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Much like its competitors, Realogy has flown through the last 12 months with flying colors as its brokerage, mortgage, title, and iBuying services catapulted the company to its best first-quarter earnings ever. Now, CEO Ryan Schneider is focused squarely on the future, which includes doubling down on ancillary services, further tech innovation, digging into the iBuyer market, and taking a flexible approach to Realogy’s offerings.
“What a wild ride it has been. You think back 13 to 14 months ago when we were seeing this just unprecedented drop in real estate transactions and all the health and safety challenges, and then to see the world change with remote work and people wanting to live in different places,” Schneider told moderator Clelia Peters during his Connect Now session. “[Then there’s] the housing market. We’re back, and it’s just a cycle like nothing I’ve ever seen.”
“We’re so excited by what we’re seeing [and] with what [our agents and franchisees are] doing,” he added. “We’ve also loved the acceleration of a lot of the things at Realogy that we planted the seeds for back in 2018 and 2019.”
Schneider pointed to Realogy’s virtual title closing services, which struggled to gain traction until the pandemic pushed the need for virtual title closings to the top of consumers’ and real estate agents’ lists. “People started using it first for health and safety, but then realized it’s such a better customer experience that we’ve got 15x growth in usage,” he explained. “It’s off the charts.”
Using the momentum of the past year, Schneider said Realogy is in the prime position to lead the industry into the digital age, thanks to its robust array of real estate brands and services. Although the move toward a totally digital transaction will look different based on a brand’s needs, model and clientele, he said it all comes down to creating a more seamless transaction for consumers.
“The transaction has to get simplified for the end customer [and] that includes helping the agent make it simpler. That’s where the integration of things like title and mortgage come in,” he said. “Every model has got to go more digital and no matter what your value proposition is, you’ve got to deliver more of it digitally.”
Schneider highlighted Realogy’s RealVitalize program and RealSure iBuying services as two integral parts of its digitization process; however, Realogy Title Group’s virtual services are the current leader of the pack as booming demand and favorable interest rates keep the mortgage industry riding high.
“All models are going to have to add more to the value proposition around things like the strategic response to iBuying,” he said in reference to RealSure and RealVitalize. “Every model is going to have to have more differentiated offerings, especially at the more luxury level to compete against what some of the outside capital our industry is tackling.”
“I think [title and mortgage] is an area of big growth, revenue and profit, and we’re literally demonstrating it with our title capture rates and mortgage capture rates,” he explained. “I think the customer is going to demand a more integrated experience that’s easier and simpler, period.”
Schnieder acknowledged real estate companies can’t reach profitability on mortgage and title alone, but noted it can be a powerful source of revenue and provide some of the building blocks to long-term viability. “You can look at what the margins look like if you only have title and mortgage, versus if you’re able to make at least some money from other things,” he said. “So I’m all in on it. But I’m mostly all in it for the customer experience.”
Looking forward, Schneider said Realogy’s c-suite is focused on diversification, which includes strengthening its mortgage and title services’ digital backbone and creating additional, bespoke digital solutions for Realogy’s luxury brands.
“Brokerages have more and more to offer on the luxury side and if you have scale, you can help make an agent successful, whether it’s with referrals or lead generation,” he explained. “Whereas in a mass-market side, a lot of our challenges are how do we just turn the agents into digital superheroes, so they can just be purely more productive and just have more time?”
“The way brokerages are going to need to support agents is going to increasingly differ between luxury and mass market,” he added. “We’re big enough and we’ve got enough pieces that I think we can architect that difference.”