This development is pretty straightforward in some ways. Realogy is claiming more “shelf space” in the franchise market, and can now sell into areas it has saturated with its existing brands while also making inroads into new ones.
More interestingly, it’s possible that this is a harbinger of “boutique” franchises becoming a big thing.
Unlike Century 21, Coldwell Banker, or Better Homes and Gardens, neither Climb nor Corcoran has mass consumer awareness. Their value lies in having resonance with specific market segments and customer profiles.
They won’t work in as many places, and that’s the point.
Both Climb and Corcoran have strong leadership that will take the reigns of the franchise effort. This was a good call. Bifurcating management at the top works great for, say, Coldwell Banker (Charlie Young as the franchise brand CEO; Ryan Gorman as CEO of company-owned operations), but the Climb and Corcoran franchises require a more unified story, at least in the beginning.
Anyway, this was a smart play by Realogy. It will be fun to watch this develop.
A couple things popped up on Inman recently that highlight something that’s been bothering me:
I see this as companies with new models throwing around money to encourage consumers to do stupid stuff. It’s happening more and more.
Like buying a home without representation. Or hiring an agent with tangled incentives.
Dual agency and in-house deals have always been one of the most questioned elements of the traditional model. It kinda sucks that some new companies are wading into this mire.
I thought the consumer was supposed to win in all of this “disruption” stuff.
Real estate is special because it’s an emotional transaction. I believe that and you probably do too.
But what if software becomes emotionally intelligent?
Check this out:
Compass has taken roughly $200 million of Saudi Arabia’s money. I think this is gross.
But I also won’t question the character of Compass’ leaders because of this. They’re raising capital, building a company and, after all, sit a couple degrees removed from a direct relationship with the Saudis.
I do think that Reffkin and Co. would realize more than $200 million in goodwill and long-term brand equity if they gave the money back, though.
That might be both the right thing and the smart thing to do.
Earlier this year, Remax bought Booj, a company built by providing websites and software exclusively to independent brokerages. This acquisition has been positioned by Remax as the linchpin of its new technology strategy.
Or independent-ish, I guess. Long and Foster was acquired by HomeServices of America last year. HomeServices also has a national franchise brand. And many of Windermere’s offices are franchised.
Nothing wrong with any of this, of course, and these are all great companies, but it underscores two things:
- The line between “independent” and “franchised/corporate” that has run more or less down the middle of our industry for years is becoming increasingly blurred (the Corcoran and Climb announcements above play into this too). This will change how real estate companies position themselves, and think about competition.
- The real estate brand “platform war” seems like a bit of a charade. Executing a technology strategy in this business is like trying to cut a hole in fog. Vision, investment, in-house tech… it mostly just dissolves into the reality that brokers and agents are going to do whatever they want anyway. Remax buys a software company and one of its franchisees licenses a tech platform owned by a bunch of competing brokerages? Yeah, that’s how real estate rolls.
Makes perfect sense, right?
I have been told by some of my younger colleagues that fanny packs are now cool again. I really have a problem with this. Some things just aren’t worthy of nostalgia, let alone revival.
But I am not a tastemaker. I don’t decide these things. I just need to adapt if I am to maintain my cultural relevance.
So I was super relieved to find an age-appropriate way for me to hop on this trend. Behold, if you will, the Dad bag.
Enjoy the weekend.
[Disclosure: Realogy is a 1000watt client, though we had no involvement with the Corcoran or Climb initiatives.]