Better Homes and Gardens Real Estate Gary Greene and Heritage Texas Properties confirmed to Inman Tuesday that the two companies are merging, making the newly formed brokerage one of the top 50 biggest in the country as measured by Real Trends’ 2018 metrics.
“What we like about them is we’ve got real common core values, cultures, market coverages,” Mark Woodroof, managing partner of Better Homes and Gardens Real Estate Gary Greene, told Inman. “The people generally are really complimentary. When we combine our strengths, it fills in some gaps for both of us.”
Better Homes and Gardens Real Estate Gary Greene was founded in 1963 and affiliated with Better Homes and Gardens in 2012. Heritage Texas Properties was founded in 1976 and ranks as the 73rd largest indie brokerage in the country, according to the Real Trends 500. The two firms ranked one and five in transaction sides in the Houston metro area, respectively, according to a May 2019 ranking from the Houston Business Journal.
Together, operating under the Better Homes and Gardens Real Estate Gary Greene brand, the combined company will have 24 offices and roughly 1,300 agents. If the two were combined on the Real Trends 500 in 2018, the company would have ranked 46th in sales volume and 42nd in transaction sides with $3.65 billion in sales and 11,839 transaction sides in 2018.
“The fact is that we’ve created a real powerhouse,” Woodroof said. “We were the leading broker in Houston previously, and now we’re much more of the leading broker, but with more coverage, more people more signs and a deeper message.”
Woodroof and co-managing partner Marilyn Eiland will continue to lead the company while Heritage Texas Properties CEO Robin Mueck and President Chaille Ralph will stay on with the combined company in leadership roles.
Once the paperwork is out of the way, the next task in the wake of a merger or acquisition becomes ensuring the two cultures will mesh. Agents at Heritage Texas Properties will go from working at an indie to be part of a franchise network that’s part of the largest real estate holding company in the country. They’ll also have to learn new tools and services.
Sherry Chris, the CEO of Better Homes and Gardens Real Estate told Inman she’s known the leaders at both brokerages for more than 20 years.
“It was always, in the back of my mind, ‘I wonder if we can all work together somehow,'” she told Inman.
Chris told Inman that both businesses have a consumer-first focus, so the meshing of cultures should be no issue.
“The interesting thing about [Heritage Properties Texas CEO Robin Mueck] and her company is that when she looked at what Better Homes and Gardens real estate has to offer – both the offering and also the luxury offering – it fit right into what she does each and every day what her agents do,” Chris said. “She had other suitors, but this was the partnership that she felt was the strongest partnership to allow her agents to continue on with business as usual.”
Houston is currently a very fragmented market, Woodroof said. Right now, the combined company will make up about 6 percent of market share in the entire metro area, but Woodroof said his goal is to snag 10 percent, which wouldn’t happen without partnerships like the merger with Heritage Properties Texas.
Eiland, the other managing partner of Better Homes and Gardens Real Estate Gary Greene also highlighted how fragmented the market in Houston is, explaining that, with more than 35,000 members of the Houston Association of Realtors, the average brokerage still has less than five agents.
“You can drive down streets in Houston, Texas in neighborhoods and see you can see six different yard signs,” Eiland. “I’ve been in the business 34 years and I don’t even recognize half of them. It’s such a splintered market place.”
Houston, like many markets across the country, is under tremendous pressure from newcomers and ‘disruptors,’ which Woodroof says he likes to call “distractors.” Houston, for example, is a market populated by iBuyers like Zillow Offers, Opendoor and Offerpad. A new tool from real estate tech advisor Mike DelPrete and real estate tech startup Remaine shows just has ubiquitous iBuyers have become in the market over the last year.
New competitors are also entering the market place in the gold rush for market share. Compass entered Houston on November 2018, eXp Realty is live in Houston and just last week, Douglas Elliman entered the market. This merger will allow his agents to gain more leverage in the market place, according to Woodroof.
“What we are as a company is where serious real estate professionals should want to come and have serious support and professional support tools to do their business and grow their business,” Woodroof said “And [Hertiage] is that kind of shop, and it’s hard to find. So when we merge together, we think it will be one of the very few places that serious practitioners will want to be.”