Despite losses at its parent company, RealEstate.com’s company-owned brokerage grew second-quarter revenue by 24 percent as it expanded into 14 markets and surpassed the 1,000-agent mark.
RealEstate.com is an operating company of IAC, which is planning to spin the business off along with online lender and lead generator LendingTree and other real estate-related businesses to be grouped under the umbrella of Tree.com.
In addition to a real estate brokerage with a slightly unwieldy name — "RealEstate.com, Realtors" — RealEstate.com operates a Web portal that offers nearly 2 million listings and valuations for 97 million properties.
Although RealEstate.com shut down a subscription-based lead-generation program for agents in December (see story), the company still generates revenue through lead generation networks for real estate brokers and home builders.
In releasing second-quarter results, IAC said revenue at RealEstate.com as a whole fell 47 percent from a year ago, to $60 million — largely because of fewer closings at the builder and broker networks and the absence of revenue from the lead-generation network for agents. The decline was partially offset by increased closings at the company-owned brokerage, IAC said.
"Business growth in a down market is not impossible and RealEstate.com, Realtors is proving it," RealEstate.com President Bret Violette said in a separate press release announcing the 1,000-agent milestone.
The 2,200 closings for the quarter, however, represented a 30 percent decline from the same quarter a year ago, when RealEstate.com logged 3,100 closings, IAC reported. Expressed in dollars, closings were down 32 percent year-over-year, to $541 million, with an average sales price of about $246,000, down 4 percent from a year ago.
RealEstate.com, Realtors now operates company-owned brokerages in Charlotte, Denver, New England, Philadelphia, Las Vegas, New Jersey, New York, Phoenix, Portland, Salt Lake City, San Diego, Seattle, and Sierra Vista and Tucson, Ariz. In terms of agents, the brokerage is among the top 50 in a field of more than 80,000, the company said.
RealEstate.com posted a $65.6 million operating loss in the second quarter, compared with an $8.7 million loss during the same quarter a year ago. Most of the loss consisted of a $61 million impairment charge related to goodwill, "reflecting the company’s assessment of the likely profitability of the real estate segment in light of the persistent adverse mortgage market conditions," IAC said.
The impairment charge for the company IAC plans to spin off as Tree.com — which includes RealEstate.com and LendingTree — totaled $165.9 million. IAC, which also owns Ticketmaster, HSN home shopping network and other companies, reported a $421 million net loss for the quarter.
IAC Chairman and Chief Executive Officer Barry Diller promised IAC is "right around the corner" from spinning IAC off into five separate companies and an end to "the complexity surrounding the combined structure." Although the plan was delayed by a lawsuit, IAC has been breaking out the results of the five companies separately.
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