Where Real Estate Gets Its Dirt

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.

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