Real-REMAX deal: “More for the masses, not for the higher segment”
The real estate industry is buzzing after The Real Brokerage announced its acquisition of REMAX, a deal that industry observers say is both a sign of the continued consolidation pressure squeezing brokers and a fundamental shift in the way brokers want to do business. But not everyone sees the merger as a threat. For some it is an opening.
Boutique firms don’t worry about it
It was announced on Monday that The Real Brokerage, Inc. had agreed to acquire REMAX Holdings, Inc. in an $880 million deal expected to close in the second half of this year. The merger would place Real among the top three real estate companies in terms of size, behind only Compass International Holdings and Keller Williams.
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The deal would combine Real’s 33,000 agent base with REMAX’s franchise network of approximately 145,000 agents. It would create a combined force of more than 180,000 officers across 120 countries and territories, including more than 100,000 in the US and Canada. Together, the companies said they would support approximately 1.8 million transaction parties worldwide by 2025.
Lisa Simonsen, a luxury real estate agent with Brown Harris Stevens licensed in New York, Florida and California, says the deal has little impact on her world. It may even send more customers her way. “Bigger is not necessarily better in luxury real estate,” Simonsen told Inman. “A merger like this is more for the masses, not for the higher segment.”
Simonsen also pushed back on the technology narrative that often accompanies mega-mergers in the real estate sector. While technology has become an important recruiting tool for major real estate agents, she said it is particularly attractive to newer agents, rather than the seasoned professionals who handle luxury transactions.
“Really strong agents don’t necessarily need all the high tech,” she says.
For Simonsen, the ownership structure is the most compelling differentiator. Brown Harris Stevens is a privately held company and she sees that as a meaningful distinction. “We are accountable to our customers, but these huge brokers are accountable to the shareholders,” she said.
She also wondered whether massive scale translates into better outcomes for sellers. “The question for sellers is not how big a real estate agency is,” she said. “The types of marketing we do are completely different than what these big companies can do.”
Simonsen turned to a personal analogy that required a minor correction. She remembers growing up near Canada’s West Edmonton Mall, which once claimed the title of the world’s largest mall before being surpassed by developments in Asia and the Middle East.
“I didn’t spend much time there,” she said. “These types of big mergers and brokerages are similar. They may be big companies, but that doesn’t necessarily mean they’re for everyone.”
Her conclusion: the deal is a net positive for boutique companies. “I think this merger changes the competitive industry landscape, but it is positive for us,” she said. “More people will be looking for a boutique company like ours.”
‘A very good decision for both companies’
Briggs Elwell, co-founder and CEO of RLTYcohad a different approach. He wasn’t surprised by the deal, and he thinks it makes a lot of sense for both parties.
“Real has become a leader for agents who are their own company,” Elwell said Inman. “REMAX has a franchise business model, so a merger makes a lot of sense. It was an incredibly good decision for both companies.”
Elwell noted that the combination fills the gaps that each company had separately. REMAX recently completed an intensive rebrand, but Real brings a full back-end technology platform that franchise models have historically lacked. “There has been a lot of merger and acquisition activity, and what is good for brokers is what is good for consumers,” he said.
He also pointed to the market environment as a driving force. With deal volume at an all-time low, margins have tightened and agents may have fewer tools at their disposal. These are circumstances, Elwell said, that make consolidation both logical and necessary.
“What’s happening with all this consolidation in the industry is efficiency,” Elwell said. “It used to be that one brand drove all the deals in certain markets, but that has changed. There is a lot of fragmentation, which leads to inefficiencies. Consolidation is not a bad thing. Ultimately, the main goal is to get more attention to homes and more home sales.”
Lisa Nickerson, CEO of Infinityy, sees the merger as a necessary evolution for both companies. “Real Brokerage will gain the brand power and global reach it could not have built quickly enough on its own, and RE/MAX will have a modern operating system that it struggled to develop internally,” Nickerson told Inman.
However, Nickerson added that “this is still a broker-level solution to what is increasingly a consumer-level problem.”
“The real disruption in the real estate industry is not happening at the transaction,” she said. “It’s happening in the way people decide where to live. The next wave of winners will be the companies that own that decision layer, not just those that facilitate the deal.”
‘It’s not all doom and gloom’
As for why Real specifically was the acquirer, Elwell sees a philosophical alignment that goes beyond the financial aspects.
“I have always considered REMAX to be the best real estate brand in America,” he said. “Working at REMAX is much more like starting your own business. Real acts as a vessel for agents to run their own businesses, so it makes sense that Real has made this acquisition.”
Perhaps most notably, Elwell said the reception he’s heard about the deal has been almost unanimously positive, a rarity for headline-making industry shakeups.
“Major deals and mergers like this can be exciting and show energy in the sector,” he said. “Headlines like this are encouraging. They show that it’s not all doom and gloom. The feedback I’ve gotten so far? I haven’t heard a single negative thing.”
Update: This story was updated after publication with comments from Lisa Nickerson.
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