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
The partially collapsed 12-story Champlain Towers South condo building (Getty)
Inside the tug-of-war over the Surfside condo site’s future
Inside the tug-of-war over the Surfside condo site’s future
 Adam Neumann (Getty, Bal Harbour Florida)
Ex-WeWork CEO Adam Neumann inks $44M deal for Bal Harbour properties
Ex-WeWork CEO Adam Neumann inks $44M deal for Bal Harbour properties
Alex Sapir and Giovanni Fasciano with Arte by Antonio Citterio in Surfside (Photos via Arte by Antonio Citterio/PR Newswire)
Miami penthouse sets cryptocurrency sale record: $22.5M
Miami penthouse sets cryptocurrency sale record: $22.5M
(iStock)
South Florida resi construction starts soar in March
South Florida resi construction starts soar in March
Eden Multifamily heads Jay Massirman and Jay Jacobson with Cypress Equity Investments CEO Michael Sorochinsky (rendering courtesy of MSA Architects)
Eden Multifamily, Cypress Equity score $24M construction loan for Tamarac apartments
Eden Multifamily, Cypress Equity score $24M construction loan for Tamarac apartments
(iStock)
Home prices across globe hit records, prompting worries of bubble
Home prices across globe hit records, prompting worries of bubble
Steven and Beth Millner with One Thousand Ocean (Patrick McMullan/Getty, Google Maps)
Private equity honcho pays $5M for Boca Raton condo
Private equity honcho pays $5M for Boca Raton condo
David Purisch and Duff Rubin
Movers & Shakers: Duff Rubin takes over Coldwell Banker in Florida & more
Movers & Shakers: Duff Rubin takes over Coldwell Banker in Florida & more
arrow_forward_ios

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

Loading...