of intangible assets acquired as a result of the Acquisition. The amortization of intangible assets is based on the periods over which the economic benefits of the intangible assets are expected to be realized.

(c) Reflects the expense related to interest on the $6.3 million promissory note issued to seller as part of the Acquisition:

(i) The interest expense adjustments included in the unaudited pro forma combined statement of income reflect the additional interest expense using an estimated interest rate of 3.34% per annum.

(ii) The effect of a 10 basis point change of the hypothetical interest on the acquisition financing results in a $6,000 increase/decrease in the interest expense for the year ended December 31, 2020.

(d) Reflects the expense related to interest on the $6.3 million draw from the Operating Secured Credit Facility:

(i) The interest expense adjustments included in the unaudited pro forma combined statement of income reflect the additional interest expense using an estimated interest rate of 3.85% per annum.

(ii) The effect of a 10 basis point change of the hypothetical interest on the acquisition financing results in a $5,000 increase/decrease in the interest expense for the year ended December 31, 2020.

(e) Reflects the expense related to interest on the $10.0 million notes payable to Mr. Widdows.

(i) The interest expense adjustments included in the unaudited pro forma combined statement of income reflect the additional interest expense using an estimated interest rate of 3.00% per annum.

(ii) The effect of a 10 basis point change of the hypothetical interest on the acquisition financing results in a $10 thousand increase/decrease in the interest expense for the year ended December 31, 2020.

(f) Reflects the additional tax expense as if the legal entities are taxed as C corporations for federal and state income tax purposes.

80

Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of our financial condition and results of operations together with our combined financial statements and related notes included elsewhere in this prospectus. This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under the section titled “Risk Factors” or in other parts of this prospectus. Our historical results are not necessarily indicative of the results that may be expected for any period in the future.

Overview

HomeSmart is a revolutionary real estate enterprise powered by our proprietary end-to-end technology platform. We provide integrated real estate solutions to agents, brokerages, franchisees and ultimately consumers. Our cloud-based platform empowers our users to succeed by providing a full suite of technology offerings covering every aspect of the real estate transaction. The drive toward a seamless home buying and selling experience is the catalyst for our growth. Technology and automation are at the core of our DNA—grounded in fiscal responsibility and operational excellence. We have been developing our software in-house over the last 20 years and have a 100% adoption rate across our agents. All of our franchisees and agents are automatically added as users and all transactions are processed through our technology platform. Our technology platform is focused on scalability and automation to drive transaction velocity, volume and operating leverage for our brokers, franchisees, agents and consumers.

The market for residential real estate transactions and home-related services is highly fragmented, local and complex. Real estate agents generally operate in local markets as independent contractors and typically move around from brokerage to brokerage, across disparate external systems and databases, and use a multitude of services to close just one transaction. To use these services, agents are charged numerous fees and are subject to high commission splits, which may ultimately get passed on to the consumer. Operating profitability of agents is further reduced by ongoing competitive dynamics that allow consumers to push agents for lower commissions on transactions. According to NAR, 75% of all agents in the United States are being charged traditional commission splits by their brokerage that typically range from 16% to 39% or more, demonstrating there is a clear void in cost-effective, scalable, integrated solutions.

We have built a cost-effective, agent-centric real estate business model powered by our cloud-based, end-to-end platform encompassing all aspects of the residential real estate transaction. Together, our model and platform empower brokers, franchisees and agents with the ability to provide a seamless transaction process for consumers, while providing a flat transaction fee for franchisees and agents. Our RealSmart technology suite includes RealSmart Broker – brokerage and agent management; RealSmart Agent – business and transaction management; and RealSmart Client – buying and selling transaction management; through which franchisees, agents and consumers are connected and are able to conduct all aspects of the real estate process. Our RealSmart platform includes virtual tours, marketing, document management, process (sale, purchase, mortgage, title and escrow) tracking, education and training, listing management and more. Additionally, our RealSmart platform allows data to be aggregated for accurate insights, decision making, real-time reporting, business management and transparency for the consumer. We have used the power of our technology, the structure of our fees and our dedicated customer service team to create a technology-enabled model that drives the success of real estate professionals.

81

We were founded in 2000 by Matthew Widdows, first launching in Phoenix, Arizona. We recognized an opportunity to use technology to elevate the real estate experience by providing agents with access to our proprietary platform to help scale and grow in the massive residential real estate market. We set out to combine traditional real estate concepts with technology and service to remove the unnecessary costs and inefficiencies from the process. Unlike many real estate companies that use technology to distance themselves from agents or remove them from the transaction, HomeSmart seeks to empower the agent to provide long-term growth and stability. The combination of being service oriented, technology enabled and fiscally sound sets us apart from the competition.

We have turned process and product expertise into a powerful business model with strong unit economics. Since our founding, we have demonstrated consistent results across the key geographies and markets that we serve. Our business model is highly repeatable, and although there are nuances in each market we operate in, we have a strong track record of profitability setting us up for success when we enter new markets. The replicable margin profile across U.S. markets provides us with significant operating leverage as we scale.

82

Our business model has fueled our expansion and to date, our business has consistently been funded with cash from our operations. We have over 23,000 agents across 194 offices in 47 states. HomeSmart was ranked in the top five residential real estate brokerages by number of transaction sides in the United States by RISMedia in 2020.

Our business model

We have built a profitable business model with multiple revenue streams. We generate the majority of our revenue from the real estate transactions executed by our corporate-owned brokerages whereby our agents represent consumers buying or selling homes. Real estate commissions, or gross commissions, earned by our real estate brokerage business are recorded as revenue upon the closing of a transaction. In turn, we also recognize the commissions we pay to our real estate agents as commission and other agent-related costs. While part of our value proposition is for our agents to retain 100% commission, we charge various fees to our agents, which is recognized as a reduction to our Commission and other agent-related costs.

We also franchise our real estate brands to real estate brokerage businesses that are independently owned and operated and provide branding, marketing, technology, and other services to our franchisees in exchange for franchise fees. Franchise revenue principally consists of royalty and marketing fees from our franchisees. The royalty received is primarily based on a flat per agent per month fee and a flat fee per transaction. We also earn marketing fees from our franchisees and utilize such fees to fund marketing campaigns on behalf of our franchisees.

Lastly, we offer full stack affiliated business services, including mortgage, title, escrow, and other ancillary services to enable smooth real estate transactions. We generate revenue through transaction related fees for business services.

83

Our Franchise and Affiliated Business Services segments have significantly higher gross margins than our Real Estate Brokerage segment. We plan to continue to expand these offerings across our markets, and to develop additional offerings to enhance the experience for HomeSmart agents and consumers. Franchise and Affiliated Business Services have not contributed a significant portion of our revenue to date, although we expect these revenue streams to grow in the future.

84

Key business metrics and financial measures

In addition to the measures presented in our consolidated financial statements, we use the following key business metrics and financial measures to evaluate our business, measure our performance, develop financial forecasts, and make strategic decisions.

	Year ended December 31,				Change 2019 vs. 2020				Nine months ended September 30				Change 2020 vs. 2021
	2019		2020		# or $		%		2020		2021		# or $		%
Key Metrics
Real Estate Brokerage
Agents		10,495		11,084		589		6%		10,945		13,654		2,709		25%
Closed transaction sides		37,029		40,919		3,890		11%		29,320		43,748		14,428		49%
Volume (in billions)	$	12.94	$	15.85	$	2.91		23%	$	11.08	$	18.97	$	7.89		71%
Franchises(1)
Agents		7,346		8,761		1,415		19%		8,385		9,543		1,158		14%
Closed transaction sides		30,264		38,304		8,040		27%		26,635		35,831		9,196		35%
Volume (in billions)	$	10.70	$	14.30	$	3.60		34%	$	9.56	$	14.95	$	5.39		56%
Financial Measures
Revenues (in thousands)	$	324,605	$	392,506	$	67,901		21%	$	275,075	$	477,693	$	202,618		74%
Gross profit (in thousands)(2)	$	25,708	$	30,447	$	4,739		18%	$	22,367	$	30,634	$	8,267		37%
Gross profit %		7.9%		7.8%		-0.2%		-2%		8.1%		6.4%		(1.7)%		(21)%
EBITDA (in thousands)	$	7,072	$	10,453	$	3,381		48%	$	8,095	$	(109)	$	(8,204)		(101)%
EBITDA margin %		2.2%		2.7%		0.5%		22%		2.9%		0.0%		(3.0)%		(101)%

(1) Includes all Franchises except those included in the Real Estate Brokerage group above

(2) This is defined as total revenues less commissions and other agent related costs as derived from the Statement of Operations

Key business metrics

Real estate agents

We define Real Estate Agents as independent real estate licensees associated with one of our franchised or corporate-owned brokerages. As of December 31, 2019 and 2020, our total number of agents was 17,841 and 19,845, respectively, which consisted of 10,495 and 11,084 brokerage agents and 7,346 and 8,761 franchise agents, respectively. As of September 30, 2020 and 2021, our total number of agents was 19,330 and 23,197, respectively, which consisted of 10,945 and 13,654 brokerage agents and 8,385 and 9,543 franchise agents, respectively.

Each year, a significant portion of our agents join organically. The low cost to agents coupled with the power of our brand yields cost-efficient customer acquisition metrics and unlocks attractive unit economics for our agents. In the previous four fiscal years combined, we have averaged 75% net agent growth organically whereas 25% net agent growth have been realized through acquisition. As of September 30, 2021 our agent growth was 3,867 or 20% when compared to September 30, 2020, 11% of which was realized due to our acquisition of PalmerHouse.

We believe that we have the opportunity to continue growing our agent count both within and beyond the markets where we currently operate.

85

Closed transactions

We define closed transactions as the sum of all transaction sides closed on our platform. A side is a party to a real estate transaction, with most transactions including a buyer and a seller, thus adding up to two sides. We include a single transaction twice when one or more HomeSmart agents represent both the buyer and seller in any given transaction. We exclude transactions related to rentals in this metric. For the years ended December 31, 2019 and 2020, we closed 67,293 and 79,223 sides, respectively, which consisted of 37,029 and 40,919 sides closed by our corporate-owned brokerages agents and 30,264 and 38,304 sides closed by franchise agents, respectively. For the nine months ended September 30, 2020 and 2021, we closed 55,955 and 79,579 sides, respectively, which consisted of 29,320 and 43,748 sides closed by our corporate-owned brokerages’ agents and 26,635 and 35,831 sides closed by franchise agents, respectively.

Closed transactions is a key measure of the scale of our platform and drives our financial performance. Closed transactions have increased over time as we expanded our network of agents, entered new markets, and as existing agents increased their productivity through the use of our platform.

We experience seasonality in closed transactions. In the real estate industry, a higher number of transactions close in the second and third quarters of the year than in the first and fourth quarters of the year. We believe that this seasonality has affected and will continue to affect our quarterly results. However, our rapid growth in recent years may obscure the extent to which seasonal trends have affected our business and may continue to affect our business. Our closed transactions are also influenced by market conditions that affect home sales, such as local inventory levels and mortgage interest rates.

86

Transaction volume

Transaction volume is the sum of all closing sale prices for homes transacted by agents on the HomeSmart platform. We include the value of a single transaction twice when our agents serve both the home buyer and home seller in the transaction. Home prices and corresponding real estate commissions drive revenue numbers; however, number of agents and closed transaction sides drive gross profit. Therefore, when fluctuation in home values occurs, we don’t necessarily see a direct impact to our operations.

Transaction volume is a key measure of the scale of our platform and success of our agents, which ultimately impacts revenue. In recent years, we have seen our transaction volume grow from $23.6 billion in 2019 to $30.2 billion in 2020, representing growth of 28.0%. This consisted of $12.9 billion and $15.9 billion for our Real Estate Brokerage segment and $10.7 billion and $14.3 billion for our Franchise segment for 2019 and 2020, respectively. Transaction volume grew from $20.6 billion for the nine months ended September 30, 2020 to $33.9 billion for the nine months ended September 30, 2021, representing growth of 64%. This consisted of $11.1 billion and $19.0 billion for our Real Estate Brokerage segment and $9.6 billion and $14.9 billion for our Franchise segment for nine months ended 2020 and 2021, respectively.

87

Cohort trends

Historically, agents grow and become more successful once they join our platform. We have observed an increase in agent productivity as they benefit from the full suite of our proprietary technology offerings. As agents are able to drive and close a higher volume of transactions, they earn more in commissions. Even though the overall industry is facing downward pressure on agent commissions, our platform allows our agents to earn more as they are able to close more transactions at an increasing pace and build their own brand. This is a key indicator of the success of our business model as it enables us not only to continually grow our revenue but also to engage, retain and recruit agents on our platform over time. On a rolling six-month cohort basis between the first half of 2016 and the first half of 2019, our agents saw an average increase in agent revenues of approximately 20% from the first year to the second year after joining our platform.

In addition, the cohort chart below shows the increase in agent revenues (net of churn) generated from agent cohorts since 2016. The first year of a cohort reflects four quarters of revenues for agents that joined our platform in the first quarter, three quarters of revenues for agents that joined in the second quarter, two quarters of revenue for agents that joined in the third quarter, and one quarter of revenue for agents that joined in the fourth quarter.

Non-GAAP financial measures

EBITDA and EBITDA margin

EBITDA is a non-GAAP financial measure that represents our net income adjusted for interest expense, income taxes, and depreciation and amortization. EBITDA Margin is calculated by dividing EBITDA by revenue.

We use EBITDA and EBITDA Margin in conjunction with GAAP measures as part of our overall assessment of our performance, including the preparation of our annual operating budget and quarterly forecasts, to evaluate the effectiveness of our business strategies and to communicate with our board of directors concerning our financial performance. We believe EBITDA and EBITDA Margin are also helpful to investors, analysts and other

88

interested parties because they can assist in providing a more consistent and comparable overview of our operations across our historical financial periods. EBITDA and EBITDA Margin have limitations as analytical tools, however, and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP. Because of these limitations, you should consider EBITDA and EBITDA Margin alongside other financial performance measures, including net income (loss) and our other GAAP results. In evaluating EBITDA and EBITDA Margin, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of EBITDA and EBITDA Margin should not be construed to imply that our future results will be unaffected by the types of items excluded from the calculation of EBITDA and EBITDA Margin. EBITDA and EBITDA Margin are not presented in accordance with GAAP and the use of these terms varies from others in our industry.

The following table provides a reconciliation of Net income to EBITDA:

	Year ended December 31,				Nine months ended September 30,
	2019		2020		2020		2021
	(in thousands, except percentages)
Net income (loss)	$	5,996	$	9,205	$	7,140	$	(2,347	)
Adjusted to exclude the following:
Interest expense		220		182		141		522
Income tax expense (benefit)		191		155		142		(237	)
Depreciation and amortization		665		911		672		1,953
EBITDA	$	7,072	$	10,453	$	8,095	$	(109	)
EBITDA margin %		2.2%		2.7%		2.9%		0.0%

Key factors affecting our performance

We believe that the future success of our business depends on many factors, including the factors described below. While each of these factors presents significant opportunities for our business, they also pose important challenges that we must successfully address in order to continue to grow our business.

Growth in the number of agents and closed transactions on our platform

Our continued success depends on our ability to grow the number of agents and increase transaction volume on our platform. As we increase the number of our agents, our closed transactions grow, which in turn drives revenue growth through higher commissions, franchise fees and affiliated business services fees. We intend to drive continued growth in the number of agents on our platform in the markets where we have an established presence, as well as entering into new markets. Our expansion in new markets is fueled by new market development, corporate acquisitions, and franchise sales. We continuously invest to increase brand awareness, which has historically driven substantial growth in the number of agents on our platform and our revenue. As agents join our platform and realize the value of the business model and technology, this results in referrals to HomeSmart and accelerates our growth. We seek to continue to grow our agent count and increase our number of closed transactions to grow our revenue, increase profitability and drive greater cash flows.

Expansion of affiliated businesses

We have entered into, and plan to continue to enter into, new affiliated business opportunities. We also plan to expand our title and mortgage services offerings across our corporate brokerage markets and franchise markets, either through partnerships or direct offerings. We believe that expansion in these affiliated business

89

opportunities will further establish HomeSmart as a single platform that enables consumers, agents, brokers and franchisees to manage transactions seamlessly. We expect that entering into affiliated businesses will also increase our revenue, improve our gross margin, and result in greater profitability in the long term.

Execution of strategic acquisitions

We intend to continue to make strategic acquisitions to grow our agent count, expand into new markets or add new capabilities to our technology platform. We opportunistically target brokerages in larger metropolitan regions where growth and transaction volumes are of scale, transaction volumes per agent are strong and synergy potential from displacing expensive point solutions are high. We have a strong track record of acquisitions and have integrated multiple brokerages and franchisees into our business, which has helped drive our profitable growth. We believe that our future results of operations will be affected by our ability to continue to identify and execute such transactions that are accretive to our growth and profitability.

Investment in growth

We intend to continue to invest in our business so that we can capitalize on our large market opportunity. We plan to further invest in our technology platform to drive agent productivity and increase the value proposition of the HomeSmart business model. Our proprietary technology streamlines the transaction management process through an automated interface, which allows our brokerage and our agents to close a high number of transactions quickly. We are developing a more integrated experience for the consumer and their agent, which we believe will drive a more seamless experience and increase repeat business with the consumer and the HomeSmart brand. Additionally, we will also invest in our sales and marketing activities to attract and retain franchise partners and agents, increase brand awareness with home buyers and sellers, and increase our revenue per side through our affiliated businesses. We also expect to incur additional general and administrative expenses to support our growth and our transition to a publicly traded company. EBITDA and EBITDA margin decreased during the nine months ended September 30, 2021 compared to the same period in 2020, as a result of non-recurring professional services expenses incurred in preparation for our initial public offering, as well as stock-based compensation. While our investments in growing our business may not result in revenue in the near term, we believe these investments will help us attract more agents to our platform and position us to increase our revenue over time.

Recent Events

On January 1, 2022, we completed our acquisition of Champions Real Estate Group, Champions RE Group, LLC, CREG LLC D/B/A Champions Real Estate Group, and Champions Commercial Real Estate Brokerage Firm, LLC (collectively, the “Targets”), which are U.S. based residential real estate brokerages, pursuant to the terms of that certain purchase agreement between us and Ignacio and Adriana Osorio (the “Purchase Agreement”). Pursuant to the terms of the Purchase Agreement, we purchased 100% of the limited liability company interests of the Targets for aggregate cash consideration of $9,550,000, consisting of (i) $7,162,500 in cash and (ii) a promissory note with a principal amount of $2,387,500, subject to certain adjustments set forth in the Purchase Agreement. We financed the transaction by drawing down $10 million under our New Facility, with $7,162,500 being used to finance the transaction and the remainder being used for other working capital needs. The target brokerage follows a similar model to ours and has over 1,800 agents. For a discussion of risks related to the acquisition, please refer to the section titled “Risk Factors — Risks Related to our Business and Industry.” We may evaluate acquisitions in order to accelerate growth but might not succeed in identifying suitable candidates or may acquire businesses that negatively impact us.” We will file the financial statements of the Targets and pro forma financial statements required to be filed pursuant to Rule 3-05 of Regulation S-X within 75 days of the closing of the acquisition.

COVID-19 Impact to our operations

In March 2020, the World Health Organization declared the outbreak of the COVID-19 coronavirus pandemic, which resulted in authorities implementing numerous measures to contain the virus, including quarantines, shelter-in-place orders, and business limitations and shutdowns.

90

Many governmental authorities put in place limitations on in-person activities related to the sale of residential real estate, such as prohibitions or restriction on in-home showings, inspections and appraisals, and availability or hours of local real property documentation searches and new recordings. As a result, in the second quarter of 2020, the COVID-19 pandemic significantly and adversely affected residential real estate transaction volume and new listings and home buying activity was down significantly year-over-year. Our revenue declined during this period. However, the combination of low supply and historically low interest rates allowed housing prices to remain steady.

The government prohibitions and restrictions were largely lifted in the second half of 2020 and real estate activity returned to pre-pandemic levels by the end of the third quarter of 2020. Housing prices began to rise in the second half of 2020 and continued into the first quarter of 2021. As a result, our results of operations showed no adverse impact in the third and fourth quarters of 2020 and revenue increased in fiscal year 2020 compared to 2019 and continued to increase during the nine months ended September 30, 2021.

Components of results of operations

Revenues

Real estate brokerage

We generate the majority of our revenue by assisting home sellers and buyers in listing, marketing, selling and finding homes, or leasing activities. We operate both corporate brokerages and franchised brokerages that hold the real estate brokerage license that is necessary under state laws and regulations to provide brokerage services to conduct transactions between buyers and sellers. We are the principal in the transaction and recognize revenue based on the gross commission income we expect to receive. Revenue is recognized upon the transfer of control of promised services to the home sellers or home buyers. Accordingly, real estate commissions are recorded as revenue at the point in time real estate transactions are closed (i.e., sale, purchase or leasing of a home).

Franchise

We generate revenue from franchisees through initial franchise fees, branch fees, technology fees, MLS fees and marketing and other support services fees. These fees are determined based on location and are typically made as one-time purchases by the franchisee. We also generate monthly recurring royalty revenue based on agent count and transaction count per location.

Affiliated businesses

We also recognize revenue from other affiliated business services related to the home transaction such as mortgage, title, escrow and other ancillary services. For mortgages, we generate revenue through the origination and sale of mortgage loans, including: (a) the net gain on sale of loans, which represents the premium we receive in excess of the loan principal amount and certain fees charged by investors upon sale of loans into the secondary market, (b) loan origination fees (credits), points and certain costs, and (c) the change in fair value of interest rate locks and loans held for sale. An estimate of the net gain on sale of loans is recognized at the time an interest rate lock is issued, net of a pull-through factor. Subsequent changes in the fair value of interest rate lock credits (“IRLCs”) and mortgage loans held for sale are recognized in current period earnings. When the mortgage loan is sold into the secondary market, any difference between the proceeds received and the current fair value of the loan is recognized in current period earnings.

We recognize revenue from our title and escrow affiliated business services when earned, generally at the time a real estate transaction closes. For title services, we are an agent in the transaction, whereby revenues are recognized as the net amount we earn in our performance of the service.

91

Commissions and other agent-related costs

Commissions paid to agents of our company owned brokerages are recognized concurrently with associated revenue and are presented within the Commissions and other agent-related costs expense line on our consolidated statement of operations. Fees are also paid to external brokerages for client referrals, which are recognized and paid upon the closing of a real estate transaction. We also charge our agents various fees for the services that we provide. These fees are either transaction based, where amounts are collected at the closing of a real estate transaction, or in the form of periodic fixed fees. These fees are recognized as a reduction to commissions and other related expenses.

We also incur costs related to the sale of new franchises which are also included in Commissions and other agent-related costs.

Our mortgage, title and escrow affiliated business services incur personnel-related costs, including salaries, benefits and bonuses, incurred in connection with either funding new loans or closing transactions within title and escrow. Other direct costs include title policies issued as well as other notary and recording fees. Each of these costs are also included in Commissions and other agent-related costs.

We expect our Commissions and other agent-related costs to increase in absolute dollars as our revenue continues to grow. We also expect our cost of sales to fluctuate as a percentage of revenue from period-to-period based on our revenue mix.

General and administrative

General and administrative expense consists primarily of personnel-related costs, including salaries, benefits and bonuses, and stock-based compensation for our executive management and administrative employees, including finance and accounting, legal, human resources and communications, brokerage operations, the occupancy costs for our headquarters and other office-related expenses for supporting our agents, administrative functions, professional services fees for legal and finance, insurance expenses and talent acquisition expenses.

We expect that general and administrative expenses will increase in absolute dollars and fluctuate as a percentage of revenue from period-to-period as we focus on the development of processes, systems and controls to enable our internal support functions to scale with the growth of our business. We expect to incur additional expenses as a result of operating as a public company, including expenses to comply with the rules and regulations applicable to companies listed on a national securities exchange, expenses related to compliance and reporting obligations pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) and higher expenses for directors’ and officers’ insurance, investor relations and professional services. We expect that general and administrative expenses as a percentage of revenue will decrease over the long term as we benefit from greater scale.

Sales, marketing and advertising

Sales, marketing and advertising expenses consist primarily of public relations, communications and events expenses, personnel-related costs, including salaries, benefits and bonuses, for employees supporting franchise sales, marketing, agent recruiting and retention costs, acquisitions and new office expansions, ancillary services and costs related to national referral, relocation, lead generation and call center activities. Sales, marketing and advertising expenses also include advertising expenses such as print advertising, content marketing, online and social media advertising, event marketing and promotional items, which are expensed as incurred.

We plan to continue to invest in sales, marketing, and advertising to grow our agent base, attract and retain new franchise partners and agents, increase brand awareness with home buyers and sellers, and increase our

92

revenue per side through affiliated business services. As a result, we expect that sales and marketing expenses will increase in absolute dollars as we continue to experience increased adoption of our platform, model and programs. We also expect sales and marketing expenses to fluctuate as a percentage of revenue from period-to-period in the near term as we invest in our business and decrease as a percentage of revenue over the long term as we benefit from greater scale.

Depreciation and amortization

Depreciation and amortization expense consists primarily of depreciation and amortization of our property and equipment, capitalized software and acquired intangible assets.

We expect depreciation and amortization expense will increase on an absolute dollar basis and fluctuate as a percentage of revenue from period-to-period as we continue to invest in our platform to develop new functionalities, purchase technology through acquisitions and develop our technology infrastructure. We will also continue to invest in property and equipment, including leases, to support our overall growth.

Results of operations

The results of operations presented below should be reviewed in conjunction with the consolidated financial statements and notes included elsewhere in the prospectus. The following tables set forth our results of operations for the periods presented in dollars and as a percentage of revenue.

Comparison of the nine months ended September 30, 2020 and 2021

	Nine months ended September 30,					Change 2020 vs. 2021
	2020		2021			$			%
	(in thousands, except percentages)
Revenue
Real Estate brokerage	$	266,933	$	466,843		$	199,910			75%
Franchise		3,892		5,279			1,387			36%
Affiliated business		4,250		5,571			1,321			31%
Total revenues		275,075		477,693			202,618			74%
Operating expenses
Commission and other agent-related costs		252,708		447,059			194,351			77%
General and administrative		11,565		26,524			14,959			129%
Sales, marketing and advertising		2,915		4,966			2,051			70%
Depreciation and amortization		672		1,953			1,281			191%
Total operating expenses		267,860		480,502			212,642			79%
Interest, taxes, and other		75		(462	)		(537	)		(716)%
Net income (loss)	$	7,140	$	(2,347	)	$	(9,487	)		(133)%

Revenues

Real estate brokerage

Real estate brokerage revenues increased $200 million, or 75%, for the nine months ended September 30, 2021 compared to the respective period in 2020. Of the 75% year-over-year increase in revenue, 77% or

93

$154.0 million was due to increased closed transactions, 23% or $46.0 million was due to an increase in the average home value per closed transaction. 38% or $79.2 million of overall revenue growth was attributable to revenue associated with the PalmerHouse acquisition.

Franchise

Franchise revenues increased by $1.4 million, or 36%, for the nine months ended September 30, 2021 compared to 2020. The increase was due to a $1.2 million increase from the number of transactions closed and $0.2 million was due to the increase in number of agents in 2021 as compared to 2020. Our increase in agent count was driven in part by continued geographic expansion into six new markets during 2021.

Affiliated business

Affiliated business revenues increased by $1.3 million, or 31%, for the nine months ended September 30, 2021 compared to 2020. The increase was primarily driven by a 24% increase in average revenue per closed transaction in our title subsidiaries in 2021 as compared to 2020.

Commissions and other agent-related costs

Commission and other agent-related costs increased by $194.4 million, or 77%, for the nine months ended September 30, 2021 compared to 2020. The increase was primarily driven by a higher number of closed transactions coupled with higher average home values per closing for the nine months ended September 30, 2021 as compared to 2020. The increase in commissions expense as a percentage of revenue for the nine months ended September 30, 2021 compared to 2020 was primarily due to the mix of the commission arrangements we have with our agents.

General and administrative

General and administrative expense increased by $15.0 million, or 129%, for the nine months ended September 30, 2021 compared to 2020. The increase was primarily driven by increases of $5.4 million in higher professional fees, $4.1 million in personnel-related costs, $1.9 million in rent and other office-related expenses, and $1.9 million in stock-based compensation expense as a result of our inaugural stock-based equity grant on July 1, 2021.

Sales, marketing, and advertising

Sales, marketing, and advertising expenses increased by $2.1 million, or 70%, for the nine months ended September 30, 2021 compared to 2020. The increase was primarily driven by an increase of $1.5 million in payroll-related costs and $0.6 million in stock-based compensation expense.

Depreciation and amortization

Depreciation and amortization expense increased by $1.3 million, or 191%, for nine months ended September 30, 2021 compared to 2020. The increase was primarily driven by an increase in depreciation due to increased capital expenditures as well as additional amortization costs resulting from the acquisition of PalmerHouse.

94

Comparison of the Fiscal Years Ended December 31, 2019 and 2020

	Year ended December 31,					Change 2019 vs. 2020
	2019		2020			$			%
	(in thousands, except percentages)
Revenue
Real Estate brokerage	$	315,947	$	380,890		$	64,943			21%
Franchise		4,577		5,635			1,058			23%
Affiliated business		4,081		5,981			1,900			47%
Total revenues		324,605		392,506			67,901			21%
Operating expenses
Commission and other agent-related costs		298,897		362,059			63,162			21%
General and administrative		14,783		16,576			1,793			12%
Sales, marketing and advertising		3,780		3,975			195			5%
Depreciation and amortization		665		911			246			37%
Total operating expenses		318,125		383,521			65,396			21%
Interest, taxes, and other		484		(220	)		(704	)		-145%
Net income	$	5,996	$	9,205		$	3,209			54%

Revenues

Real estate brokerage

Real estate brokerage revenues increased by $64.9 million, or 21%, for 2020 compared to 2019. Of the 21% year-over-year increase in revenue, 58%, or $38 million, was due to increased closed transactions while 42%, or $27 million, was due to an increase in the average home value per closed transaction.

Franchise

Franchise revenues increased by $1.1 million, or 23%, for 2020 compared to 2019. The increase was due to a $0.9 million increase from the number of transactions closed and $0.2 million was due to the increase in number of agents in 2020 as compared to 2019. Our increase in agent count was driven in part by continued geographic expansion into six new markets during 2020.

Affiliated business

Affiliated business revenues increased by $1.9 million, or 47%, for 2020 compared to 2019. The increase was primarily driven by a 40% increase in closed transactions in our title subsidiaries in 2020 as compared to 2019. In addition, our mortgage subsidiary had its first full year of loan origination in 2020 as compared to only two months in 2019.

Commissions and other agent-related costs

Commission and other agent-related costs increased by $63.2 million, or 21%, for 2020 compared to 2019. The increase was primarily driven by a higher number of closed transactions coupled with higher average home values per closing in 2020 as compared to 2019. The increase in commissions expense as a percentage of revenue in 2020 compared to 2019 was primarily due to the mix of the commission arrangements we have with our agents.

95

General and administrative

General and administrative expense increased by $1.8 million, or 12%, for 2020 compared to 2019. The increase was primarily driven by increases of $1.0 million in personnel-related costs, $0.4 million in higher professional fees, and $0.4 million of rent and other office-related expenses.

Sales, marketing, and advertising

Sales, marketing, and advertising expenses increased by $0.2 million, or 5%, for 2020 compared to 2019. The increase was primarily driven by an increase in agent recruitment and retention costs and communications and events expenses, which was driven by our annual growth summit event which occurs in the first quarter of the fiscal year.

Depreciation and amortization

Depreciation and amortization expense increased by $0.2 million, or 37%, for 2020 compared to 2019. The increase was primarily driven by an increase in depreciation due to the increased capital expenditures as well as amortization costs from past acquisitions.

Quarterly Results of Operations

The following table sets forth our unaudited quarterly consolidated statements of operations data for each of the quarterly periods for the year ended December 31, 2020 and the nine months ended September 30, 2021.

Quarterly Consolidated Statements of Operations

	Three months ended
	Mar. 31, 2020		Jun. 30, 2020			Sept. 30, 2020		Dec. 31, 2020			Mar. 31, 2021			Jun. 30, 2021		Sept. 30, 2021
	(In thousands)
Revenues		80,413		79,180			115,480		117,838			131,793			178,640		167,261
Operating expenses
Commission and other agent-related costs		72,692		73,303			106,713		109,849			122,085			167,354		157,621
General and administrative		3,759		3,537			4,269		4,988			7,921			8,541		10,062
Sales, marketing and advertising		976		936			1,003		981			1,517			1,332		2,116
Depreciation and amortization		212		212			249		238			634			651		669
Total operating expenses		77,639		77,988			112,234		116,056			132,157			177,878		170,468
Interest, taxes, and other		118		(51	)		7		(286	)		(421	)		208		(249	)
Net income (loss)		2,656		1,243			3,239		2,068			57			554		(2,958	)

96

Quarterly Consolidated Key Metrics

	Three months ended
	Mar. 31, 2020		Jun. 30, 2020		Sept. 30, 2020		Dec. 31, 2020		Mar. 31, 2021		Jun. 30, 2021		Sept. 30, 2021
Key Metrics
Real Estate Brokerage
Agents		10,482		10,707		10,945		11,084		13,398		13,640		13,654
Closed transaction sides		8,677		8,701		11,942		11,599		12,974		16,061		14,713
Volume (in billions)		3.17		3.21		4.70		4.77		5.18		7.12		6.67
Franchises
Agents		7,683		7,941		8,385		8,761		9,200		9,401		9,543
Closed transaction sides		7,012		7,741		11,882		11,669		9,947		13,053		12,831
Volume (in billions)		2.44		2.68		4.44		4.74		3.89		5.54		5.53
Financial Measures
Revenues (in thousands)		80,413		79,180		115,480		117,838		131,793		178,640		167,261
Gross profit (in thousands)		7,721		5,877		8,767		7,989		9,708		11,286		9,640
Gross profit %		9.6%		7.4%		7.6%		6.8%		7.4%		6.3%		5.8%
EBITDA (in thousands)		2,990		1,543		3,563		2,369		646		1,754		(2,508	)
EBITDA margin %		3.7%		1.9%		3.1%		2.0%		0.5%		1.0%		(1.5	)%

The following table provides a reconciliation of net income to EBITDA:

	Three Months Ended
	Mar. 31, 2020		Jun. 30, 2020		Sept. 30, 2020		Dec. 31, 2020		Mar. 31, 2021			Jun. 30, 2021		Sept. 30, 2021
	(in thousands, except percentages)
Net income	$	2,656	$	1,243	$	3,239	$	2,068	$	57		$	554	$	(2,958	)
Adjusted to exclude the following:
Interest expense		49		60		32		40		126			183		212
Taxes		73		28		43		23		(171	)		366		(431	)
Depreciation and amortization		212		212		249		238		634			651		669
EBITDA	$	2,990	$	1,543	$	3,563	$	2,369	$	646		$	1,754	$	(2,508	)
EBITDA margin %		3.7%		1.9%		3.1%		2.0%		0.5%			1.0%		(1.5	)%

Quarterly Trends

Revenues

Revenues increased every quarter, except for the second quarter of 2020 and the third quarter of 2021. The increases were generally driven by an increase in real estate brokerage revenues as a result of increases in the number of closed transactions combined with an increase in the average home value per closed transaction. The PalmerHouse acquisition on January 1, 2021 was also a driver of the increases in quarterly Revenues compared to 2020. The decreases in the second quarter of 2020 and third quarter of 2021 were the result of decreases in the number of closed transactions when compared to the respective prior quarter. In the second quarter of 2020, there was a slight decrease in closed transactions due to the COVID-19 pandemic, and, in the third quarter of 2021, there was a decrease in closed transactions compared to the second quarter of 2021.

97

Commissions and other agent-related costs

Commission and other agent-related costs increased for all quarters presented, except for the third quarter of 2021. The increases were primarily driven by increases in the number of closed transactions combined with increases in the average home values per closed transactions in 2021 as compared to 2020. Both increases were in part attributable to the PalmerHouse acquisition on January 1, 2021. The decrease in the third quarter of 2021 was due to a decrease in the number of closed transactions compared to the second quarter of 2021. The increase in commissions expense as a percentage of revenue in 2021 quarters compared to 2020 quarters was primarily due to the mix of the commission arrangements we have with our agents.

General and Administrative

On a quarterly basis, our General and administrative expenses increased for all quarters presented, with the exception of the second quarter of 2020. The increases were primarily due to increases in personnel-related expenses and increases in professional services fees to support the growth of our operations. General and administrative expenses as a percentage of revenue generally trended at between 4% and 6%.

Sales and Marketing

On a quarterly basis, our Sales, marketing and advertising expenses increased for all quarters presented except for the second and fourth quarter of 2020, and the second quarter of 2021. Sales, marketing and advertising expenses as a percentage of revenue have generally remained steady at 1%.

Depreciation and Amortization

On a quarterly basis, our depreciation and amortization expenses remained consistent in the four quarters of 2020. The increase in 2021 was primarily due to the increased capital expenditures as well as amortization expenses from intangible assets acquired in connection with the acquisition of PalmerHouse on January 1, 2021.

Liquidity and capital resources

Since inception, we have generated positive cash flows from operations and have primarily financed our business from our cash flows from operations. As of December 31, 2020, we had Cash and cash equivalents of $10.7 million and retained earnings of $2.4 million and as of September 30, 2021 we had Cash and cash equivalents of $9.2 million and accumulated deficit of $(11.8) million.

We expect operating income and cash flows generated from operations to continue to be re-invested in the expansion of our business. We believe our existing Cash and cash equivalents, secured credit facilities (as defined below) and available access to equity and debt financing will be sufficient to meet our working capital and capital expenditures needs for at least the next 12 months.

Our future capital requirements will depend on many factors, including, but not limited to, growth in the number of our agents and the associated costs to attract, support and retain them, our expansion into new geographic markets, future acquisitions, and the timing of investments in technology and personnel to support the overall growth in our business. To the extent that current and anticipated future sources of liquidity are insufficient to fund our future business activities and requirements, we may be required to seek additional equity or debt financing. The issuance of additional equity would result in additional dilution to our stockholders. The incurrence of debt financing would result in debt service obligations and the instruments governing such debt could provide for operating and financing covenants that would restrict our operations. There can be no assurances that we will be able to raise additional capital. In the event that additional financing

98

is required from outside sources, we may not be able to negotiate terms acceptable to us or at all. If we are unable to raise additional capital when desired, our business, financial condition and results of operations could be adversely affected.

In addition to the foregoing, based on our current assessment, we do not currently anticipate any material impact on our long-term liquidity due to the COVID-19 pandemic. However, we will continue to assess the effect of the pandemic on our operations. The extent and duration of the impact of the COVID-19 pandemic over the longer term remain uncertain and dependent on future developments that cannot be accurately predicted at this time, such as the severity and transmission rate of new COVID-19 variants, the timing, availability, and effectiveness of vaccines against new COVID-19 variants, and the impact of these and other factors on residential real estate values, real estate transaction behavior in general, and on our business in particular. A recession or long-term market correction resulting from the spread of COVID-19 could materially affect our business, financial condition and results of operations.

Cash flows

The following table summarizes our cash flows for the periods indicated:

	Year ended December 31,						Change 2019 vs. 2020				Nine months ended September 30						Change 2020 vs. 2021
	2019			2020			$		%		2020			2021			$			%
											(in thousands, except percentages)
Cash provided by operating activities	$	6,127		$	8,259		$	2,132		35%	$	8,885		$	5,248		$	(3,637)			(41)%
Cash used in investing activities		(948	)		(679	)		269		-28%		(554	)		(7,149	)		(6,595	)		1,190%
Cash (used in) provided by financing activities		(4,498	)		(2,889	)		1,609		-36%		(2,378	)		425			2,803			118%
Net change in cash	$	681		$	4,691		$	4,010		589%	$	5,953		$	(1,476	)	$	(7,429	)		(125	)%

Operating activities

For the year ended December 31, 2020, net cash provided by operating activities was $8.3 million as compared to $6.1 million in 2019 which was an increase of $2.1 million or 35% over the same period ending 2019. The variance was driven from an increase of $3.2 million in net income offset by $2.6 million of net disbursements of mortgages originated, as well as other changes in operating assets and liabilities.

For the nine months ended September 30, 2021, net cash provided by operating activities was $5.2 million as compared to $8.9 million during the same period in 2020, which was a decrease of $3.6 million or (41)%. The variance was primarily driven by a decrease of $8.8 million in earnings partially offset by $2.5 million of non-cash stock-based compensation expense as a result of our inaugural stock-based equity grant on July 1, 2021.

Investing activities

For the year ended December 31, 2020, net cash used in investing activities was $0.7 million as compared to $1.0 million in 2019 which was a decrease of $0.3 million or 28% as compared to 2019. The decrease was primarily due to acquisition related costs incurred in 2019 as part of a previous acquisition offset by notes receivable and fewer capitalized costs on internally developed software in 2020 as compared to 2019.

99

For the nine months ended September 30, 2021, net cash used in investing activities was $7.1 million as compared to $0.5 million in 2020 which was an increase of $6.6 million or 1,190% as compared to 2020. The increase was primarily due to the $6.6 million cash payment issued in connection with the PalmerHouse acquisition.

Financing activities

For the year ended December 31, 2020, net cash used in financing activities was $2.9 million as compared to $4.5 million in 2019 which was a decrease of $1.6 million or 36%. The primary decrease related to net paydowns on our secured lines of credit in the amount of $2.2 million in 2019 as compared to net draws on secured lines of credit in the amount of $0.3 million in 2020.

For the nine months ended September 30, 2021, cash provided by financing activities was $0.4 million as compared to cash used in financing activities of $2.4 million in 2020, which was an increase of $2.8 million or 118%. The increase was primarily related to net borrowings on our secured lines of credit in the amount of $1.6 million in 2020 as compared to net borrowings on secured lines of credit in the amount of $3.9 million in 2021.

Secured credit facilities and notes payable

Operating secured credit facility

In February 2017, we entered into a secured credit facility agreement for which draws may be used for acquisitions and general corporate purposes (the “Operating Secured Credit Facility Agreement”). At December 31, 2019 and 2020, the Operating Secured Credit Facility Agreement provides a maximum borrowing capacity of $10 million, maturing on September 10, 2021. Borrowings bear interest at a rate equal to the London interbank offered rate (“LIBOR”), plus an applicable margin. The effective interest rate of the Operating Secured Credit Facility was 4.61% and 3.85% at December 31, 2019 and 2020, respectively. At December 31, 2019 and 2020, we had $3.2 million and $1.1 million, respectively, of borrowings outstanding and $6.8 million and $8.8 million, respectively, of additional borrowing capacity under our Operating Secured Credit Facility Agreement.

In September 2021, concurrently with entering into a New Facility, we repaid in full our outstanding balance under our Operating Secured Credit Facility Agreement. Upon the payment of approximately $6.7 million, all commitments under the agreement were terminated, and the lender discharged and released all guarantees and liens existing in connection with such loan, thereby terminating such loan agreement schedule.

Mortgage secured credit facility

In December 2019, we entered into a secured credit facility agreement (the “Mortgage Secured Credit Facility Agreement”) which is used exclusively to fund originated mortgages which are subsequently resold to designated investors. At December 31, 2020 the Mortgage Secured Credit Facility Agreement provides a maximum borrowing capacity of $5.0 million. Borrowings for an originated mortgage bear interest at a rate equal to LIBOR plus an applicable escalating margin ranging from 0% to 10.0%, or 11.5% whichever is greater, depending on the length outstanding for the applicable draw. The terms of the Mortgage Secured Credit Facility require the borrowings associated with each mortgage to be repaid upon the sale of the mortgage to a third party. We may repay the respective borrowings in whole or in part at any time. The interest rate in effect at both December 31, 2019 and 2020 was 4.5%. The interest rate in effect at September 30, 2021 was 4.5%. At September 30, 2021, we had approximately $1.0 million of borrowings outstanding and $4.0 million of additional borrowing capacity under our Mortgage Secured Credit Facility Agreement.

100

New Secured Credit Facility

In September 2021, we entered into a new secured credit facility agreement (the “New Facility”) with JPMorgan Chase Bank, N.A., which is affiliated with one of our underwriters for this offering, to replace the preexisting Operating Secured Credit Facility. The New Facility may be used to fund acquisitions and general corporate expenditures, with a maximum borrowing capacity of $24.5 million. Borrowings bear interest at a rate equal to LIBOR plus an applicable margin, which will equal 2.25% or 1.25% depending on the type of loan. We have the right to prepay any borrowing in whole or in part at any time. The New Facility matures in September 2022. At September 30, 2021, we had $6.5 million outstanding under the New Facility, representing amounts transferred over from the preexisting Operating Credit Secured Credit Facility, which was closed the same day the New Facility was opened.

Notes payable

Historically, we have issued notes payable in connection with acquisitions. These notes are typically issued with a 5 year term and a fully amortized payoff schedule. As of December 31, 2019 and 2020, the outstanding balance was $1.8 million and $0.7 million, respectively, accruing interest at 5.0% per annum. On January 1, 2021, we issued a five year $6.3 million note with a non-compounded interest rate of LIBOR plus 3.0% per annum, in connection with the PalmerHouse acquisition, maturing in April 2026. As of September 30, 2021, the outstanding balance of notes payable related to prior acquisitions was $6.0 million.

Off-balance sheet arrangements

We administer escrow and trust deposits which represent earnest money deposits by the end consumer and are undistributed amounts for the settlement of real estate transactions yet to close as per the date of our fiscal year end. We are contingently liable for these escrow and trust deposits which totaled $4.9 million and $8.2 million as of December 31, 2019 and 2020, respectively. We are contingently liable for these escrow and trust deposits which totaled $10.5 million at September 30, 2021. We did not have any other off-balance sheet arrangements as of or during the periods presented.

Quantitative and qualitative disclosures about market risk

Market risk represents the risk of loss that may impact our financial position because of adverse changes in financial market prices and rates. Our market risk exposure is primarily a result of exposure resulting from potential changes in interest rates or inflation.

Interest rate risk

Our cash and cash equivalents as of September 30, 2021 consisted of $9.2 million in cash and money market funds. Certain of our cash and cash equivalents are interest-earning instruments that carry a degree of interest rate risk. The goals of our investment policy are liquidity and capital preservation. We do not enter into investments for trading or speculative purposes and have not used any derivative financial instruments to manage our interest rate exposure. We believe that we do not have any material exposure to changes in the fair value of these assets as a result of changes in interest rates due to the short-term nature of our cash and cash equivalents.

We are also subjected to interest rate exposure on LIBOR-based interest rates on our New Facility. Interest rate risk is highly sensitive due to many factors, including U.S. monetary and tax policies, U.S. and international economic factors and other factors beyond our control. Our Secured Credit Facility bears interest equal to the adjusted LIBOR rate plus an applicable margin or an alternate rate of interest upon the occurrence of certain changes in LIBOR. As of September 30, 2021, we had a total outstanding balance of $6.5 million. Based on the amounts outstanding, a 100 basis point increase or decrease in market interest rates over a twelve month period would not result in a material change to our interest expense.

101

Inflation risk

We do not believe that inflation has had a material effect on our business, financial condition or results of operations. If our costs become subject to significant inflationary pressures, we may not be able to fully offset such higher costs with increased revenue. Our inability or failure to do so could harm our business, financial condition, and results of operations.

Critical accounting policies and estimates

Our discussion and analysis of financial condition results of operations are based upon our consolidated financial statements included elsewhere in this prospectus. The preparation of our consolidated financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses. We base our estimates on past experience and other assumptions that we believe are reasonable under the circumstances, and we evaluate these estimates on an ongoing basis. Actual results may differ from those estimates.

Our critical accounting policies are those that materially affect our consolidated financial statements and involve difficult, subjective or complex judgments by management. A thorough understanding of these critical accounting policies is essential when reviewing our consolidated financial statements. We believe that the critical accounting policies listed below are the most difficult management decisions as they involve the use of significant estimates and assumptions as described above.

See Note 2 to our consolidated financial statements included elsewhere in this prospectus for more information.

Revenue recognition

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). We adopted the new revenue standard on January 1, 2018, using the modified retrospective transition method. The adoption of this guidance did not have a material impact on our financial position, results of operations or cash flows.

We primarily generate revenue from three business segments: Real estate brokerage, Franchise, and Affiliated business services. Multiple revenue streams are generated through company-owned brokerages, franchises, and through our mortgage and title companies. Real estate brokerage revenue is earned by charging commissions upon the closing of a real estate transaction or the execution of a lease when we provide brokerage services to one or multiple of the parties involved. Additionally, we earn revenues from franchise royalties, as well as transaction-based fees from the mortgage, title, escrow and other ancillary services it provides to consumers. Our revenue recognition policies are discussed further below by business segment:

Real estate brokerage

As an owner-operator of real estate brokerages, we assist home buyers and sellers in listing, marketing, selling and finding homes. Real estate commissions earned by our real estate brokerage business are recorded as revenue at the closing of a real estate transaction (i.e., purchase or sale of a home, execution of a lease). These revenues are referred to as real estate brokerage revenue. The commissions we pay to real estate agents are recognized concurrently with the associated revenues and presented in the real estate brokerage line item on the accompanying Combined Statements of Income.

102

In such real estate transactions, we hold the real estate brokerage license that is necessary under relevant state laws and regulations to provide brokerage services and, therefore, control those services that are necessary to legally transfer real estate between home buyers and sellers. Although our agents are independent contractors, they cannot execute a real estate transaction without a brokerage license, which we possess. We have the only contractual relationship for the sale or exchange of real estate with its customer (i.e., the home buyer or seller). Accordingly, we are the principal in our transactions with both home buyers and sellers; or lessees and lessors in the case of an execution of a lease.

As principal, we recognize revenue in the gross amount of consideration we expect to receive in exchange for those services, which is determined based on the sales price multiplied by the commission rate as agreed upon in the respective independent contractor agreement between each agent and us.

Franchise

We franchise our real estate brands to real estate brokerage businesses that are independently owned and operated. Franchise revenue principally consists of royalty and marketing fees earned from our franchisees.

The franchise arrangement requires us to perform various upfront activities to support the brand such as training, pre-opening assistance, and access to our technology platform. These upfront services are highly interrelated with the franchise right as they do not provide a substantive service to the customer on their own. Together, the upfront services and franchise right represent a series of distinct daily services rendered over time. Consistent with the transfer of control for distinct, daily services to the customer, franchise fee revenue from the sale of individual franchises and fees for new branch locations are deferred and recognized over the term of the individual franchise agreement, 5 or 10 years, on a straight-line basis. The franchise deferred revenues are presented in other current and non-current liabilities.

The royalty received is primarily based on the franchisee’s agent count and the number of real estate transactions closed in a month. Royalty fees are accrued as the underlying franchisee revenue is earned (typically upon close of the real estate transaction).

We also earn marketing fees on a monthly basis from our franchisees. Such fees are utilized to fund ongoing marketing campaigns on behalf of our franchisees and are recognized as franchise revenue in the month earned. In addition, we recognize a deferred asset for commissions paid for the sale of a new franchise as these are considered costs of obtaining a contract with a customer that are expected to provide benefits to us for longer than one year. We classify capitalized commissions as current or non-current assets in the Combined Balance Sheets based on the expected timing of recognition of the expense. The amount of commissions is a flat rate for each location and is amortized over a period of five years. The amount of capitalized commissions was $0.6 million as of September 30, 2021.

Affiliated business services

We provide mortgage, title, escrow and other ancillary services to the consumer. Revenues for mortgage services are recorded as earned, generally at the time a real estate transaction is closed. We also began originating mortgage loans in April 2020, which we in turn intend to sell in a short period of time after issuance. Upon sale of a mortgage loan into the secondary mortgage market, any difference between the proceeds received and the current fair value of the loan is recognized in the Affiliated business services revenue line item on the Combined Statements of Operations. We also enter into IRLCs with customers at the beginning of the lending process. Any gain (loss) on IRLCs is recognized in current period earnings. Mortgage loans held for sale are typically sold within 30 days after loan issuance.

103

Title and escrow revenues within our affiliated business services are recorded as earned, generally at the time a real estate transaction closes. For title services, we act as an agent for insurance policy underwriter by performing title related services on their behalf. The insurance policy underwriter is the primary obligor for the policy. Accordingly, we recognize revenue solely based on the net amount we earn for our performance of the title related services, as opposed to the gross amount of the title insurance transaction. For escrow services, our primary responsibilities are to administer funds and enforce the terms of the escrow agreement. In this capacity, we are an agent in our promise to perform the services for the real estate broker, who is the principal and primary obligor. Accordingly, we recognize escrow services revenue upon performance of the services, in the amount contractually agreed upon with the broker.

Commission and other related costs

We pay commissions to agents of our owned brokerages for which the associated costs are recognized concurrently with the associated revenue and are recorded within the Commission and other agent-related costs line item on the Combined Statements of Operations. Additionally, we pay fees to external brokerages for client referrals, which are recognized and paid upon the closing of a real estate transaction, and we charge our agents various fees for the services we provide. These fees are either transaction based, where amounts are collected at the closing of a brokerage transaction, or in the form of periodic fixed fees over a defined period of time. Fees charged to affiliated agents are recognized as a reduction to Commission and other agent-related costs as the reimbursements do not constitute a form of revenue nor do they constitute a reimbursement for a specific, incremental, identifiable cost for us.

We also incur costs related to the sale of new franchises which are included in the Commission and other agent-related costs on the Combined Statements of Operations.

The mortgage, title and escrow Affiliated business incurs personnel-related costs, including salaries, benefits and bonuses, incurred in connection with either funding new loans or closing transactions within title and escrow. Other direct costs include title policies issued as well as other notary and recording fees. The net amount of these costs is also included in Commission and other agent-related costs on the Combined Statements of Operations.

Mortgage loans held for sale

We have elected the fair value option for accounting for mortgage loans held for sale with unrealized gains and losses included in Affiliated business services revenue in the Combined Statements of Income. Mortgage loans held for sale are loans originated as held for sale, that are expected to be sold into the secondary mortgage market.

Goodwill, Intangible assets and other long-lived assets

Goodwill represents the excess of acquisition costs over the fair value of the net tangible assets and identifiable intangible assets acquired in a business combination. Goodwill is not amortized but is subject to impairment testing. The aggregate carrying value of our goodwill was $5.2 million at December 31, 2019 and 2020, respectively, and is subject to an impairment assessment annually as of October 1, or whenever events or changes in circumstances indicate that the carrying amount may not be fully recoverable. As part of the annual goodwill impairment test, we first perform a qualitative assessment to determine whether further impairment testing is necessary. If, as a result of the qualitative assessment, it is more likely than not that the fair value of the reporting unit is less than its carrying amount, the quantitative impairment test will be required. If we have determined it necessary to perform a quantitative impairment assessment, we will compare the fair value of the reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, limited to the total amount of goodwill of the reporting unit. We did not recognize any goodwill impairment charges for any of the periods presented.

104

Intangible assets are carried at cost, net of accumulated amortization. Intangible assets are amortized on a straight-line basis over their estimated useful lives. We estimate the useful life by estimating the expected period of economic benefit. Intangible assets consist of agent relationships, pending sales and listings and trade names acquired through historical acquisitions. The estimated useful life of our intangible assets ranges from one to five years. We performed an evaluation for impairment and determined there was no impairment as of September 30, 2021.

We evaluate long-lived assets, which include depreciable intangible and tangible assets, for impairment whenever events or changes in circumstances indicate that the carrying value of long-lived assets may not be recoverable. The recoverability of these assets is measured by comparing the carrying amounts to the future undiscounted cash flows these assets are expected to generate. We recognize an impairment in the event the carrying amount of such assets exceeds the fair value attributable to such assets. There were no events or changes in circumstances that indicated the long-lived assets were impaired during any of the periods presented.

Stock-based Compensation

In June 2021, we adopted the 2021 Equity Incentive Plan. The 2021 Equity Incentive Plan is a broad-based retention program and is intended to attract and retain talented employees, directors, and nonemployee consultants. Under the 2021 Equity Incentive Plan, employees and non-employees can be granted options on common stock, restricted stock, restricted stock units (“RSUs”), and stock appreciation rights (“SARs”). Incentive stock options may be granted to employees. All other awards, including non-statutory stock options, under the 2021 Equity Incentive may be granted to employees, directors, and consultants. The exercise price shall be no less than 100% of the fair market value of such shares on the date of grant. In addition, in cases where an incentive stock option is granted to an employee who owns stock representing more than 10% of the voting power of all classes of stock of the Company and/or parent or subsidiary, the per share exercise price will be no less than 110% of the fair market value of such shares on the date of grant. Generally, these awards are based on stock agreements with ten-year contractional terms subject to board approval.

The fair values of the SARs are estimated on the date of grant using the Black-Scholes option valuation model. As there is no public market for its common stock, we determined the volatility for awards granted based on an analysis of reported equity data for a group of guideline companies. The expected volatility has been determined using the leverage adjusted weighted-average of the historical equity volatility of this group of guideline companies. We expect to continue to do so until such time as we have adequate historical data regarding the volatility of our own traded stock price. The expected term of our SARs has been determined utilizing the SEC “simplified” method for awards that qualify as “plain-vanilla.” The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. We have not paid, and do not anticipate paying, cash dividends on our common stock; therefore, the expected dividend yield is assumed to be zero.

As of September 30, 2021, there were 2,140,360 shares of common stock authorized for issuance under the 2021 Equity Incentive Plan and 223,010 shares available for future grants. See Note 10 to our audited consolidated financial statements included elsewhere in this prospectus for further detail.

Recent accounting pronouncements

See Note 2 to our audited consolidated financial statements included elsewhere in this prospectus for a description of recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted.

105

Internal control over financial reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP. As a result of becoming a public company, we will be required, pursuant to Section 404 of SOX, as amended, to furnish a report by our management on, among other things, the effectiveness of our ICFR for the first fiscal year beginning after the effective date of the registration statement of which this prospectus is a part or the date we are no longer an “emerging growth company” (“EGC”) as defined in the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”), if we take advantage (as we expect to do) of the exemptions for EGCs contained in the JOBS Act. This assessment will need to include disclosures of any material weaknesses identified by our management in our internal control over financial reporting.

We and our independent registered public accounting firm were not required to, and did not, perform an extensive evaluation of our ICFR as of December 31, 2020 or any prior period in accordance with the provisions of SOX. Accordingly, we cannot assure you that we have identified all, or that we will not in the future have additional, material weaknesses. Material weaknesses may still exist when we report on the effectiveness of our internal control over financial reporting as required under SOX after the completion of this offering.

While preparing the consolidated financial statements that are included in this prospectus, our management has determined that we have material weaknesses in our internal control over financial reporting. The identified material weaknesses were associated with the following areas:

• Insufficient and appropriate controls were not established associated with the recording of journal entries;

• Ineffective controls established to ensure proper reconciliations between our transaction management platform and our general ledger which affected the completeness and accuracy of our revenue recognition and commission and other agent related costs; and

• Inadequate establishment of a compliant SOX control environment including items such as instituting formal and written accounting policies consistent with GAAP, having documented internal controls which are also associated with control owners, and having a sufficient number of employees with experience establishing and maintaining an effective internal control over financial reporting environment.

We are establishing plans and working to remediate the material weaknesses identified above including taking the following actions:

• Contract with SOX consultants as well as establish an internal audit team;

• Perform an enterprise-wide SOX environment scoping analysis as well as develop an implementation plan;

• Hire additional personnel within the financial reporting team who have prior experience establishing, maintaining, and working within SOX environments;

• Create policies and procedures regarding the creation and oversight of journal entries as well as implement systematic restrictions following appropriate segregation of duties methodologies;

• Establish controls ensuring appropriate GAAP is identified and applied to new or modified revenue transaction streams; and

• Institute regular and recurring detailed reconciliations between our transaction management systems and our general ledger.

106

The actions that we are taking are subject to ongoing executive management review and will also be subject to audit committee oversight. If we are unable to successfully remediate the material weaknesses, or if in the future, we identify further material weaknesses in our internal control over financial reporting, we may not detect errors on a timely basis and our financial statements may be materially misstated.

107

Letter from Matthew Widdows, Founder and Chief Executive Officer

When I entered the real estate industry over 30 years ago, I knew early on that there had to be a better way to conduct a real estate transaction. From new home sales to resale, I was quickly frustrated with outdated technology, aging and bloated brokerage models, and antiquated processes. I founded HomeSmart to improve the real estate experience, and at HomeSmart we strive every day to empower brokerages, franchisees, agents and consumers to conduct real estate transactions in a smarter way. We believe that HomeSmart is revolutionizing the real estate transaction through technology, scale, and service.

A smarter way

The market for residential real estate transactions and home-related services is highly fragmented, local, and complex. The acceptance of these challenges starts at the brokerage and flows through the entire transaction. The industry is full of various technologies, models, and ways of doing business, but at the core, we’re all here to accomplish the same thing. We are here to help people make one of the most important investments of their lives, finding a place to call home.

The home selling and buying process is emotional, stressful, and opaque. By adding transparency to the process, we remove the unknown and therefore decrease the stress. The real estate transaction process doesn’t have to be the most difficult, stressful moment of someone’s life. The process of buying a home can and should be rewarding, exciting and leave buyers and sellers feeling accomplished.

Our future

Over the next few years, we believe that our organization will grow through agent and transaction count, and the development of market adjacencies, i.e., title, mortgage, and other concierge services. We intend to achieve these objectives through a strategy of organic growth, geographical expansion and synergistic acquisitions. I will continue to lead the design of our proprietary technology with a focus on creating transparency for the consumer and streamlining the entire real estate process. Longer-term, I see HomeSmart broadening our offerings to be inclusive of everything people need to conduct a real estate transaction. We believe HomeSmart will be the center of the transaction, ensuring the highest level of service at every encounter.

Service has always been a critical factor in our decision-making. We have developed our technology, business processes, metrics, and reputation to empower our team to deliver the highest possible service level with a human touch. In doing so, we have been able to scale the organization effectively and efficiently.    We have seen steady yet significant growth in both our revenue and EBITDA. We have driven aggressive top-line increases and developed proprietary technology, all while generating a profit through fiscal responsibility and our elimination of wasteful spending. As an organization, we don’t just throw money at a problem. We try to think outside the box to solve that problem in a fiscally responsible manner.

Fiscal responsibility

HomeSmart approaches its business in a fiscally responsible manner. We have historically generated positive cash flows, allowing us to invest in the business continually while realizing annual profits. The real estate market is seeing record results, and we believe this will continue in the near term. Beyond that, even if a slowdown occurs, we believe that we are well-positioned to capture more market share due to our business model and technology advantage.

HomeSmart is truly an end-to-end platform designed to increase the productivity of brokerage staff, real estate professionals, and ultimately consumers, resulting in lower corporate overhead. We’ve created a unique

108

position amongst our peers as we’re fully tech-enabled, agent-centric, and scalable while delivering service, training, branding, and more. We do this primarily on a transaction fee basis, keeping the cost low for franchisees and agents alike.

The future is bright for HomeSmart and real estate. We understand there will be new entrants to the industry, and we are operationally and technically positioned to compete and win. Outside capital combined with our economically conscious approach will allow us to execute our strategy at a more rapid pace and magnitude, so that we can fulfill our vision to revolutionize the real estate industry through technology, scale and service.

Who we are and how we operate

The culture of HomeSmart is foundational to our success. We work hard, and we’re committed to excellence. We also care for one another as individuals. We connect, we support, we coach, and we build each other up. Our culture is tangible. You feel it when you walk into our offices, and our franchisees and agents are an extension of it. We understand and appreciate the uniqueness an individual brings to the HomeSmart brand. It’s a place where people can be who they indeed are, and ideas are encouraged. We challenge everything, and it’s from those challenges that we achieve greatness.

To ensure the success and sustainability of HomeSmart, our employees, franchisees, agents, and clients, we have continuously operated under a robust strategic process. This philosophy fosters collaboration and commitment to our annual initiatives and goals. Our executive team meets regularly to assess progress toward goals and projects and adjusts as necessary. We review performance to plan in real time as a matter of daily cadence, and individuals understand how they impact the organization.

In closing

We strive for excellence every day. Our network of franchisees, agents, and consumers is why we do what we do. Our team members are the foundation of this success. We wouldn’t be here without them.

We set ridiculous expectations and we find a way to make those expectations normal. In simple terms, we set goals, build a plan and we execute. This mantra has become the fiber of our organization. It’s what has brought us to our current level of accomplishments and it will drive us to success for years to come.

I look forward to the continued growth of the organization. I thank every person who has helped make HomeSmart what it is today. I look forward to welcoming the investor community into the HomeSmart family.

Sincerely,

/s/ Matthew Widdows

Matthew Widdows

109

Business

Mission statement

Our mission is to revolutionize the real estate transaction through technology, scale, and service. By positioning ourselves at the center of the real estate process, we have created an ecosystem that empowers brokerages, franchisees, agents and consumers to conduct real estate transactions in a smarter and more efficient way.

Opportunity

For the majority of consumers, buying and selling their home is the single most important, expensive, and long-term purchase they will ever make. The real estate industry is massive in size and, due to the recent COVID-19 pandemic, has experienced a renewed growth since our homes have become our primary places to live, learn, work and relax. The problems are:

• The real estate industry is antiquated and dominated by legacy players who have focused on technologies, solutions and business models that have become outdated.

• The real estate transaction is fragmented and complex, spread across multiple sub-industries and organizations, including real estate brokerage, mortgage, title and escrow, and is still primarily a paper driven, manual process, which creates confusion and a poor experience for agents, brokerages and consumers.

• The real estate transaction lacks transparency, especially for consumers.

• There is continued downward pressure on agent commissions and an increased need for technology to help streamline the process while keeping agents’ costs low.

• There is a lot of irresponsible spending within the industry on acquisition of agents and technology, as well as wasteful and inefficient operations due to redundancies and lack of automation.

Through technology, scale and service, and a model focused on the agent, we believe we are well positioned to disrupt this market.

Business overview

HomeSmart is a revolutionary real estate enterprise powered by our proprietary end-to-end technology platform. We provide integrated real estate solutions to agents, brokerages, franchisees and, ultimately, the consumer. Our cloud-based platform empowers our users to succeed by providing a full suite of technology offerings covering nearly every aspect of the real estate transaction. The drive towards a seamless home buying and selling experience is the catalyst for our growth. Technology and automation are at the core of our DNA—grounded in fiscal responsibility and operational excellence. We have been developing our software in-house over the last 20 years and have a 100% adoption rate across our agents. All of our franchisees and agents are automatically added as users to and all transactions are processed through our technology platform. Our technology platform is focused on scalability and automation to drive transaction velocity, volume, and operating leverage for our brokers, franchisees, agents and consumers. Our business model has fueled our expansion, and as of September 30, 2021, we have over 23,000 agents across 194 offices in 47 states. According to RISMedia, HomeSmart was ranked in the top five residential real estate brokerages by number of transaction sides in the United States in 2020.

The market for residential real estate transactions and home-related services is highly fragmented, local and complex. Real estate agents generally operate in local markets as independent contractors and typically move from brokerage to brokerage, across disparate external systems and databases, and use a multitude of services to close a single transaction. To use these services, agents are charged numerous fees and are subject to high

110

commission splits, which may ultimately get passed on to the consumer. Operating profitability of agents is further reduced by ongoing competitive dynamics that allow consumers to push agents for lower commissions on transactions. According to the National Association of REALTORS^® (“NAR”), 75% of all agents in the United States are being charged traditional commission splits by their brokerage that typically range from 16% to 39% and can be more, demonstrating there is a clear void in cost-effective and scalable solutions available to agents.

We have built a cost-effective, agent-centric real estate business model powered by our cloud-based, end-to-end platform for the residential real estate transaction. Our business model and platform empower brokers, franchisees and agents to provide a seamless transaction process for consumers, while offering a flat transaction fee for franchisees and agents. Our RealSmart technology suite includes RealSmart Broker—brokerage and agent management; RealSmart Agent—business and transaction management; and RealSmart Client—buying and selling transaction management; through which franchisees, agents and consumers are connected in order to conduct all aspects of the real estate process. We believe our technology delivers a full end-to-end experience for the consumer, including virtual tours, marketing, document management, process (sale, purchase, mortgage, title and escrow) tracking, education and training, listing management and more. Additionally, our RealSmart platform allows data to be aggregated for accurate insights, decision making, real-time reporting, business management and transparency for the consumer. We have used the power of our technology, the structure of our fees and our dedicated customer service team to create a technology-enabled model that drives the success of real estate professionals.

We believe we offer the real estate model of the future and have developed a platform that can be utilized by all agents. We offer flexibility for agents, allowing them to choose the commission plan, business building SmartTools and resources to best meet their current business needs, while also providing them with access to world-class technology to run their business and manage their transactions autonomously and remotely. We are positioned to attract and retain agents across all levels of productivity. Our business model, based predominantly on flat transaction and subscription fees, has demonstrated over 20 years of continued agent attraction. As a result, we have an industry leading agent Net Promoter Score of over 90, which reflects our strong culture of productivity and performance across our agents.

We pride ourselves on a culture of innovation, collaboration and community. As of September 30, 2021, we had 268 employees across our business units, who support our vast network of agents across the United States. This relatively small but highly efficient team of associates continuously innovates and enhances our software platform with the goal of digitizing and automating real estate workflows that empower key stakeholders in a tech-enabled real estate ecosystem. We believe our commitment to the continued development of our technology enables us to drive significant operating efficiencies at a high level of service. Through economies of

111

scale, as of October 2020, we are able to outperform our competition with the ability to serve 92% more agents per employee and oversee and administer 46% more transaction sides per employee than our nearest competitor according to RealTrends. This type of fiscal aptitude and responsibility is part of the fiber of HomeSmart, always focusing on eliminating waste while improving service.

We primarily generate revenue from our three key business segments: Real Estate Brokerage, Franchise, and Affiliated Business Services. Our revenue streams are generated through our corporate owned brokerages, our franchises, and our wholly owned mortgage and title companies. We generate the majority of our revenues from the real estate transactions executed by our corporate real estate brokerage where our agents represent consumers buying or selling homes. Additionally, we earn revenues from franchise royalties, as well as transaction-based fees from affiliated business services. These services are a result of our recent expansion to providing mortgages and title insurance services to our agents and consumers.

We have achieved significant growth and scale since inception. In 2019 and 2020, we generated revenue of $325 million and $393 million, respectively, representing 21% year-over-year growth. In the same periods, we had gross profit of $26 million and $30 million, respectively, representing 18% year-over-year growth. In 2019 and 2020, we had net income of $6.0 million and $9.2 million, respectively, and EBITDA of $7.1 million and $10.5 million, respectively. For more information about gross profit, EBITDA and a reconciliation of EBITDA to net loss, the most directly comparable financial measure calculated in accordance with GAAP, see the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Business and Non-GAAP Metrics.”

Industry overview and trends

The process of conducting a real estate transaction is complex and largely manual, and is focused in three areas: brokerage, title and escrow and mortgage. Many of the back-end processes needed to close transactions are routine, impersonal and unclear, and are driven by a multitude of local third parties who have operated for years within legacy structures. These processes are often dictated by local regulations and ordinances, complexities across city and state authorities, and local real estate customs and norms unfamiliar to the typical end consumer. These processes range from financial analysis to inspection to legal review across diligence, negotiation, finance, and close, and involve managing workflows with appraisers, contractors, banks, lawyers, title officers, insurance companies, and government authorities. Managing these processes and successfully guiding consumers across various workflows is key to providing a seamless transaction. Consumers will purchase or sell a home a few times over their lifetime and quite often, a real estate purchase is the single largest investment an individual makes. Professional guidance is key to completing a successful transaction.

112

The complexity around real estate transactions is compounded by shifts in buyer and seller preferences and emerging technologies. The real estate industry has historically lagged behind other industries in technological innovation. Although some progress has been made to address pain points that currently exist, many solutions fall short or operate as point solutions with a lack of integration across the residential real estate ecosystem. Oftentimes these point solutions are difficult to use with limited ability to support and upgrade the product or make it available in an omni-channel context (i.e. mobile, web, app, etc.). Many companies have tried to build solutions to displace the agent, rather than empower them. Consumers want deep engagement with an agent during a sale or purchase process. In fact, nearly 90% of sellers and buyers in the United States work with real estate agents, according to the NAR, despite the agentless models available today. Agents have been largely underserved by industry innovation despite the critical role they occupy at the center of the real estate transaction, driving positive experiences for both buyers and sellers.

There are multiple trends driving these changes in the real estate industry:

• High commission & customer acquisition costs.    With 75% of all real estate agents in the United States being charged traditional commission splits by their brokerage that range from 16% to 39% there is a strong need for more cost-effective, scalable solutions. Agents are also burdened by high customer acquisition costs, while the national average combined commission for buying and selling agents has declined from 5.25% in 2015 to 5.03% in 2018 and 4.94% in 2020.

• Manual, time-consuming processes.    Real estate is a market that is ripe for technological disruption. A typical day in the life of a real estate agent is mostly spent completing, submitting and filing real estate documents, coordinating appointments, showings, open houses and meetings, creating budgets for monthly, quarterly and annual operations, maintaining and managing client databases and emails. These repetitive, rule-based processes are ripe for automation vis-à-vis the use of modern technology.

• Disparate point solutions.    Even where agents seek technology solutions to manual, time-consuming processes, the overwhelming majority of residential real estate technologies are disparate point solutions. These varying point solutions require agents to allocate significant time and resources to make sense of, and use, fragmented technology tools. This results in time spent away from serving clients, because agents are burdened with administrative tasks instead of focusing on lead generation and customer success.