Real estate consolidation

Over the past few years, consolidation has been somewhat common among real estate offices.

We’ve seen that regularly in Arkansas. For example, Rector Philips Morse bought Coldwell Banker Advantage Realty a few years ago, thus forming Coldwell Banker RPM. The Griffin Company in Northwest Arkansas became part of the Weichert Realtors group, as did Downum Realty in Springdale.

We’ve seen, in short, a good number of both smaller private offices and larger ones merge with other real estate companies. The reasons are fairly evident – there are resources and economies of scale that go along with being part of larger companies.

That same logic applied in at least one case with three Realtors boards in Northwest Arkansas. On Feb. 2, the members of the Metro Area Board of Realtors – which covered Washington County, the western half of Benton County and most Realtors in Madison County – voted to take in the Bentonville-Bella Vista Board of Realtors and the Rogers Board of Realtors.

The result? The Metro Area Board is now the largest in the state with around 1,500 members. The second-largest board in Arkansas is now the Little Rock Realtors Association – which covers roughly the southern half of Pulaski County – with about 960 members.

Jody Hendrix, president of the Metro Area Board, said the merger was discussed for years and said members of the new entity should benefit from (you guessed it) economies of scale. He said members of that board should receive a dues decrease and the number of services offered will not be reduced.

Furthermore, he said the move makes sense in light of the emergence of Northwest Arkansas as a region.

“We really are a region now rather than individual cities,” Hendrix said. “We really, over the last several years, started to see an overlap.

He said Realtors in northwest Arkansas now routinely conduct business in both Benton and Washington counties and having one board is a way to offer them the chance to attend the same board events and get to know each other socially.

Hendrix said consolidation has been taking place on at least one level for years. Realtors in both counties have shared a common multiple listing service (MLS) – the database in which agents post homes for sales – for years. A fragmented MLS wouldn’t make much sense in Northwest Arkansas, he said, as real estate agents in, say, Washington County routinely represent buyers who want to purchase properties in Benton County and vice versa. Having listings in separate MLS systems wouldn’t be efficient for buyers or sellers.

It’s worth mentioning that the MLS in Northwest Arkansas – Arkansas Regional MLS – extends to Carroll, Crawford and Sebastian counties, too. The same is true of Cooperative Arkansas Realtors MLS, which covers central Arkansas and extends as far west as Polk County, as far east as Greene County, has expanded to Clark County in the past few months and is geared up to take in more areas.

The long and short of it is that consolidation, in theory, makes sense financially for organizations and customers. How well consolidation works in practice is best analyzed on a case-by-case basis.