The real estate industry fosters dynamic competition among 85,000 brokerages who focus on growth though recruiting agents and acquiring companies. There are a few brokerages with business models that offer agents full commission (100%). Among those firms one breakout company is HomeSmart, who receives income on transaction fees. I had the opportunity to visit the HomeSmart operation in Phoenix a few years ago and remain impressed by their hub and spoke regional office configuration. All administrative staff are housed in the hub; agents have keyless entry into the satellite offices powered by SmartReception virtual receptionist technology. The SmartReception concept is worth checking out if you have not yet had the experience.
The last time we wrote about HomeSmart was in 2017 after they acquired Denver, Colorado based Cherry Creek Property with 1500 agents. The key challenge in converting a brokerage to HomeSmart is helping agents accommodate innovative change and rethink the roles of the agent and the brokerage. In HomeSmart’s case, they provide agents with a full suite of technology solutions (no technology fees), training, and coaching. Agents receive these benefits at no cost– but pay for transaction fees. Now they will be converting TriStar Realty, a firm serving Maryland, Virginia, and the District of Columbia. TriStar’s designated broker, Cindy Sinanan will stay on in that role.
This brings the agent count operating under the HomeSmart brokerage/franchise up to 18,000 across 190 offices in 35 States. Multiply the receptionist salary and benefit costs by
190 offices and you quickly understand how valuable savings adding with the SmartReceptionist concept. More importantly, this represents about 70,000 transactions based upon 2018 transaction reporting. It is pretty simple to do the math on broker revenue.
The company has a plan to double the number of agents by 2023. Looking back at our article from 2017, the company has grown from 15,000 agents then to 18,000 agents in 2019. A growth rate of 1500 agents per year. In 2017, they were reporting 53000 transactions to the 2018 level of 70,000. It will be interesting to see if they are able to hit their target of reaching 36,000 agents over the next three years. There is a big difference between adding 1500 agents a year and 12,000 agents a year. They have made some management changes over the past two years to facilitate this growth. From our perspective, this level of growth will pivot around acquisitions for growth unless they have crafted a way to recruit and retain agents at a much higher rate than their historical rate over the past two years.
If you have met Matt Widdows, founder and CEO of HomeSmart, you know that he is an asymmetrical thinker and impassioned leader. He has an unwavering belief that his brokerage business model and executional strategy position the company for success. This differs significantly from many other growth companies like Compass, Howard Hanna, or HomeServices of America who place their growth success around the development of office managers and regional managers. Agents at HomeSmart support each other in the office.
Full press release follows.
HomeSmart’s Newest Acquisition Catapults National Network to Nearly 18,000 Agents Across 35 States
SCOTTSDALE, Ariz. ⎼ HomeSmart, recognized by Real Trends 500 as a top 5 residential real estate company in the United States, has acquired Mid-Atlantic brokerage TriStar Realty, Inc. and its more than 650 agents. This deal brings HomeSmart to three new territories for the brand: Maryland, Virginia and the District of Columbia. Its nationwide network is approaching 18,000 agents and its footprint increased to 190 office locations across 35 states. Already lauded for its national growth, HomeSmart ranks in the Entrepreneur Franchise 500, Swanepoel Power 200 and the Inc. 5000 fastest-growing private companies.
“HomeSmart is the only brokerage in the country with the right foundation and system of people, processes and technology to allow growth at this rate,” said Matt Widdows, HomeSmart’s founder and CEO. “In less than two decades, we’ve scaled our model to 35 states. Expect a similar trajectory in 2020.”
In addition to its acquisition activity, HomeSmart continues its growth across its thriving network. The company was ranked on the 2019 Inc. 5000 list of fastest-growing companies across the U.S. and is going on its seventh year with the Hall of Fame designation, recognized amongst only 1.64 percent of companies on the list to achieve such ranking.
Combined national performance for HomeSmart, its franchises, and TriStar Realty, Inc. in 2018 was more than 70,000 in closed transactions.
HomeSmart is deploying a skilled support team during the conversion in Maryland, to ensure continued growth for the company, without wavering from the high standard of excellence HomeSmart is known for in the industry. TriStar Realty’s designated broker, Cindy Sinanan, will stay in that role as an integral part of the Mid-Atlantic team, following HomeSmart’s acquisition.
“HomeSmart’s commitment to its agents is unparalleled,” said Sinanan. “I’ve worked with our agents in this region for 15 years, and I’m so excited to introduce them to HomeSmart’s technology, training, and resources that will allow them to better serve home buyers and sellers in the Mid-Atlantic.”
All agents will continue to have access to the current offices in Silver Spring, Bowie, Columbia, and Waldorf. HomeSmart will be updating these locations to be equipped with state-of-the-art conference rooms, computers, and SmartReception virtual receptionist technology. Agents will also have access to HomeSmart’s unmatched end-to-end proprietary systems and technology.
“Technology sets us apart,” said Widdows. “Our centralized, integrated platforms free up time for our brokers and agents at no additional cost. This allows them to focus on their real estate business, which benefits everyone involved in the sale or purchase of a home.”
The acquisition of TriStar Realty comes ahead of HomeSmart’s 20th anniversary and as part of an aggressive growth plan to double the company’s agent count in the next three years.
“Expansion to this region of the United States has been a key objective for some time,” said Bryan Brooks, HomeSmart International senior vice president of franchise sales. “Our model performs at a higher rate than any other in the industry and rigorously captures operational data to back it up. It continues to be proven in our other corporate locations in Phoenix, Denver, Palm Springs, and Florida but has also been demonstrated to be an effective model for profitable growth with our franchisees across the nation.”
About HomeSmart International:
Founded in 2000 by entrepreneur Matt Widdows, HomeSmart International quickly became the fastest-growing real estate brokerage firm in Arizona and still holds that distinction today. HomeSmart International is ranked in the top 5 real estate brokerages in the United States, and was recently ranked as the number one brokerage firm in the Metropolitan Phoenix market and Colorado. From its international franchising headquarters based in Scottsdale, HomeSmart International began franchising in 2010, and continues to grow by offering franchisees efficiency and innovation coupled with the systems and technologies necessary to succeed in today’s evolving real estate industry. Today, the brand has more than 190 offices in 35 states and nearly 18,000 agents nationwide. For more information on HomeSmart and its franchise opportunities, visit http://www.homesmart.com/. Follow HomeSmart International on Facebook at www.facebook.com/homesmartfranchise, on LinkedIn at https://www.linkedin.com/company/homesmart and on Twitter and Instagram @HomeSmartIntl.
Contact: Tori Sokol December 4, 2019 Phone: (602) 889-2239