Stung by losses, Coldwell Banker parent Realogy vows to become “recruiting machine”

Miami /
Feb.February 24, 2017 03:45 PM

From the New York website: After hemorrhaging agents in recent years, real estate behemoth Realogy vowed last year to regain its edge by aggressively hiring back top brokers. On Friday, CEO Richard Smith took it up a notch and pledged the company would become a “recruiting machine.”

“Don’t think there’s a start and finish to our recruitment efforts, we’re going to continue,” Smith said during an earnings call. “We’re turning this company into a recruiting machine and that’s not going to stop.”

Much of that effort will fall to Peter Sobeck, a former chief operating officer at Citi Habitats who was tapped in September as chief recruiting officer for Realogy’s NRT division, which includes Coldwell Banker, Century 21, Citi, Corcoran, Sotheby’s International Realty and other brands. One tool in his arsenal is commission splits. In 2016, Realogy’s aggregate commission split was 68.9 percent, a number that could reach 70 percent this year, CFO Tony Hull said during the call.

Nonetheless, Smith said New Jersey-based Realogy would not “go head to head with our competition,” which in Miami includes rival firms like Douglas Elliman and, more recently, startup brokerage Compass.

“If you’re just throwing dollar at the agents, it’s not sustainable,” Smith said. “We’ll offer compensation that’s in keeping with our goals, but our value proposition is what’s most important.”  To that end, Realogy also rolled out an “integrated learning institute” for agents over the past year, he said.

In addition to competition for agents, however, Realogy’s been grappling with a soft high-end market. In its NRT division, properties $2.5 million and up accounted for 17 percent of 2016’s sales.

On Friday, Realogy said NRT’s sales were flat for the full year. Its revenue was also flat, at $4.34 billion.

Despite NRT’s lackluster year, Realogy generated $5.81 billion in 2016 revenue, up 2 percent year over year, thanks to its franchise offices. And Realogy’s net income rose 16 percent to $213 million.

Hull described light at the end of the tunnel with regard to the sluggish high-end market in cities like New York. “One of the things that was slowing down last year was sellers not realizing it was a buyer’s market,” he said. “They’re finally realizing that and cutting prices to be more realistic about the environment. That’s probably the most positive thing that’s starting to resonate within the high end.”


Related Articles

arrow_forward_ios
From left: Sotheby’s Daniel de la Vega and Reagan Jefferies with Brevard County
One Sotheby’s picks up Brevard County brokerage
One Sotheby’s picks up Brevard County brokerage
10181 US Highway 98 West and 39 Sandy Dunes Circle (LoopNet)
Florida Panhandle estate sold for $25M
Florida Panhandle estate sold for $25M
Netscape co-founder Jim Clark and 2000 South Ocean Boulevard in Manalapan (Getty, Sotheby's)
Manalapan compound poised to sell for Florida-record $175M
Manalapan compound poised to sell for Florida-record $175M
Hassan Whiteside and 528 Lakeview Court in Miami Beach (Getty, Joe Azar/Compass)
NBA’s Hassan Whiteside lists Miami home for $23M, triple what he paid for it
NBA’s Hassan Whiteside lists Miami home for $23M, triple what he paid for it
These brokerages are winning South Florida’s talent wars
These brokerages are winning South Florida’s talent wars
These brokerages are winning South Florida’s talent wars
From left: Douglas Elliman's Julian Cohen and CEO Jay Parker (Getty Images, Douglas Elliman, iStock)
Miami Beach agent Julian Cohen returns to Douglas Elliman
Miami Beach agent Julian Cohen returns to Douglas Elliman
(ONE Sotheby's Realty)
Former mayor George “Bud” Scholl’s waterfront home hits market for $13.9M
Former mayor George “Bud” Scholl’s waterfront home hits market for $13.9M
Home prices notched record-shattering growth in 2021, but slowdown is likely
Home prices notched record-shattering growth in 2021, but slowdown is likely
Home prices notched record-shattering growth in 2021, but slowdown is likely
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...