Where Real Estate Gets Its Dirt

Zillow acquires StreetEasy for 50 Million in cash.

Zillow to Acquire StreetEasy, New York’s Leading Real Estate Website

“StreetEasy attracts nearly 1.2 million1 monthly unique users, primarily home shoppers in the New York region. This acquisition gives StreetEasy the resources to further invest in product development and grow its audience, while offering Zillow® clear market leadership in the country’s largest and most important real estate market.”

Earlier this year we had heard the Zillow wasn’t planning any acquisitions in 2013, I guessed they changed their minds. With the recent stock run up, who can blame them. No mention of any significant revenue’s from StreetEasy.

And speaking of Zillow stock, they are offering 5 million Class A shares. Looks like 2.5 Million of them are coming from Zillow’s CEO Spencer Rascoff, Rich Barton and Lloyd Frink. Nice payday.

Why Move, Inc. bought Doorsteps.

doorsteps_logo_410x295
Move Inc. Acquires Doorsteps

“Doorsteps educates and empowers buyers in a well-designed, visual and streamlined way to equip them for home ownership from start to finish. It provides a shared online workspace between buyers and agents, resulting in smarter lead generation and matching. Connecting people with loan officers early in the buying process ensures they can guide clients to the best loan options and financial services to help them — well before closing on a home.”

Seems like this is more of an “acqui-hire”, and a damn smart one. Some might find it a bit counter-intuitive to buy a company focused on buyers in a red-hot sellers market but I think there is a larger trend here. The trend is design.

Doorsteps is beautifully designed. And when I speak of design I’m not talking about how the site looks (which is beautiful BTW) but how the mission of the company flows through their entire app. Design is becoming more and more important to consumers now. Apple has led the way in this, people just don’t want a product to work, but they want their products beautiful and easy to use.

When you look at the recent changes that MOVE, Inc. has been making (new logo, site design, etc.) you can tell that design is becoming a big focus. The question is will they be able to make these changes more than skin deep.

Congrats to Michele Serro and her great team at Doorsteps and Move, Inc. Things are getting super interesting in this space and I can’t wait to see what this infusion of talent will bring to Realtor.com.

Warren Buffet gives shout out to Ron Peltier of HomeServices

Some interesting tidbits from Warren Buffet’s annual letter to shareholders.

Letter to Shareholders, Warren Buffet.

“Since then, however, the company has regularly added residential brokers – three in 2012 – and now has about 16,000 agents in a string of major U.S. cities. (Our real estate brokerage companies are listed on page 107.) In 2012, our agents participated in $42 billion of home sales, up 33% from 2011.

Earnings jumped from 39 million to 82 million. I told you Buffet was good for real estate.

Additionally, HomeServices last year purchased 67% of the Prudential and Real Living franchise operations, which together license 544 brokerage companies throughout the country and receive a small royalty on their sales. We have an arrangement to purchase the balance of those operations within five years. In the coming years, we will gradually rebrand both our franchisees and the franchise firms we own as Berkshire Hathaway HomeServices.

I wasn’t aware they could buy the remaining shares from Brookfield in 5 years.

Ron Peltier has done an outstanding job in managing HomeServices during a depressed period. Now, as the housing market continues to strengthen, we expect earnings to rise significantly.”

Significantly indeed. Interesting stuff especially when you put these facts against Stefan Swanepoel’s talk at Clareity’s Executive MLS Conference last week. Consolidation is becoming the norm in real estate.

RE/MAX acquires master franchise for Texas

RE/MAX Buys Master Franchise for Texas

“As of December 31, 2012, RE/MAX of Texas, with its 4,300 agents and 260 offices, becomes the 11th Company Operated Region owned by RE/MAX, LLC of Denver. Richard and Jeanne Filip, owners of RE/MAX of Texas since 1996, agreed to transfer ownership of the Master Franchise for the state of Texas, but remain the owners of several individual RE/MAX brokerages.”

This is big news, for several reasons.

“The last time RE/MAX, LLC added to its inventory of Company Owned Regions was in 2007, when it purchased the Master Franchise for three regions; RE/MAX California and Hawaii, RE/MAX Florida and REMAX Carolinas.”

If you bought a house in 2007, what do you think it’s worth now? More than likely, less (way less) then what you paid for it. Now imagine buying 3 real estate regions. Ouch! That gives you some clue to the struggles RE/MAX have been going through the past several years. That being said with this acquisition it seems they have turned the corner and are ready to go on the aggressive. Maybe Dave has gotten his mojo back.

HotPad’s secret weapon.

Jamie Clymer
News came out yesterday that Zillow acquired HotPads for 16 million. This brought a smile to my face because I knew one of the key players at HotPads, Jamie Clymer. I met Jamie at Dominion Enterprises (the owners of Homes.com) after my company eNeighborhoods was acquired by them. Jamie’s last role was as GM/VP of Homes.com and Agent Advantage (their agent website products). After a brief stint at Rentals.com he made the move to the West Coast to join HotPads as their GM and Vice President in San Francisco.

This dude is incredibly talented and smart and knows both the residential and rental portal space cold.

Acquisitions are made for various reasons but the key thing is putting together the right team. Jamie has the knowledge, experience and talent in this space to make things happen. This could make him HotPad’s Zillow’s secret weapon.

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