Realogy reported a loss of 32 cents for the first quarter, considerably more than the loss of 19 expected.The company owns multiple brands that include Century 21, Coldwell Banker and Better Homes and Gardens Real Estate—three of the largest real estate brokerage companies out there. They also operate a significant title business and a relocation service.
For the most part, companies like Realogy make their money on commissions. The amount of those payments depend on two factors: 1) the amount of transactions originated, and 2) the price of the home, since the commission is a percentage of that amount.
In the first quarter, the average sales price was up 13 percent, but transactions were down 3 percent. What happened? The company cited difficult credit standards (which hurt transactions) and low inventory levels (which led to higher prices).