Realogy reported homesale transaction volume of $152 billion, up 3 percent from this time last year in its second-quarter earnings for 2018 Friday morning.
Realogy, a real estate holding company that counts among its assets Century 21, Coldwell Banker and Sotheby’s, unveiled plans to launch at least one new franchise brand by 2019, CEO Ryan Schneider confirmed during a second-quarter earnings call Friday morning.
“We’re looking at more than one — at least one,” Schneider said during the earnings call. “There are a couple niches in the market that are both a little bit underserved overall and underserved by Realogy.”
The new franchise brand will not be built around technology, Schneider said. Instead, Realogy will look to build a new brand with a different operating model through its physical presence or customer segment targeting, Schneider said.
Beside Century 21, Coldwell Banker and Sotheby’s, Realogy lays claim to The Corcoran Group, Better Homes and Gardens Real Estate, NRT and ERA, among approximately a dozen franchises.
During the earnings call, meanwhile, Schneider reported homesale transaction volume of $152 billion for the holding company, up 3 percent from this time last year, compared to 1 percent growth reported by the National Association of Realtors.
The gigantic franchisor reported revenue of $1.82 billion and attributed its increase in homesale transaction volume to a 4 percent jump in volume throughout Realogy Franchise Group and a 1 percent gain at the brand NRT.
But the company acknowledged to investors disappointing financial results for its brokerage, NRT.
“We are clearly not satisfied with NRT’s direct financial results,” Schneider said. “We need to expand the base of productive agents faster than our recent past.”
Schneider said Realogy would standardize commission rates across NRT, which currently vary based on the brokerages that combined to form NRT, and that the company would begin charging for some new products for agents.
Schneider also highlighted to investors Realogy’s recent investments in the tech startups OJO Labs and Notarize.
“We are excited that some of our early 2018 efforts are starting to drive results. We outperformed the market on transaction volume, we began to see the expense benefits from our expanded focus on operating efficiency and our Operating EBITDA exceeded Q2 2017,” Schneider said in a statement released before the earnings call. “We are moving quickly to make strategic changes to improve profitability over time, anchored in growing our base of independent sales agents at both NRT and RFG and providing agents compelling service, data and technology products to allow them to increase their productivity.”
Realogy attributed its 2 percent increase in revenue to its increase in transaction volume, measured as transaction sides multiplied by average sale price. The company reported net income of $123 million, compared to $109 million a year ago. The company’s EBITDA was $276 million in the second quarter.