Coldwell Banker Bain owner and chairman Bill Riss has sold his majority interest in the company to US RES Holdco LLC, an affiliate of the Houston-based title insurance company Stewart Information Services, the companies announced last week.
The terms of the deal were not disclosed.
The sale of the nearly 50-year-old company, which is one of the largest residential real estate firms in the Puget Sound, will afford the franchise “more resources and capital to expand its presence and increase its competitive position in an ever-changing real estate industry,” a company statement explained. It added that daily operations would remain as they always have.
According to a report from the Seattle Times, Coldwell Banker Bain CEO Mike Grady wrote an email to brokers the day before the news broke that stated competitors backed by venture capital — including iBuyers — were threatening traditional brokerages in the industry since they aren’t tied to generating short-term profits, spurring Coldwell Banker Bain’s sale in an attempt to remain competitive.
“Over the last few years, our industry has been changing with non-real estate, venture capital companies looking to displace the broker from the center of [the] transaction,” Grady wrote. “The most concerning are the type with significant funding behind them. This deep capital, and lack of the necessity for profit, allows these competitors to operate in a manner traditional real estate companies would find challenging.”
“Considering the industry change and to be effective against these new competitors, we needed to evolve,” Grady added. “We needed a strategic alliance.”
A Coldwell Banker Bain agent that spoke with the Seattle Times expressed skepticism about the deal in terms of agent benefits, despite it being framed as a move to help support the company into the future.
“From their perspective, they’re bringing in more technology to compete against Zillow and Redfin,” the agent, who wished to remain anonymous, said. “But I think the way to compete against those folks is to bring in more humanity to the job. That requires much more investment in [agent] training.”
Last week, however, Zillow also announced it would be shutting down its iBuying program, Zillow Offers.
As the real estate industry continues to become steeped in technology, Coldwell Banker Bain executive vice president of operations John Deely said the brokerage would do well to team up with companies prepared to handle this industry shift.
“Stewart is a leader in that whole arena,” Deely told the Seattle Times. “The fact is with the way the industry is changing it’s an advantage to our agents and our clients to have a partner that is very well versed in the real estate industry.”
Grady told the Puget Sound Business Journal that Stewart will in effect be “an absentee owner,” leaving the company to conduct its business, but with added resources from the title company.
Coldwell Banker Bain is one of the leading Coldwell Banker affiliates worldwide, with over $6 billion in sales volume last year. The company has focused on the luxury market since its founding by Bill Bain in 1972, when the company was called William A. Bain Associates. Riss joined the brokerage in 1982 to manage the Bellevue office, bought the company in 1993, and joined Coldwell Banker.
In recent years, the company had undergone a rebrand and worked to incorporate new tech into its agent offerings.
The company has more than 1,200 agents across 36 offices in Oregon and Washington, and is set to keep its affiliation with Coldwell Banker for at least the next several years, having recently signed a 12-year franchise contract.