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- Article avaiable on Inman
REX Real Estate, a discount brokerage which operates outside the MLS, has publicly applauded the U.S. Department of Justice’s decision to back out of its antitrust settlement with NAR after NAR recently petitioned to have the DOJ uphold the settlement. REX, itself, filed an antitrust lawsuit against NAR and Zillow in March.
NAR continues to face significant pressure, from the government in the DOJ, REX and several homeseller lawsuits. These developments will keep the association’s hands full over the next months and years, and they may impact some long-standing industry practices and rules.
- Article avaiable on Fort Worth Business Press
Compass has acquired LegacyTexas Title, a title insurance company that covers the Dallas-Fort Worth area. The acquisition represents Compass’s continued push to grow its ancillary businesses, which, with the acquisition, now features title and escrow services in six states.
The acquisition follows the company’s February 2021 acquisition of KVS Title and its October 2020 acquisition of title and escrow software startup Modus.
- Article avaiable on PR Newswire
Ribbon, an alternative real estate transaction startup that helps homebuyers make all-cash offers on homes, raised $150 million in a Series C financing round. The company, which also partners with agents to help support their buyers’ transactions with all-cash offers, announced plans to expand to half the U.S. by 2023.
Real estate is seeing real estate transactions evolve in real time with startups like Ribbon providing new financing options to homebuyers and agents. Read more about the model in the upcoming 2022 Swanepoel Trends Report.
- Article avaiable on TechCrunch
After raising $75 million in March 2021, Pacaso, the startup run by former Zillow Group execs Spencer Rascoff (chairman) and Austin Allison (CEO) has raised another $125 million, led by SoftBank’s Vision Fund 2. The company streamlines second-home ownership for consumers with a platform that allows them to own shares in properties in 25 second home markets such as Lake Tahoe, Palm Springs, Napa and Malibu in California and Park City, Utah. The firm recently launched its first overseas market in Spain. The firm holds active brokerage licenses in its active markets where it partners with local agents to purchase homes outright or shares in a home.
Pacaso debuted its platform just in October 2020 and claims to have an annual revenue run rate of $330 million. The speed with which the startup is growing and raising money epitomizes the current real estate era, is chronicled in detail in the 2022 Swanepoel Trends Report, available for preorder here.
- Article avaiable on GeekWire
Opendoor has acquired two general contracting platforms Pro.com and Skylight and will fold the companies’ teams into its own. The move represents a deepening and expansion of the services Opendoor, and other iBuyers, look to provide real estate consumers. IBuyers are quickly becoming more than just companies who streamline the transaction – they are jumping into the services adjacent to the transaction including mortgage, title and insurance, but also moving, home renovations and more.
- Article avaiable on RealTrends
The funding spree for alternative real estate finance models continues with HomeLight’s $363 million funding round. The funding includes $263 million of debt financing that the company says it will use to fund its cash offer service, in which the company makes cash offers on homebuyers’ behalf, and its home trade-in service, in which it helps finance a homeowner’s purchase of a new home and the sale of their existing home. The funding illustrates the intense attention the alternative financing model is receiving and the promise investors think it has.
- Article avaiable on Inman
Related to the story above, NAR is considering adopting a policy that will require websites that display listings through IDX feeds from Realtor association-run MLSs to display the contact information for listing agents prominently. Realogy has come out to publicly support the policy.
Listing broker and agent attribution has been a conflicting topic for brokerages and agents for many years. Many complained or resented when realtor.com and Zillow.com grew significantly by selling connections to other agents off their listings, but also faced some of the same issues on the listings presented on broker sites throughout their markets. IDX rules have not required prominent listing agent attribution, and this policy looks to change that. With CRMLS’s move, covered above, and large companies such as Realogy supporting the proposed NAR policy, this could be changing now.
- Article avaiable on HousingWire
IFunder Orchard, which provides brokerage, mortgage and title services to homebuyers and sellers, raised $100 million in a Series D fundraising round. The company provides cash-backed offers on behalf of homeowners buying a new home for a 6 percent fee. The funding indicates the sustained interest and attractiveness of the alternative real estate financing models cropping up, which include iBuyers and a growing number of alternative financing models.
- Article avaiable on Inman
The nation’s largest MLS, CRMLS, which serves over 108,000 subscribers in California, updated its policy in September to require all brokers to prominently display the name and contact info of listing brokers and agents on listings they receive through an IDX feed. Instead of appearing down on listing display pages, brokers must now display that information toward the top.
Now that Zillow Group displays listings on its site as a participating broker through IDX feeds, rules like this carry more weight, especially from the nation’s largest MLS. Many portals, including realtor.com, now prominently display listing broker or agent names and contact info. CoStar Group has said it plans to compete by leaning into the industry’s Fair Display Guidelines, of which prominent listing broker or agent display is key component.
- Article avaiable on Washington Post
Institutional investors and iBuyers captured a record share of single-family homes in the second quarter of 2021. These firms accounted for 16.1 percent of all single-family purchases across the nation in that period, approximately double the rate (8.4 percent) a decade ago, according to Redfin data. The tally excludes purchases from smaller, individual investors.
This is the highest share for any quarter on record, which goes back to 2000. As iBuyers increase their market share and major private equity-backed companies such as Blackstone Group increase their activity in the single-family space, housing affordability, especially for lower-income buyers, may become a bigger challenge.
- Article avaiable on HousingWire
Offerpad became the latest residential real estate brokerage company to go public. Launched in 2015, the iBuyer, which also represents buyers and sellers as a brokerage, went public on the New York Stock Exchange via a merger with Spencer Rascoff’s special acquisition company on September 2. The company began trading at a valuation of $2.7 billion.
The company joins its prominent iBuyer competitors – Zillow Offers, Opendoor and RedfinNow – as a public company or a unit under a parent company.
- Article avaiable on Inman
IBuying and its close relative iFunding have captured an increasingly amount of attention, financing and market share in recent years, and bigger players are beginning to take notice. Rocket Cos., the parent of the nation’s largest mortgage lender has now jumped in the game. Rocket Homes, licensed as a brokerage in all 50 states, will provide discounted remote brokerage services with in-house salaried agents for those clients interested and refer those who are not to partner agents beginning in the fourth quarter; in addition, it offers clients discounts for using bundled affiliate services. The firm also announced it would launch an iBuyer program – using third-party partners. This might be the beginning of trend if a second mortgage player follows, and that appears likely.
- Article avaiable on Private Equity Wire
The presence of private equity in real estate is growing more prevalent. Over the last several years, private equity firms have acquired major real estate brokerage technology platforms – Lone Wolf Technologies, MoxiWorks, Inside Real Estate – which has led to acquisitions and consolidations in that category. And now they’re also going after brokerages and real estate brands – this acquisition brings one of the nation’s largest franchise brands under a private equity company. A private equity-backed company acquired fast-growing brokerage and franchisor JP and Associates Realtors in May 2021, and the nation’s 11th largest brokerage and budding franchisor At World (@properties/Ansley Real Estate and Nest Realty) is the result of a 2018 private equity acquisition of @properties.
- Article avaiable on Inman
The U.S. Department of Justice formally submitted a “statement of interest” in the active antitrust lawsuit from real estate broker startup REX Real Estate against NAR and Zillow Group. The suit alleges that Zillow Group’s application of a NAR rule that listings from MLSs and other sources be kept separate in property search results violates antitrust laws as it disproportionately harms firms with listings not in the MLS. In a motion to dismiss the suit, NAR and Zillow Group say a 2008 consent decree between NAR and the DOJ shows that the DOJ approves the “commingling” rule by NAR. In this August statement, the DOJ formally makes clear that it had never explicitly approved the NAR commingling rule and that the court should not take that statement in the motion to dismiss the REX lawsuit into account when ruling.
- Article avaiable on Bright MLS
Based on an analysis of single-family homes in its market sold on its MLS and those outside of it for 2019 and 2020, Bright MLS reveals that homes marketed on the MLS sold for a median of 16.98 percent higher than those not. The study also revealed that of the 442,829 sales identified in the market over the two-year time period, over a quarter (26 percent) were sold without MLS marketing. In addition to the price benefits sellers received when their homes were marketed through the MLS, the large percentage of off-MLS deals jumps out from this study. As iBuyers proliferate, they increase the number of homes sold outside the MLS as they often purchase homes from homeowners directly, and, in some cases, list the homes they have for sale through their networks. These, along with office exclusives – in which brokerages market listings internally instead of the MLS – has eroded the centrality of the MLS as a market’s complete source of listings. This study’s findings creates a powerful narrative as to the value of MLS.
- Article avaiable on Inman
A new Connecticut law, which will take effect in January 2022, limits the naming conventions real estate teams can use in the state. In addition to registering with the state and paying an annual fee, teams must use naming that does not suggest they’re a “business entity.” For example, the law prohibits suffixes “Group,” “LLC,” and “company.” This ruling could have wider ramifications for the industry as the size and power of real estate teams proliferates across the country. In some cases, it’s difficult for consumers to tell the difference between a team and a brokerage, and this law is intended to clarify to consumers the company behind the transactions they engage in. If this becomes a trend for other states, teams will have to bear a new fee and potentially accept a less independent position in branding.
- Article avaiable on Opendoor
Opendoor has launched a new referral program, Agent Access, in which the iBuyer will pay listing agents a referral fee equal to a 1 percent commission rate for sellers they refer to the company. To participate, agents make an Opendoor cash-offer request through the Agent Access portal and pay the referral when a sale closes. In addition, Opendoor incentivizes agents to participate by providing cash bonuses for the more listings (that lead to sales) they refer. A separate Opendoor referral program refers buyers and sellers to partner agents, who pay the iBuyer a 1 percent referral fee upon close. This new program represents another evolution in the iBuying business model as iBuyers look to expand their reach and revenue by partnering with agents to help expand their consumer base.
- Article avaiable on Inman
Inman News, the long-time leader of residential real estate industry news, has sold to private equity firm Beringer Capital. This is another sign of consolidation and corporatization of the residential real estate industry continues as yet another established industry entrepreneur sells a company. While he retains some equity through the deal, Inman News founder Brad Inman, who has been a leading source of industry insight and connection since founding his media company in 1996, undoubtedly now enters a more distant relationship with real estate coverage. Inman, and its growing competitor in the real estate media space, HousingWire, are now both owned by private equity.
- Article avaiable on Fannie Mae
Fannie Mae downgrades housing forecast After a torrid start to the year, the housing market may not see as big a 2021 boom as originally projected by some experts. Citing a continued dearth of inventory, constrained by homebuilding challenges, Fannie Mae has downgraded its 2021 home sales forecast from a 6.3 percent increase over 2020 to a 4.2 percent increase to 5.49 million single-family home sales. The economy, and real estate, continues to fly high, but inflation, higher prices, and homebuilding challenges, are beginning to emerge as the limiting reagents of the housing market. As these factors evolve, the outlook will undoubtedly shift further as the year progresses.
- Article avaiable on Inman
This month, Oregon passed a new law, which goes into effect throughout the state in January 2022, that requires real estate agents to reject the personal letters and sometimes photos that buyers, via their agent, submit along with their offers. This practice is fairly widespread in the industry and has become increasingly controversial in recent years as recognition grows that the act could contribute to discrimination based on race, family status or other details that comes through in these “love letters.” Oregon is the first state to pass the law, and others are expected to follow suit.
- Article avaiable on Vox
Watchdog group sues 36 New York agents and landlords for housing discrimination The New York watchdog group Housing Rights Initiative, after an eight-month investigation using testers, has sued 36 agents, brokers and landlords in New York state court alleging their activities led to housing discrimination. The investigation centered on alleged discrimination against Section 8 recipients. Race is not the only inequity real estate brokers, agents and leaders need to focus on. This investigation and lawsuit highlights another important element of diversity that the industry needs to focus on as well: discrimination against lower-income clients. This broad-based need to improve industry diversity is one of driving forces behind The Real Estate Apprentice Foundation, a nationwide nonprofit founded by T3 Sixty CEO Stefan Swanepoel, that aims to help people from underrepresented and underprivileged groups jumpstart real estate careers.
- Article avaiable on HousingWire
Now that its sale to private equity groups Stone Point Capital and Insight Partners is complete, CoreLogic is making moves, with the planned acquisition of closing services firm ClosingCorp. Many of the nation’s 25 largest lenders use the tool to help derive closing cost pricing. The deal is expected to close in the third quarter.
- Article avaiable on GeekWire
The market for iFunders – which provide financing solutions to homebuyers that go beyond the traditional mortgage – is hot! Flyhomes, which helps homebuyers make all-cash offers with short-term loans, launched in 2016 and has already raised $160 million in debt and equity financing. It now adds $150 million to the pot with this raise. Another iFunder, Homeward, which offers a similar service to homebuyers, raised $371 million in May.
- Article avaiable on US Department of Justice
On July 1, the U.S. Department of Justice pulled out of a proposed settlement with NAR related to its antitrust lawsuit against the trade organization announced last November. Under that proposed settlement, NAR agreed to make buyer agent compensation fees publicly available via MLSs, prohibit buyer’s agents from advertising their services as “free,” and make all properties listed on the MLS available to all licensed agents. NAR was still implementing those changes when the DOJ pulled out citing an interest in keep its ability to pursue future antitrust claims against NAR unfettered. This development, along with new U.S. Federal Trade Commission Chair Lina Khan, regarded as tough on antitrust issues, suggests that the DOJ is evaluating expanding or changing its existing lawsuit against NAR, or filing a new one. This, along with the existing handful of class-action antitrust lawsuits against NAR from homesellers and homebuyers, adds some weight to concerns about further legal actions that could significantly change how U.S. real estate has been practiced for decades.
- Article avaiable on TechCrunch
Alternative financing models, or iFunding, in which lenders provide innovative ways to streamline the homebuying process, have become extremely popular with investors, and startups. Accept.inc, which helps buyers submit all-cash offers after qualifying for a mortgage, is the latest iFunder to raise a large round. Just this May, another iFunder, Homeward, raised $371 million. Investors and startups are hoping these iFunding models will get traction and lead to simplified, speedier transactions, and betting big.
- Article avaiable on The Wall Street Journal
Global investment firm Blackstone Group has acquired Home Partners of America, which owns over 17,000 U.S. single-family homes that it rents out, for $6 billion. As home prices rise, more families are priced out or delayed in the ability to purchase a home, which will likely increase the demand for single-family rentals – that’s the bet Blackstone is making. Blackstone has deep experience with single-family rentals; it was a major owner of single-family rentals in the wake of the subprime mortgage crisis with its Invitation Homes business, which owned over 80,000 single-family home rentals. It divested in that business in 2019, but now it’s back.
- Article avaiable on Yahoo Finance
Mortgages have been an important source of ancillary revenue for residential real estate brokerages for decades and younger companies are beginning to jump all in. Compass, founded in 2012, has partnered with Guaranteed Rate to form a new joint-venture mortgage company OriginPoint, while eXp, founded in 2009, formed a joint venture with Kind Lending to establish Success Lending. Compass leverages a mortgage partner already with a presence in the industry, which allows it to jump in quickly to the mortgage space and ramp up production quickly. Realogy formed its own joint venture with Guaranteed Rate, Guaranteed Rate Affinity, in 2017, and it has contributed importantly to Realogy’s bottom line in recent quarters. Kind Lending, on the other hand, is itself a startup, having launched in just 2019.
- Article avaiable on Inman
MLS Now, which serves 13,800 subscribers in Ohio and West Virginia, is eliminating the “Coming Soon” status for listings as it found a significant portion of agents using the status primarily to market, and sell, listings before they went officially active in the MLS. This practice of marketing homes to encourage exclusivity, which the Clear Cooperation Policy aimed to curb, is still rife in many markets. Exclusivity persists, however, with agents using the office exclusive provision of the policy, and by agents making listings live in the MLS on Friday, but waiting until Monday to mark as active, which complies with the policy’s rules. MLSs will have to continue to monitor this premarketing activity and tweak their rules accordingly.
- Article avaiable on Inman
EXp Realty’s national brokerage footprint with a team-forward brokerage approach is attracting teams in droves. Inman dove into the trend, which T3 Sixty also analyzed in its 2021 Swanepoel Trends Report chapter “Real Estate’s Cloud-Based Brokerage Takes Flight.” As teams shared in this article, and as T3 discovered upon diving into the company’s business model and interviews with executives, eXp is growing by leaps and bounds because of its revenue-sharing model, in which agents earn a portion of the company revenue of agents they recruit, its equity plan, in which agents earn company shares based on different performance metrics and a borderless, office-less support network that facilitates collaboration and growth. Access the STR and other T3 research at T3 Intel.
- Article avaiable on Businesswire
HomeServices of America tapped company exec Christy Budnick, who has been CEO of president and CEO of Berkshire Hathaway HomeServices Florida Network Realty since 2018, to lead its franchise wing HSF Affiliates. In this role, Budnick will guide the brands Berkshire Hathaway HomeServices (BHHS) and Real Living. With a sales volume of $139.3 billion, BHHS was the nation’s fourth largest brand in 2020, according to the Real Estate Almanac. Budnick was the 193rd most powerful leader in real estate, according to the SP 200. She replaces No. 18 on the SP 200 ranking Chris Stuart, who left to lead Ben Kinney’s startup Place, which provides backend tech and support for real estate teams and agents.
- Article avaiable on Inman
RE/MAX has reached an agreement to acquire RE/MAX Integra’s North American franchise region, which includes 19,000 agents in the U.S. and Canada. The acquisition continues a yearslong strategy by RE/MAX to acquire large regions they do not already own. The is another bold step by REMAX as existing leaders in the industry push back against the strong growth from a slew of new franchisors and brokerages that are well-financed and expanding rapidly.
- Article avaiable on The Data Advocate
In a bold move a group pf MLS organizations have collectively through a new company, MLS Aligned, acquired the messaging and showing tool Agent Inbox . The group of five MLSs led is by Arizona Regional MLS with MLS Listings (Silicon Valley), UtahRealEstate.com (Utah), Metro MLS (Milwaukee, Wisconsin) and RMLS (Oregon). The acquisition indicates an effort by MLSs to own their own technologies following Zillow Group’s recent acquisition of the popular MLS showing service ShowingTime.
- Article avaiable on Inman
ZipLogix, the forms software provider that was founded and run by a California Association of Realtors subsidiary until 2019 when Lone Wolf Technologies acquired it, will see its Realtor association connection terminate at the end 2021. NAR, which began offering parts of the technology as a member benefit in 2015, has decided to no longer offer it to members after spending $62 million over six years to provide this technology to members. When NAR’s support ends later this year, forms and transaction software will now compete on equal footing in markets across the U.S., which will open up the forms and transaction management technology markets a bit wider.
- Article avaiable on TechCrunch
Homeward, which operates in Texas, Colorado and Georgia, helps streamlines moves for homeowners looking to buy a new home with iFunding, a twist on iBuying in which companies streamline transactions with alternative financing models. The startup purchases the next home homeowners want and then leases it to the homeowners until they sell the home they are moving from. At the same time, Homeward offers the homeowner a guaranteed base price for their previous home, which they list on the open market. The company charges a fee for this service and gives a credit to the client if they use the company’s mortgage. Realogy’s RealSure program, which operates in a similar fashion to Homeward, recently expanded to five additional markets, and Offerpad, another iFunder, has announced plans to go public.
- Article avaiable on Realtor Magazine
NAR membership soared to 1.48 million at the end of 2020, an all-time high and up from 1.4 million at the end of 2019. The surge in membership reflects a hot market and a surge in people looking for flexible work opportunities during a pandemic-disrupted year.
- Article avaiable on Yahoo Finance
Invesco Real Estate has committed to investing up to $5 billion in single-family rental homes over the next three years, and represents an increased focus by institutional investors on residential real estate. Currently, 2 to 3 percent of the nation’s single-family rentals are owned by institutional investors versus half of the nation’s multifamily units. That gap could narrow, however. If institutional investors appreciably increase their single-family home market share, as all indicators show they might, the brokerage industry will have to adapt to accommodate the new sector. Their increasing presence also influences macro housing trends, which will affect homeownership, home demand and affordability – all key housing issues now.
- Article avaiable on The Orange County Register
After 43 years with the California Association of Realtors, including 32 years as CEO, Singer has announced he’s retiring at the end of the year. Singer led the nation’s largest state association with savvy and an aggressive, innovative bent. He played a key role in the development of popular real estate form software zipLogix, which CAR’s for-profit subsidiary Real Estate Business Services developed (Singer led REBS as CEO as well for many years). In the annual ranking of the industry’s most powerful leaders, the SP 200, ranked Singer among the most powerful association execs in the industry since it launched.
- Article avaiable on Inman
Cairn Real Estate, run by Chairman and CEO Rick Davidson, and backed by private equity firm Aperion Management has a goal to acquire brokerages companies and build a new national real estate enterprise. Its first major acquisition occurred in May when Cairns acquired the brokerage JP and Associates Realtors together with the fast-growing JPAR franchise. Davidson previously served as president and CEO of Century 21 from 2010 to 2017.
- Article avaiable on Street Insider
Another example of the power that the public markets gives companies – Fathom Holdings, public company parent of agent flat-fee brokerage Fathom Realty, acquired E4:9 Holdings, which has mortgage, insurance and marketing subsidiaries. Fathom will use the acquisition to build out its ancillary services.
- Article avaiable on The Real Deal
As Robert Reffkin said during the T3 Summit, going public is just a financing event, one that gives a companies the resources to invest in growth and scale. Acquisitions such as the one Compass made in digital transaction management startup Glide Labs in April represent an example of this. Compass has long marketed itself as a tech company, and it has leveraged its financing to make that story a reality with acquisitions of promising real estate tech startups like Glide, title startup Modus and popular CRM provider Contactually.