Real Estate One has deal to acquire Ann Arbor-based Charles Reinhart Company
In a move that will merge two of Washtenaw County’s top real estate brokerages, Real Estate One plans to acquire the Charles Reinhart Company, officials from both companies announced on Tuesday.
“It’s a great opportunity for us to expand, certainly, our footprint in Washtenaw County,” said Real Estate One President Dan Elsea. “Reinhart is a wonderful organization, so we’re pleased to have them part of our family.”
The Charles Reinhart Company was founded in Ann Arbor in 1971.
AnnArbor.com file photo
Elsea said the deal isn’t finalized yet, but employees of both companies were notified Tuesday morning. Financial details of the deal weren’t immediately available.
“We have signed a letter of intent,” he said. “We’ll do our mutual due diligence and hope to have a closing in the next four to six weeks.”
Founded as Elsea Realty and Investment Company in Detroit in 1929, Southfield-based Real Estate One now operates 54 offices across the state, including locations in Ann Arbor, Saline, Milan and Dexter. The company, which has 1,700 agents, also owns Max Broock Realtors and Johnstone & Johnstone Realtors.
Real Trends Inc. listed Real Estate One as the 30th largest broker in the U.S. based on 2012 closed sales volume. The company has consistently ranked as one of the four top brokerages in the Washtenaw County market.
Founded in Ann Arbor in 1971, the Charles Reinhart Company operates six residential sales offices, a commercial and property management division and a mortgage company. Reinhart has 250 agents and employees, and it has remained a leading real estate company in Washtenaw County since its inception.
Real Trends Inc. ranked Reinhart No. 196 on its list of top brokers in the U.S. based on 2012 closed sales volume.
Elsea said once the deal is finalized, Reinhart would be a division of Real Estate One, but keep its own brand and name. He said current management and staff will remain the same, as will the Reinhart and Real Estate One offices. Eventually, the merged company would open additional Washtenaw County offices, Elsea said.
“Our intent is to have two separate brands in the market: Real Estate One and Reinhart,” Elsea said.
“The current Reinhart owners, Dave Lutton, William Miller and Marsha Volchoff will be staying in their positions as well,” a news release says.
Lutton released the following statement Tuesday morning:
Reinhart has a 42-year history of excellence and deep community ties, and Real Estate One has an 84-year history of the same. Combining our resources makes us both stronger, while keeping our local roots intact. Reinhart will be an integral part of the fabric of Washtenaw County for many years to come. We will be gaining more technology, marketing tools, and educational opportunities for our sales associates. It’s an exciting time for us and the local real estate market.
The move comes less than a year after Pennsylvania-based Howard Hanna Real Estate Services merged with Ann Arbor’s Edward Surovell Realtors. At the time of the merger, Howard Hanna announced plans to grow its Michigan presence, including opening new offices in Washtenaw County and hiring employees across the state.
Washtenaw County has experienced rebounding home sales and increased sale prices as the economy improves. Home sales in the county increased 9.2 percent in 2012 over the previous year, while the average home sale price showed steady improvement for the fourth consecutive year.
The Ann Arbor Area Board of Realtors has reported 1,433 home sales so far in 2013. The average sale price year-to-date in the county is $253,939, up from $211,602 during the same time period in 2012.
Lizzy Alfs is a business reporter for AnnArbor.com. Reach her at 734-623-2584 or email her at lizzyalfs@annarbor.com. Follow her on Twitter at http://twitter.com/lizzyalfs.
Comments
LSB
Wed, Aug 7, 2013 : 4:53 p.m.
Funny that you are showing a photo taken last winter.
spaghettimonsters
Wed, Aug 7, 2013 : 2:52 p.m.
Any larger idea, Lizzy, why these buyouts are taking place? To an outsider who has only passively observed the local market, it seems strange. Is this a case of previous years of difficult sales simply catching up, retiring local owners, or what, exactly?
what4
Thu, Aug 8, 2013 : 3:58 a.m.
Correct Spaghettimonsters; both Ed Surovell and Dave Lutton have wanted to sell for a number of years. Both deserve to retire after building businesses employing hundreds and both men wanted a certain price but were also motivated to find a happy home for their employees. Both Reinhart and Surovell had multiple suitors. They were well run companies with stables of very high quality agents in an extremely dynamic, high unit value market. The Hanna company which purchased Surovell is a 3 generation family owned and hands on run business that is highly regarded and philanthropic. The Real Estate One Ann Arbor franchise will be acquiring some of the best agents around in visible, established offices.
Lizzy Alfs
Wed, Aug 7, 2013 : 1:30 p.m.
FYI, Reinhart President Dave Lutton said this to Lucy Ann Lance on 1290 WLBY this morning: "No one is losing their job. I have the utmost confidence in Real Estate One."
Jay Thomas
Wed, Aug 7, 2013 : 3:02 a.m.
Edward Surovell and Charles Reinhart were our premier realtors. It seems everything is being homogenized.
JRW
Wed, Aug 7, 2013 : 1:45 a.m.
The cartel continues.....less competition = higher prices for customers.
walker101
Wed, Aug 7, 2013 : 4:09 a.m.
Your right without any competition from various other Real Estate companies they can pretty much dictate what commissions they impose on homeowners when it comes time to sell. Not sure what selling commissions currently run but what ever it is you can bet they'll rise.
A2comments
Tue, Aug 6, 2013 : 8:17 p.m.
Treetowncartel notes an important point. When you're buying or selling real estate that are disclosure requirements that firms must follow. A question for Lizzy to perhaps get answered is whether in these situations - where separate entities are controlled by the same company - do they follow these rules or is it a "different' company?
Lolly
Tue, Aug 6, 2013 : 8:48 p.m.
Real estate license law requires that agents disclose the basics of an agency relationship to potential clients. When I act as agent for someone, I have a fiduciary duty that includes full disclosure, confidentiality, due diligence, accountability, and obedience to lawful instructions. The agent on the other side of the transaction (who may or may not be from the same company) owes the same duties to her client. If both agents work at the same company, there will be someone in the company who has a duty to both parties, but it is very unlikely that the dual agent will ever come in contact with either party.
treetowncartel
Tue, Aug 6, 2013 : 8:07 p.m.
This works well because they can push each others' inventory on their customers. I am sure the realtors won't disclose the ownership interest when they are showing a house to a customer that is being listed by the co-owned company.
Jack Gladney
Wed, Aug 7, 2013 : 1:05 a.m.
Well, that does it! I'm never shopping for a house there again! (*caps lock* lol)
what4
Wed, Aug 7, 2013 : 1 a.m.
Some Realtors try to "double dip," that is get both sides of the transaction, more than they try to find a buyer. Not that common at the average priced home but a real problem at the upper end where Realtors drag their feet at giving other Realtors access to their properties as they wait for a buyer to come to them directly. It is disgusting, benefits them only, is not that visible to sellers (though they are hurt by it) and is most common among Reinhart big shots. I hope Real Estate One makes an attempt to curb the practice now that they are in control.
OLDTIMER3
Wed, Aug 7, 2013 : 12:35 a.m.
Most belong to a group using multiple listings already I think. Other words they can show a house listed with another relator I believe.
Solitude
Tue, Aug 6, 2013 : 10:32 p.m.
Treetown, that makes no sense. A real estate agent gets paid on commission, which means if they don't find you a house you like, they don't get paid. If they find you a house you like, in your price range, what do you care who is listing it? And I say this as someone who considers most real estate agents to be one step below the stereotypical used car salesman in terms of integrity, competence and believability.
treetowncartel
Tue, Aug 6, 2013 : 9:15 p.m.
"you get paid on " should read "you get paid on a commission basis"
treetowncartel
Tue, Aug 6, 2013 : 8:55 p.m.
So will you tell them or will you not tell them that the house you are showing them is with Real Estate One, who owns your company? There are some reasons for doing this, namely job security in helping keeping your employer in business. In the fact scenario you give it is clear that you work for the same Company. You are a Reinhart Realtor walking me into a house with a Reinhart sign in front of it. that is as transparent as it gets. Also, since you get paid on I know in the end a Realtor just wants to spend as little time as they can landing their client a house they are ok with, and the client leaving happy enough to come back and make referrals.
Lolly
Tue, Aug 6, 2013 : 8:42 p.m.
Your comment reveals an unfamiliarity with the way a real estate transaction works. The listing agent is working for the seller, and the buyer's agent is working for the buyer. It doesn't matter to the buyer or the buyer's agent who the listing company might be. When I sell a house that is listed by another agent in my own company (Reinhart), there is no advantage or disadvantage to me or to the the buyer that comes as a result of the listing agent also working for Reinhart. Also, I don't believe that agents try to "push" houses on buyers (would that be possible?). We are trying to help them find the one that works best for them and fits their budget.
justcurious
Tue, Aug 6, 2013 : 8:05 p.m.
First Ed Surovell and now Reinhart....and the beat goes on as the smaller fish get swallowed up by the bigger fish....no surprises here.
Craig Lounsbury
Tue, Aug 6, 2013 : 7:28 p.m.
My guess is, eventually, the Minister of Redundancy is going to come a knocking and some poor souls are going to lose their jobs. It might take a few months or a couple years. I hope I'm wrong.
Bonsai
Tue, Aug 6, 2013 : 7:05 p.m.
this story is crying out for more context -- why are they merging? why have there been other mergers recently? is this a sign of strength or weakness in the local real estate market? or is it just that lutton et al want to sell out and cash in?
sttc
Tue, Aug 6, 2013 : 8:19 p.m.
i don't think they're merging for lack of business, the property market in washtenaw county is just wild at this point in time (take it from someone in the middle of closing on a home right now)
Nicholas Urfe
Tue, Aug 6, 2013 : 7 p.m.
How much of the city and county real estate markets, respectively, will this combined firm control?
Nicholas Urfe
Tue, Aug 6, 2013 : 8:41 p.m.
Thanks, Lizzy.
Lizzy Alfs
Tue, Aug 6, 2013 : 7:43 p.m.
I wouldn't look at these numbers as perfectly accurate since it's only a one year sample and Howard Hanna had just entered the market, but here are some details from 2012 market share totals (this is for the county): Reinhart closed 2,587 transactions with $616.9 million in volume (ranked #1 in the county last year, representing about 36 percent of the market share). Real Estate One closed 959 transactions with $183.1 million in volume (ranked #4 in the county last year, representing about 10.7 percent of the market share). Keller Williams and Howard Hanna were #2, #3. So on just those numbers, together Reinhart and REO controlled about 46 percent.