Realogy expects the housing market’s hot streak to continue and plans on rapidly expanding its iBuying program to capitalize on it.
The brokerage giant reported $2.2 billion in revenue in the third quarter — a 15 percent increase compared to the same period last year — as the housing market heated up amid eased pandemic restrictions. The company’s net income was $114 million, up $16 million from the previous year, according to its Thursday earnings report.
Closed transaction volume increased 12 percent year-over-year, marking the fifth consecutive quarter the company reported a gain.
Last month, Realogy paid down $435 million in debt, continuing its efforts to deleverage and ended the quarter with $700 million in cash. Its total corporate debt was $2.4 billion at the end of September. The company also reported its goal of trimming $80 million in costs this year is nearly complete with $70 million in cost savings realized.
CEO Ryan Schneider pointed to moves by firms catering to the luxury market, including the Corcoran Group doubling its transaction volume and Coldwell Banker’s recent acquisition of Warburg Realty. Schneider also pointed to its iBuyer division, RealSure, as a key part of its growth strategy.
RealSure, the company’s iBuyer program that was founded in 2019 alongside joint venture partner Home Partners of America, this week appointed its first CEO. The move signaled a time of major growth for the platform, on which sellers are guaranteed a 45-day offer with the option to list their home traditionally with an agent and then pick between the two offers.
Katie Finnegan comes to RealSure from a retail and eCommerce background, most recently as an executive at Rite Aid after working with Marc Lore at Jet.com.
The venture between Realogy and Home Partners of America formalized about a year after Realogy launched the program. Blackstone later acquired HPA for $6 billion in June.
The iBuying program now operates in 24 cities, up from 21 last quarter and 13 in the first quarter of the year. Schneider said about 70 percent of RealSure clients request to list their homes with agents.
“RealSure will step up meaningfully in Q4,” the CEO said, noting that Finnegan will be building out the division in coming months and the platform will begin providing services to buyers by fronting cash so they can make competitive offers. Services to buyers will initially roll out in five markets, he said.
Earlier in the month, the company announced the sale of a majority stake in its title insurance business business.
Realogy formed a joint venture with private investment firm Centerbridge Partners, which bought 70 percent of the business for $210 million as the company retained its 30 percent stake. Schneider described the deal as unlocking capital for the brokerage giant and enabling it to focus on its key businesses.