The realty gossip mill is buzzing these days with rumors about Zillow, Keller Williams and NRT.

The realty gossip mill is busy these days.

I’m hearing Zillow may be getting into home warranties, that Keller Williams is scrambling to soften the blowback on plans to deep six payout to defectors and that NRT is using data to rid itself of costly office leases and subpar agents. And all this before lunch.

Home warranties? Has Rich Barton lost his mind? Nope

I hear through the rosé grapevine that Zillow may be eyeballing Frontdoor as a possible acquisition target. The home warranty giant has a $3 billion market cap and is run by the former Lyft COO Rex Tibbens.

Rex Tibbens

Why? Home warranties were often considered the backwater of real estate. But it has a new glow as the back-end of the real estate transaction takes a front-and-center seat with the iBuying and instant-offer crowd.

Its network of 16,000 contractors and 16,000 technicians services 2 million customers. That network could offer huge value to the iBuying crowd. If you’re in the business of buying and selling homes, you need lots of workers doing lots of things to get homes ready for sale or rent.

Plus, the company has an attractive core business — selling home warranties — with a 40+ percentage margin. It generated $1.3 billion in revenue and was profitable last year.

Buried in the Frontdoor Q4 2018 earnings report was this remark by Tibbens, “These [investments] will not only bolster our core home service plan business, but also build the foundation for our future on-demand offering.” Hmmm, and what’s that, Rex?

Frontdoor is the parent company of four home service plan brands: American Home Shield, HSA, Landmark and OneGuard.

Tibbens was named CEO of Frontdoor a year ago. Before Lyft, he was at Amazon, where he led the product development of Prime Now, the e-commerce giant’s two-hour delivery service.

Warehousing bad agents is worse than having your adult kids living in the basement

It didn’t take long for Realogy CEO Ryan Schneider to figure out where the drag is on his earnings. It is not the franchise business. Instead, NRT is the culprit.

The broker-owner biz is tough these days.

Our Jersey sources tell us NRT CEO Ryan Gorman is heads down using data to figure out how to put commercial office leases through the office shredder. He wants to radically reduce the biggest expense of most broker-owners: office space to house too many weak agents.

No more begging marginal agents to stay; data is also being used to ferret them out.

If the Ryan-plus-Ryan duet can fix NRT, then it will not become a target for activist investors, who could go rogue and force management to rethink the company strategy, retool operations and even liquidate assets.

KW drama: The defectors

Gary Keller called an emergency KW regional directors conference call today because the company had so much blowback about the news that top Keller Williams earners were pushing to end profit sharing for defectors

Email Brad Inman

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