Dallas-based brokerage and franchisor United Real Estate announced its second merger this month on Wednesday and may not be done yet.
After announcing a merger with Benchmark Realty last week, URE says it has also merged with the largest residential brokerage in Georgia, Virtual Properties Realty. VPR, founded in 1999, has 14 offices and 3,700 agents in the Greater Atlanta area and closed more than $2.5 billion in annual sales in the 12 months through November.
In a statement, VPR broker-owner and co-founder Steve Wagner said the merger “turbocharges” the brokerage’s “mission of progressive growth.”
“VPR just gained a strong national footprint and better capacity to deliver what is needed to propel us into our future,” he said.
In 2019, Virtual Properties ranked as the 48th largest brokerage in the country in terms of transaction sides and the 109th largest in terms of sales volume, according to Real Trends.
United Real Estate, a division of United Real Estate Group, operates in 24 states with more than 100 offices (85 of them franchised) and more than 10,500 agents. URE’s agents will close more than 48,000 transactions worth more than $12 billion in sales in 2020, according to a press release.
“Joining a much larger organization with a strong national network provides tremendous growth opportunities for our agents and more services to our clients,” said VPR broker-owner and co-founder Karen Burks in a statement.
URE does not have any offices in the Atlanta area, so the merger will be growing its presence there. The VPR brand will remain as is and over time the two brands will be incorporated so that VPR will be designated a United Real Estate company, but the VPR brand will remain prominent, UREG CEO Dan Duffy told Inman in a phone interview.
The deal closed on Dec. 4. Duffy declined to disclose the financial terms of the deal or its structure other than to say it was an “equity transaction.”
Duffy told Inman that URE is growing by 2,000 agents this year organically and along with the mergers, will be doubling in size. He attributes this growth in part to URE’s business model. Like VPR and Benchmark, URE operates a 100 percent commission, fee-based business model in which agents keep all of their commission and pay no royalties but pay monthly and transaction fees. The firm couples that with full service and a comprehensive technology suite, he said.
“Technology has enabled these models to provide as good or better of services to the agent at a much, much lower price point,” he said. “The market share is moving in this direction at an accelerated pace. It’s just a matter of time before the preponderance of transaction volume and agents affiliating with brands and brokerages is with the model that we have. We’re not the only ones, but this is the model that agents find most attractive.”
United Country Real Estate, URE’s sister brand in rural areas, uses a traditional agent split and royalty model because the company provides those agents with a portfolio of proprietary websites that are heavily trafficked due to proprietary SEO algorithms, according to Duffy. United Country captures leads from those sites, nurtures them and passes them on to agents at no additional charge, he said.
In a statement, Duffy said VPR’s co-founders, Wagner and Burks, were early pioneers of the 100-percent commission, full-service model.
“As a result, they have grown faster and more consistently than any other brokerage in the Southeastern U.S.” he said.“While VPR’s size and market share were appealing, we were also attracted to the close alignment of our cultures and how VPR truly demonstrates their commitment to extraordinary agent and client outcomes.”
VPR has made an “enormous commitment to training” and provides professional coaching and mentoring programs for its agents, including more than 500 in-person and virtual training programs each year, according to the release.
In a statement, Rick Haase, president of United Real Estate and COO of United Real Estate Group, said, “VPR has created a culture of success by adapting quickly to the changing real estate landscape; an example of that is their successful approach to the emerging iBuyer business segment.”
When asked what this is referring to, Haase said via email, “The emerging and interrupted segment of iBuyer-based offerings has been perceived as a threat to organized real estate in what that promised: a near guaranteed sale option for buyers. As a result of all of the actual lower net proceeds and inconsistent delivery on those promises, the real estate community has largely looked on it as a hollow promise to sellers.
“But, instead of fighting the process, VPR has developed a significant educational effort and a process whereby agents can accurately inform their clients as to the promises and actual results associated with this type of selling.”
As part of the merger announcement, UREG said it had completed its rollout of its virtual, cloud-based proprietary Bullseye Agent & Broker Productivity Platform. The platform is powered by a data warehouse of more than 1.8 million listings and generates more than 3 million monthly visitors to United’s websites and 30,000 leads for its agents per year, the company said.
It includes “everything from the front of the office to the CRM system, website propagation of agent websites, the data warehouse, [and] the productivity platform which includes all of our training modules,” Duffy said.
United Real Estate Group began developing the platform a decade ago and started rolling it out in beta form in 2014, according to Duffy. It’s taken six years to finish the rollout to all 600-plus UREG offices, which have 16,000 real estate and auction professionals across four continents, according to the company.
“Technology integration always has its challenges,” Duffy said. “People don’t like change. It went as smoothly or smoother than any other technology migration that I’ve been part of.”
Asked whether any other mergers will be announced before the end of the year, Duffy said, “Possibly.”