The Corcoran Group has pulled the plug on its largest franchise, after a legal dispute and various allegations of fraud and unpaid commissions at the Southern California-based franchisee.
Corcoran, itself a subsidiary of Anywhere Real Estate, will end its relationship with Corcoran Global Living’s Southern California division by year-end, according to a memo sent by Corcoran Global Living CEO Michael Mahon to employees and agents that was obtained by Inman.
“I share this information with a heavy heart, as this is not the vision any of us had for our future as Corcoran Global Living,” Mahon said in the memo. “Our prayers and thoughts are with you for your continued success in the future.” Mahon confirmed that the Southern California affiliate would cease all operations and close all offices; at the start of the year, Corcoran Global Living said it had nearly 2,600 agents across 70 offices, and gross annual sales of $10 billion. At the moment, its website shows about half that number of agents and the Southern California offices are no longer listed.
Corcoran declined to comment to Inman, while the affiliate didn’t respond to its requests for comment. It’s unclear if Corcoran will take any action at Corcoran Global Living’s other regions of Northern California, Nevada and Ohio, though maintaining the status quo seems unlikely.
Corcoran Global Living was embroiled in controversy, and was facing lawsuits from a number of brokers alleging fraud, breach of contract and hundreds of thousands of dollars in unpaid commissions. The brokers claimed that Mahon had misstated the company’s financial situation, commingled funds for Southern and Northern California offices and diverted money to himself and his associates.
Meanwhile, Mahon had sued Corcoran, alleging that it had provided faulty transaction reporting technology that cost the affiliate hundreds of thousands of dollars. Corcoran countersued, dismissing Mahon’s suit as a “smokescreen” to distract from Mahon’s multiple legal troubles.
In the memo, Mahon said that agents could transfer any in-contract listings to their new brokerage, “provided a written referral agreement is fully executed requiring a referral fee equal to the broker company dollar (company’s portion of commission due) within 48 hours of the licensee transfer.”
The Real Deal reported in November that Corcoran was searching for a new owner for Corcoran Global Living, which was founded in early 2020, and would consider a direct deal if an outside buyer could not be found.
Anywhere sees franchising as a key long-term profit driver, given its higher margins. In 2018, it decided to franchise the Corcoran brand. At the time, TRD reported that Corcoran CEO Pam Liebman would oversee the franchises.
“I will be very selective about who we bring in,” Liebman said at the time.
Anywhere’s stock is down about 56 percent this year, as it and other brokerages grapple with a slowing housing market and high interest rates after a record 2021. Last week, TRD reported that Ryan Gorman, the CEO of Anywhere subsidiary Coldwell Banker, was leaving the company.