Realogy is chasing more growth.
The conglomerate — which includes Corcoran Group, Citi Habitats, Sotheby’s International Realty and Coldwell Banker — is ramping up recruiting efforts and plans to launch at least one new franchise brand next year. The change comes as the company had vowed to become a “recruiting machine” — and amid the challenging backdrop of a housing inventory shortage.
“We are not satisfied with NRT’s recent direct financial results,” CEO Ryan Schneider said on an earnings call Friday. Realogy needs to expand the “base of productive agents” more than it has in the past, he said.
Realogy’s revenue in the second quarter rose 2 percent, year over year, to $1.82 billion. Net income was $123 million compared with $109 million in the second quarter of 2017. The company’s overall homesale transaction volume climbed 3 percent compared to a year earlier. That was due to a 4 percent volume gain at RFG and a 1 percent gain at NRT. NRT reported an average home sale price increase of 2 percent.
The growth effort, in part, entails simplifying and standardizing how agent commissions work, understanding that it varies by market, he said. Complicated and inconsistent plans can be difficult to convey to agents — and the company is in the process of testing changes, he added. Realogy will also charge fees to agents for using certain new tools, partly to offset costs.
“Most agents are used to being charged for a lot of things,” Schneider said. The company’s “Listing Concierge” service is an example of its approach. Agents can pay per listing to have Realogy provide “white-glove” marketing for a property, including aerial photography and targeted social media.
At the same time, Realogy plans to launch at least one new franchise brand next year. Without getting into specifics ahead of an official rollout, the chief executive said there are several niches in the market that have been underserved generally and by Realogy. Expanding the franchise business aims to take advantage of that.
Schneider has previously spoken about operating in an intensely competitive environment and again echoed that sentiment — which is underscores the need for effective recruiting. But as it expands, the company isn’t seeking out opportunities for mergers and acquisitions like some of its chief rivals.
Separate from its expansion efforts, Realogy also has a deal with Zillow Group for its Premier Agent service, The Real Deal previously reported. Under the arrangement, Zillow notifies its agents when a buyer contacts a Premier Agent about one of their listings. The email discloses the name of the Premier Agent that was contacted, and provides an email link for the listing agent to contact the buyer directly.