A Consumer Brand Crashes the Party

Historically, introducing a new brand from outside the residential real estate brokerage marketplace has been difficult, and considered by many as very unlikely due to the fragmented, hyper local, and highly personal nature of the industry. With growing consolidation in the industry and the increased addition of systems and technology, the previously held limitations on building a brand no longer apply. Over the past decade, Realogy has proven that it is feasible to take certain “outside” brands such as BH&G and Sotheby’s and successfully introduce them into residential real estate franchising. Warren Buffett has proven that a completely unknown brand in the residential real estate industry such as Berkshire Hathaway can be introduced and built into a new powerhouse.

It would not be a stretch for home improvement giants Home Depot ($133 billion market cap; $79 billion in annual sales) and Lowe’s ($70 billion market cap; $55 billion in sales), to expand into the residential real estate brokerage business. One example would be to take the model that Lowe’s has, assisting REALTORS® in providing marketing benefits and finding savings for their clients, and expand it into an online lead generation service model. A second example would be to take Lowe’s existing partnership program with construction and repair vendors and expand it into a type of DIY real estate model, while a third option could be to acquire a successful existing global real estate brand such as RE/MAX. Other interesting possibilities could include banks or HGTV. They already have a recognizable brand in the financial or home lifestyle markets and can expand into, partner with an existing company to create, or leverage a new real estate brokerage brand. However, while the dollars are always enticing, the fragmented and byzantine structure of the industry goes against the nature of these organizations.