Growing real estate brokerage firm HomeSmart announced Wednesday that it bought PalmerHouse Properties, an Atlanta-headquartered brokerage that has about 2,000 agents.
Reached Thursday, HomeSmart President Ashley Bowers declined to say what the company paid for PalmerHouse.
PalmerHouse racked up $3.1 billion in 2020 sales volume from 9,904 transaction sides, and it ranks as a “top 10 brokerage in the Atlanta area,” according to data provided by HomeSmart.
PalmerHouse also has offices in Florida, Tennessee, Missouri, North Carolina, and Alaska.
PalmerHouse is the biggest acquisition in HomeSmart’s 21-year-history, as judged by agent count, and Bowers said it could serve as a “secondary hub” for the company.
Diversification is one approach brokerages can adopt to help ensure stability in unavoidable times of uncertainty, work to protect their revenue and – ultimately – financially weatherproof their business.
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But HomeSmart, which has a flat fee model, has already been quietly growing.
“We’ve benefited from the consolidation and VC money being put into the industry,” Bowers said, noting that independent brokerages feel pressure to merge with bigger players to survive.
The top brokerage in Phoenix by market share, HomeSmart tallied $13.4 billion in overall 2019 sales volume, according to RealTrends, ranking 8th among all U.S. brokerages. That figure does not include franchise affiliates in Irvine, California; Salem, Oregon and Warwick, Rhode Island that each hover around $1 billion in annual sales volume.
Matt Widdows founded HomeSmart in 2000, and he remains in place as the company’s CEO.
HomeSmart generates revenue from a flat $300-$495 fee that agents pay the brokerage per transaction, Bowers explained. Agents also pay a $25-$149 monthly fee, which includes use of HomeSmart’s proprietary tech platform and physical office space in various markets.
Prior to the PalmerHouse purchase, HomeSmart bought TriStar Realty in December 2019, a brokerage that featured 650 agents in the Washington, D.C. area.
HomeSmart plans to continue an “aggressive acquisition strategy,” Bowers said. Bowers said the brokerage has no plans in filing to go public or raising venture capital.