National franchisor United Real Estate is out to grow the prevalence of auctions in residential real estate — and a $25-million cash influx should help the 4-year-old company meet its goal.
The Kansas City, Missouri-based franchisor is an offshoot of the much older land and farm property franchise brand, United Country Real Estate, which has been conducting live property auctions for decades.
United Real Estate has approximately 1,500 agents with 28 affiliates and five company-owned offices across the U.S.. It plans to leverage its rural cousin’s auction framework and bring it to residential real estate, the firm’s CEO, Dan Duffy, said.
United Real Estate agents keep 100 percent of their commissions.
They pay their brokers $65 per month for access to United Real Estate’s tech platform, plus a flat fee for each transaction that’s set by the brokerage. The per-transaction flat fee ranges from $295 to $895, according to Duffy.
Duffy called the $25 million-plus investment from private equity firm McCarthy Capital a “recapitalization.” He wouldn’t confirm an exact dollar amount.
Some of the influx of money, which comes with a line of credit, will also be used to grow United Country Real Estate, which has more than 4,000 agents in approximately 500 offices.
United Real Estate Group, the firm that houses both United Real Estate and United Country Real Estate, will use its own auction wing, United Country Real Estate Auction Services, to help grow auctions under its new residential brand.
Auctions make up approximately a quarter of land and property sales, and they currently comprise about 1 percent of annual residential home sales volume, Duffy said.
He believes that proportion could jump to 5 or 10 percent, and he feels United Real Estate will play a big role in accelerating the shift.
Unlike relatively newer real estate auction sites, such as Auction.com and Owners.com, United Real Estate’s auction model was built to work with real estate agents, Duffy said. The firm will soon be rolling out an online component, he added.
Duffy said that McCarthy Capital replaces previous investor Capital Resource Partners.
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