Scottsdale, Arizona-based brokerage will proceed to function below the My Dwelling Group model, with co-founders Jereme Kleven and Mark Hutchins staying on to supervise day by day operations.
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Fathom Realty is onboarding 2,200 brokers and rising its agent rely by shut to twenty % with the acquisition of the third-biggest actual property brokerage in Arizona, My Dwelling Group.
In asserting the deal Monday, Fathom Holdings Inc. mentioned brokers on the brokerage will proceed to function below the My Dwelling Group model, with co-founders Jereme Kleven and Mark Hutchins staying on to supervise day by day operations.
Jereme Kleven
“Our merger with Fathom is a major milestone in accelerating business development for our agents and organization,” Kleven mentioned in a assertion. “It aligns perfectly with our core values, empowering agents to expand rapidly and gain access to enhanced technology, a deeper leadership bench, and revenue sharing to significantly shortening their path to success.”
Phrases of the deal weren’t introduced, however Fathom’s administration mentioned extra particulars can be supplied Thursday when the corporate stories third quarter earnings.
Shares in Fathom Holdings, which within the final yr have traded for as little as $1.32 and as a lot as $4.33, had been altering arms Monday for $2.50 to $2.60 — little modified from Friday’s closing worth of $2.55.
Like different actual property brokerages, Fathom Realty noticed gross sales dented as mortgage charges climbed to post-pandemic highs final yr. However the Cary, North Carolina-based brokerage has continued to develop its agent rely, providing flat-fee agent fee plans and incentives geared toward boosting agent recruitment and retention.
Fathom rising agent rely
Supply: Fathom Holdings investor presentation.
In the course of the second quarter, Fathom boosted its agent rely by 12 % from a yr in the past, to 12,224. The My Dwelling Group deal will develop Fathom Realty’s agent rely by a further 18 %, to 14,500.
Marco Fregenal
“Arizona’s real estate market presents significant opportunities, and My Home Group’s agent-focused approach aligns seamlessly with Fathom’s culture,” Fathom Holdings CEO Marco Fregenal mentioned, in an announcement. “This acquisition strengthens our Southwest expansion, amplifying our presence in key markets and advancing our vision of sustainable, nationwide growth. Together, we will build a powerful network serving agents, clients, employees, and communities.”
Fathom Realty planning to be in all 50 states
Supply: Fathom Holdings investor presentation.
Along with its flat-fee agent fee plans, Fathom says its in-house know-how platform, integrating residential brokerage, mortgage and title insurance coverage, offers it an edge over rivals because it seeks to increase.
Whereas its actual property brokerage enterprise, Fathom Realty, generates most of Fathom Holdings’ revenues, the corporate’s different manufacturers embody Embody Lending, Verus Title and intelliAgent.
On Fathom’s Q2 earnings name with funding analysts, Fregenal mentioned Fathom Realty plans to be working in all 50 states by mid-2025.
“Probably the biggest states that we’re not in are New York and Pennsylvania, but Pennsylvania actually is open already,” he mentioned. “New York will probably be open within the next 60 days. And then after that, we’ll cover the rest of the country. We’ll probably expand into Canada sometime next year as well.”
Though Fathom posted a $24 million 2023 internet loss and racked up an gathered deficit of $78.8 million via June 30 of this yr, the corporate has trimmed its losses to $7.2 million through the first half of the yr, together with a $1.3 million Q2 loss.
In September, Fathom Holdings raised $5 million to pursue progress plans, issuing senior convertible notes to an present investor who owns greater than 5 % of the corporate’s frequent inventory and to board chair Scott Flanders.
The brand new funding was introduced lower than two weeks after Fathom introduced that it will pay $2.95 million to settle claims made by homesellers within the Sitzer | Burnett fee lawsuit and make modifications outlined within the Nationwide Affiliation of Realtors’ settlement.
Fathom was among the many brokerages and franchises that had been not included within the NAR settlement as a result of they racked up greater than $2 billion in 2022 gross sales quantity.
With $5.9 billion in 2023 gross sales quantity and 13,225 transaction sides, My Dwelling Group can be a member of that group, in response to information compiled by Actual Developments. The Scottsdale-based brokerage final yr ranked third in Arizona by greenback quantity and 4th by transaction sides, in response to Actual Developments.
Becoming a member of Fathom “gives us the scale we need to drive deeper growth in Arizona and the Southwest,” Hutchins mentioned in an announcement.
Mark Hutchins
“With Fathom’s technology, innovative commission plans, and dedication to agent success, we’re poised to elevate our impact and efficiency,” Hutchins mentioned. “This is a tremendous opportunity for both agents and clients, and we’re honored to join forces with the best in the business.”
