Berkshire Hathaway affiliate HomeServices of America is winding down the Real Living Real Estate brand, nearly a decade after acquiring it.
Harley E. Rouda founded Real Living in 2002. By 2004, Real Living was the third-largest privately owned residential brokerage in the United States. In September 2005, the firm had nearly 5,000 sales associates and employees and more than 140 offices throughout the Midwest, Florida, South Carolina, Texas and West Virginia.
Canadian-based Brookfield bought Real Living in 2009 and merged it with GMAC Real Estate under the Real Living brand. The merged Real Living operations added up to about 10,000 agents and 600 offices in 46 states.
In October 2012, HomeServices entered the franchising business by purchasing a majority interest in the Prudential Real Estate and Real Living brands from Brookfield. HomeServices and Brookfield formed a joint venture, HSF Affiliates LLC, which continued to operate the Real Living and Prudential Real Estate affiliate networks. But in March 2013, the company rolled out a new brand they hoped would be adopted by brokerages affiliated with those brands: Berkshire Hathaway HomeServices (BHHS). HomeServices had a combined 53,000 agents at the time.
All of HomeServices’ Prudential affiliates and many Real Living affiliates did transition to the new brand, but 154 Real Living offices remained, according to the franchisor’s 2020 Franchise Disclosure.
Now, HomeServices seems to have run out of patience. Last week, Real Living CEO Allan Dalton sent out an email to all Real Living franchise owners letting them know that the company was winding down the use of the brand and would end its efforts to expand the franchise network. He also delivered the same remarks in a video.
“This decision was a very difficult one to make, however we believe it is the right decision due to the following primary reasons: our inability to grow the Real Living network through new franchise sales and the departure of franchisees from the Real Living network, along with other brokerages advising us that they will not seek to renew their franchise relationships with Real Living,” Dalton said.
“As you can appreciate, attracting new franchisees and retaining existing members is the lifeblood of any franchise system.”
Dalton went on to say that Real Living representatives would be reaching out to broker-owners to start working with them to discuss options for transitioning from the Real Living system “to the next chapter for their businesses.”
For Thad McIntyre, broker-owner of PowerMark Properties in Biloxi, Mississippi, the news came as a surprise, but not necessarily an unwelcome one.
“We all knew something was up,” McIntyre told Inman via email. “There has been no real contact from anyone from corporate for several months, but we didn’t know when [or] what would be happening. Some thought it would be sold, some thought they would blend us to Berkshire and honestly today was a shocker!”
He joined Real Living in 2016 and still had four years left on his contract. “We haven’t seen the value in years and actually considered requesting them to terminate our agreement,” he said. “So I guess it’s a blessing.”
McIntyre said his brokerage wouldn’t be as affected as others because when he signed up with Real Living he was allowed to use his PowerMark brand and just add “A Real Living Network Member” to his company logo.
Inman reached out to HSF Affiliates to ask how many agents and brokers are currently affiliated with the Real Living brand, why the company has been unable to grow the brand through new franchise sales, why franchisees have been departing, which transition options are available to franchise owners, how long they’ll have to transition and whether the company is shutting down the brand in order to focus its resources on growing the Berkshire Hathaway HomeServices brand.
The company did not respond to the questions and instead provided an emailed statement from Real Living: “Real Living Real Estate, LLC recently announced its decision to cease its efforts to expand the Real Living Real Estate network and to move towards winding down that brand and system. Real Living is proud of its members and its goal will be to assist each member to make whatever transition path, from the options identified, that which is best for their company and as smooth as possible.”
HomeServices is the largest real estate brokerage in the U.S. by transaction sides and has about 46,000 agents total, according to Real Trends.