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Fathom Realty is onboarding 2,200 agents and growing its agent count by close to 20 percent with the acquisition of the third-biggest real estate brokerage in Arizona, My Home Group.
In announcing the deal Monday, Fathom Holdings Inc. said agents at the brokerage will continue to operate under the My Home Group brand, with co-founders Jereme Kleven and Mark Hutchins staying on to oversee daily operations.
Jereme Kleven
“Our merger with Fathom is a major milestone in accelerating business development for our agents and organization,” Kleven said in a statement. “It aligns perfectly with our core values, empowering agents to expand rapidly and gain access to enhanced technology, a deeper leadership bench, and revenue sharing to significantly shortening their path to success.”
Terms of the deal were not announced, but Fathom’s management said additional details will be provided Thursday when the company reports third quarter earnings.
Shares in Fathom Holdings, which in the last year have traded for as little as $1.32 and as much as $4.33, were changing hands Monday for $2.50 to $2.60 — little changed from Friday’s closing price of $2.55.
Like other real estate brokerages, Fathom Realty saw sales dented as mortgage rates climbed to post-pandemic highs last year. But the Cary, North Carolina-based brokerage has continued to grow its agent count, offering flat-fee agent commission plans and incentives aimed at boosting agent recruitment and retention.
Fathom growing agent count
Source: Fathom Holdings investor presentation.
During the second quarter, Fathom boosted its agent count by 12 percent from a year ago, to 12,224. The My Home Group deal will grow Fathom Realty’s agent count by an additional 18 percent, to 14,500.
Marco Fregenal
“Arizona’s real estate market presents significant opportunities, and My Home Group’s agent-focused approach aligns seamlessly with Fathom’s culture,” Fathom Holdings CEO Marco Fregenal said, in a statement. “This acquisition strengthens our Southwest expansion, amplifying our presence in key markets and advancing our vision of sustainable, nationwide growth. Together, we will build a powerful network serving agents, clients, employees, and communities.”
Fathom Realty planning to be in all 50 states
Source: Fathom Holdings investor presentation.
In addition to its flat-fee agent commission plans, Fathom says its in-house technology platform, integrating residential brokerage, mortgage and title insurance, gives it an edge over competitors as it seeks to expand.
While its real estate brokerage business, Fathom Realty, generates most of Fathom Holdings’ revenues, the company’s other brands include Encompass Lending, Verus Title and intelliAgent.
On Fathom’s Q2 earnings call with investment analysts, Fregenal said Fathom Realty plans to be operating in all 50 states by mid-2025.
“Probably the biggest states that we’re not in are New York and Pennsylvania, but Pennsylvania actually is open already,” he said. “New York will probably be open within the next 60 days. And then after that, we’ll cover the rest of the country. We’ll probably expand into Canada sometime next year as well.”
Although Fathom posted a $24 million 2023 net loss and racked up an accumulated deficit of $78.8 million through June 30 of this year, the company has trimmed its losses to $7.2 million during the first half of the year, including a $1.3 million Q2 loss.
In September, Fathom Holdings raised $5 million to pursue growth plans, issuing senior convertible notes to an existing investor who owns more than 5 percent of the company’s common stock and to board chair Scott Flanders.
The new funding was announced less than two weeks after Fathom announced that it would pay $2.95 million to settle claims made by homesellers in the Sitzer | Burnett commission lawsuit and make changes outlined in the National Association of Realtors’ settlement.
Fathom was among the brokerages and franchises that were not included in the NAR settlement because they racked up more than $2 billion in 2022 sales volume.
With $5.9 billion in 2023 sales volume and 13,225 transaction sides, My Home Group is also a member of that group, according to data compiled by Real Trends. The Scottsdale-based brokerage last year ranked 3rd in Arizona by dollar volume and 4th by transaction sides, according to Real Trends.
Joining Fathom “gives us the scale we need to drive deeper growth in Arizona and the Southwest,” Hutchins said in a statement.
Mark Hutchins
“With Fathom’s technology, innovative commission plans, and dedication to agent success, we’re poised to elevate our impact and efficiency,” Hutchins said. “This is a tremendous opportunity for both agents and clients, and we’re honored to join forces with the best in the business.”
