Businessmodel of Realogy

Customer Segments

Realogy provides a range of real estate brokerage and relocation services to a variety of customer segments. The Company’s clients can be organised into the following categories:

• Real Estate and Institutional Clients, including real estate companies, affinity groups, and financial institutions to which the Company provides title and settlement services, as well as certain brokerage services;
• General Consumers, comprising home buyers and sellers across various consumer demographics, to which the Company provides real estate brokerage services; and
• Commercial and Corporate Entities, including corporate and commercial operators across multiple sectors, to which the Company provides relocations services. Realogy primarily serves customers in its domestic market of the US, which accounts for the majority of the Company’s revenue. The Company also serves an international customer base, with its real estate franchise systems operating in 110 countries and territories in North and South America, Europe, Asia Pacific, Africa, and the Middle East.

Value Propositions

Realogy provides value to its customers in the following ways:

• Its broad portfolio of services, with the Company offering a wide range of real estate services to corporate, institutional and individual customers, including brokerage services, relocation services, and title and settlement services;
• Its franchise network, with the Company operating a broad network of franchisees, including approximately 6,000 brokerage offices in the US and approximately 256,800 independent sales associates worldwide;
• Its international reach, with the Company providing services to a broad international network of customers, with operations across 110 countries and territories in the Americas, Europe, Asia Pacific, Africa, and the Middle East;
• Its industry expertise and experience, with the Company employing an extensive network of real estate professional across its operating segments, as well as a team of experienced industry executives. ### Channels

Realogy operates a website at www.realogy.com, through which it provides information on its various services, franchise brands, and operating locations. The Company’s various franchise brands have their own separate websites, including www.coldwellbanker.com and www.zaplabs.com. Many of these franchise websites provide online customer portals that allows clients to access certain online tools and services.

Realogy is the largest franchisor of residential real estate brokerages in the world, serving customers through its portfolio of well-known brokerage brands, including Century 21, Coldwell Banker, Coldwell Banker Commercial, ERA, Sotheby’s International Realty, and Better Homes and Gardens Real Estate. At 31st December 2015, the Company’s real estate franchise systems comprised approximately 13,600 offices worldwide in 110 countries and territories, 6,000 brokerage offices in the US and approximately 256,800 independent sales associates worldwide, including approximately 181,500 independent sales associates operating under the Company’s own in-house franchise and proprietary brands.

Realogy operates its own real estate brokerage business, with a network of offices across the US. It also provides services through its dedicated relocation, and title and settlement service teams, which deal directly with the Company’s corporate and institutional clients.

Customer Relationships

Realogy does not directly provide services to its customers on a self-service basis. The Company, however, operates an extensive portfolio of franchise brands, which individually offer certain online services to customers that allow them to manage certain aspects of the sale or purchase of residential real estate.

Realogy also provides services directly to customers through its in-house brokerage operations, working directly with clients to assist them in the buying and or selling of homes. The Company also directly serves its corporate and institutional clients, providing tailored settlement and relocations services that are designed to meet the individual needs of each customer.

Realogy provides personalised customer assistance throughout the delivery of its services to customers, with dedicated staff available to provide responses to queries and concerns. The Company can also be contacted directly with general enquiries either over the phone or online. Additionally, the Company, and its various franchise brands, also provide a range of online resources to customers, including guides and media.

Realogy is also able to interact directly with customers and keep them updated with corporate developments through its social media accounts, including with Twitter and Facebook.

Key Activities

Realogy is an integrated provider of residential real estate services in the US and internationally. The Company is the largest franchisor of residential real estate brokerages in the world. Realogy organises its operations into four reportable business segments: Real Estate Franchise Services, which operates a network of real estate franchise brands around the world; Company Owned Real Estate Brokerage Services, which operates a full-service real estate brokerage business; Relocation Services, which provides employee relocation services to corporate clients; and Title and Settlement Services, which provides full-service title and settlement services to real estate companies and affinity groups.

The Company’s operating platform is supported by its portfolio of industry franchise brokerage brands, including Century 21, Coldwell Banker, Coldwell Banker Commercial, ERA, Sotheby’s International Realty and Better Homes and Gardens Real Estate. It also owns and operates Corcoran, Citi Habitats and ZipRealty brands.

Key Partners

Realogy works in close partnership with a broad network of companies and organisations, that support the Company’s various operations. These partners can be categorised broadly as follows:

• Supplier and Vendor Partners, including suppliers of services, technologies, and equipment that support the Company’s enterprise-wide operations, as well as companies to which certain functions can be outsourced;
• Franchise and Channel Partners, including the Companies broad network of franchise partners and independent agents, which provide services on the Company’s behalf;
• Joint Venture Partners, including various brokerage and real estate business with which the Company jointly provides products and services through mutually owned entities;
• Strategic and Alliance Partners, including market leading companies and organisations across multiple business sectors, with which the Company collaborates on joint projects, including marketing and branding efforts. Realogy has launched a number of partnerships in recent years. This includes a marketing partnership with HomeAway Real Estate, a tie-up with eNeighborhoods to develop a national internet data exchange solution, and a partnership with with the National Association of Gay and Lesbian Real Estate Professionals.

Key Resources

Realogy’s key resources are its trademarks and intellectual properties, its network of franchise brands and franchisees, its IT and communications infrastructure, its in-house sales and service network, partnerships, and its personnel.

Realogy owns a number of trademarks that are key to its operations, including those of Century 21, Coldwell Banker, Coldwell Banker Commercial, ERA, as well as related trademarks and logos. All of the Company’s material trademarks are registered, or have applications pending, with the US Patent and Trademark Office, as well as with corresponding trademark offices in major countries worldwide.

Realogy also owns a number of physical properties which are key to its activities, notably its network of offices.

Cost Structure

Realogy incurs costs in relation to the management of its franchise network, the development and maintenance of its IT and communications infrastructure, the operations of its in-house sales channels, the implementation of marketing and promotion campaigns, the procurement of professional services, the management of its partnerships, and the retention of its personnel.

In 2015 Realogy recorded total costs in the amount of $5.42 billion. This included commission and other agent-related costs totaling $2.93 billion, operating expenses totaling $1.46 billion, and general and administrative costs totaling $337 million.

Revenue Streams

Realogy generates revenue through the provision of real estate brokerage services, relocation services, and the operation of a franchise network. The Company derives revenue primarily on a fee-for-service basis, generate fees from multiple aspects of a residential real estate transactions, as well as in the form of royalties received under long-term franchise agreements.

In 2015 Realogy generated net revenue for the year of $5.71 billion, up slightly on the $5.33 billion recorded by the Company in 2014. The majority of the Company’s revenue was derived in the form of commission fees, with the Company recording gross commission income of $4.29 billion for the year.