To all the agents in the house,
I recently took a walk on the mild side, reporting on Berkshire Hathaway HomeServices of America.
OpenHouse readers offered helpful opinions about the Warren Buffett-owned brokerage plus franchise network, praising their stability and training program.
Others admitted they can't muster an opinion about a company with inconsistent branding and a potpourri of operations. "They do things the way they've always been done," one agent said. "They are the kind of place that has coffee for everybody," offered another.
What I, more or less, concluded is that, despite these perceived shortcomings, Berkshire Hathaway HomeServices of America is successful.
The company runs a healthy profit each year, while also growing thanks to acquisitions of not just brokerages (Long & Foster) but mortgage joint ventures (Prosperity Mortgage). The expansion of their franchise network continued this week, with the announcement of a New Delhi, India affiliate.
What do you think are the lessons rivals can take from HomeServices? A few possible candidates:
* Brokerages cannot live on sales commission income alone. Gino Blefari, CEO of HomeServices, said that what his brokerage gets in commissions is just 27% of total company revenue.
That compares to commissions at Realogy, perhaps Home Services closest apples-to-apples competitor, making up the vast majority of revenue. Commissions at Compass make-up almost 100 % of revenue.
HomeServices' bread-and-butter is real estate. But perhaps home sales can only be a profitable operation if the homebuyer also looks at mortgage, or title, or insurance services.
* Tech is whatever. Perhaps I just caught Blefari on a particular day, but the CEO was not in the mood to prattle on about HomeServices' tech advantages.
It would seem, from readers' responses to the ShowingTime newsletter from Wednesday, that many agents want to uniformly deploy tech products they have available, not eagerly use the latest thing.
* All real estate is local. Blefari said that what consumers want to see is the longstanding local brand (quietly owned by Warren Buffett).
"When Troy Aikman buys a house, he buys it from Allie Beth Allman," Blefari said, in reference to the 1990s Dallas Cowboys quarterback, and a HomeServices-owned Dallas brokerage around from even before the '90s.
Now, this assumes that most home buyers are fairly sedentary and care about their local brands.
But such old-fashioned arguments carry the day at HomeServices. I'm curious if you'd like your brokerage to adopt some of these ideas. Or not. Please email me anonymously at mblake@housingwire.com.
Sincerely,
Matthew Blake
Senior Real Estate Reporter
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