Realogy Corp. posted a $259 million net loss for the first three months of the year, despite cutting $310 million in costs and generating $101 million in additional commission income from new franchise sales.

Much of the loss — $144 million — was attributed to interest payments on the company’s massive debt. But Realogy also saw revenue fall $354 million compared to the same period a year ago, as both home sales and commissions from those sales dropped sharply.

At Realogy Franchise Group (RFG) — which includes the newly launched Better Homes and Gardens Real Estate brand, along with CENTURY 21, Coldwell Banker, The Corcoran Group, ERA, and Sotheby’s International Realty — transaction sides and average home sales price were both down 15 percent.

Transaction sides handled by RFG companies (in which agents represented either buyers or sellers), totaled 178,233 during the first three months of the year, down from 209,313 during the same period a year ago, Realogy said in a regulatory filing.

The average home price for sales brokered by RFG companies fell from $214,305 to $182,865, resulting in smaller commissions and royalty payments to Realogy. An increase in average broker commission rate from 2.5 percent to 2.57 percent (per side) helped offset some of the loss.

At NRT, the company-owned brokerage unit, transaction sides were down 12 percent, to 47,499, and average home-sale price was down 32 percent. Thanks in large part to an increase in real estate-owned (REO) sales, the average sales price fell from $526,570 a year ago to $355,838 in the first three months of 2009.

As was the case at RFG, the average broker commission rate at NRT was up slightly, to 2.55 percent, an 8-basis-point increase from a year ago.

In a conference call with investors, Realogy Chief Executive Officer Richard A. Smith restated previous calls for the government to increase a first-time homebuyer tax credit from $8,000 to $15,000, and make it available to all buyers regardless of income. He said a larger tax credit would be particularly effective in conjunction with a government program to buy-down interest rates to 4.5 percent on a temporary basis, perhaps one year.

Smith said NRT has slashed its office locations from 1,100 at the peak of the housing boom in 2005 to 793 at the end of March. He said Realogy continues to invest in technology, and plans to roll out "Version 3.0" of the company’s 4-year-old Lead Router application during the second quarter.

Responding to rumors that the company might be forced to seek bankruptcy protection, Realogy said in February that its 4.95-to-1 debt ratio on $3.25 billion in senior secured debt remained well within the maximum 5.35-to-1 ratio stipulated in its credit agreement.

Realogy said at the time that private-equity firm Apollo Management LP had pledged to help the company maintain its debt ratio and cash flow through the end of this year (see story).

Realogy said Tuesday that the debt ratio had risen to 5.1-to-1 as of March 31, and that its senior secured debt totaled $3.5 billion.


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