RealEstate.com has expanded its company-owned brokerage operations, picking up 200 agents from Tampa-based New Homes Realty and that company’s NewHomes.com Web site.
RealEstate.com, Realtors, along with affiliate LendingTree.com, spun off on Aug. 20 from parent InterActiveCorp (IAC) to form an independent company, Tree.com.
The acquisition of New Homes Realty, which includes that company’s NewHomes.com Web site, brings the company total to about 1,300 agents in 20 market areas across the country.
The move bucks a general trend of downsizing across the industry, and membership in the National Association of Realtors has fallen 9.24 percent form November 2007 to November 2008. Meanwhile, RealEstate.com grew its agent force from 600 in third-quarter 2007 to more than 1,000 in third-quarter 2008 – a 67 percent gain.
New Homes Realty has operated in 12 markets and the acquisition "helps us bolster presence in our existing markets" while adding a handful of new markets, said RealEstate.com President Bret Violette.
New Homes Realty agents had specialized in working with buyers seeking new homes listed in multiple listing services, though as the new-homes market slowed down they also worked with resale homes. The agents had specialized in working exclusively with buyers, though under RealEstate.com, Realtors they will be working with buyers and sellers, Violette said.
"They are about to be trained on our whole listing presentation," he said. RealEstate.com has a goal to retain agents when it acquires other brokerages, he said. "We always focus really heavily on strong assimilation of the sales associates. They’ll simply become part of the existing team."
RealEstate.com has an existing brokerage subsidiary that specializes in new-construction homes called iNest.
The acquisition of New Homes Realty will give the company a presence in Florida, Georgia, Illinois, Louisiana, Texas and Washington, D.C. – the company already operates 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.
RealEstate.com launched brokerage operations in 2006, building up most offices from scratch. The company’s first major acquisition was its purchase of Salt Lake City-area The Ramsey Group Inc. in April 2006, which added 40 agents.
In addition to its brokerage operations, RealEstate.com also offers lead-generation services to real estate professionals and its Web site serves as a real estate search and information portal for consumers.
Violette said that New Homes Realty is "not an office-centric company," and RealEstate.com will not take over leases for some of New Homes Realty’s offices in markets where both companies have operations.
"We did have some overlap in some existing markets and did not have to take those leases over," he said.
The agents from New Homes Realty will be branded under the RealEstate.com, Realtors name and RealEstate.com will continue to maintain the NewHome.com Web site, according to Violette.
"It’s such a powerful URL. It’s great organic positioning on search." He noted that there is a natural synergy in owning both the RealEstate.com URL and the NewHomes.com URLs.
Tree.com announced in October that its third-quarter revenue dropped 33 percent year-over-year, from $75 million in third-quarter 2007 to $50.3 million in third-quarter 2008. The company had a $22.6 million net loss in third-quarter 2008, which compares to a net loss of $6.3 million in third-quarter 2007.
And while revenue dropped 29 percent , or $4 million in the company’s real estate division during the third quarter compared to the same quarter last year, the company-owned brokerage business brought in $3.9 million more in revenue in the third quarter than it did in the same quarter last year, with closings up 41 percent.
The company’s lead-generation business with real estate brokers and builders, meanwhile, experienced a $12.2 million revenue drop year-over-year in the third quarter, and the company reported a $5.9 million year-over-year drop in revenue from its canceled lead-generation business with agents.
Tree.com’s lending revenue dropped 34 percent, or $20.7 million, in the third quarter compared to the same quarter last year.
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