Northwest Arkansas Residential Market Hosts Mergers, Closings

(To view this week's lists, click on any of the following links for the version you prefer:
Top Real Estate Agencies - PDF or Spreadsheet
Top Real Estate Agents - PDF or Spreadsheet
Top Real Estate Teams - PDF or Spreadsheet)

More consolidation and fallout were visited on the residential real estate market in northwest Arkansas as companies joined forces and others fell by the wayside.

On Feb. 23, 2010, Coldwell Banker Faucette Real Estate of Fayetteville and Harris McHaney Realtors of Rogers merged to create Coldwell Banker Harris McHaney & Faucette of Fayetteville.

The pooled 2009 sales total of the companies ($375 million) represent the largest residential realty firm based in Arkansas, surpassing Lindsey & Associates of Fayetteville ($340 million).

The combined dollar volume of Faucette and Harris McHaney is second only to the Arkansas operations of Crye-Leike Realtors of Memphis (nearly $877 million) as the largest residential concern in the state.

When the deal was announced two months ago, George Faucette, president and owner of Coldwell Banker Faucette, said he and Pat Harris, owner of Harris McHaney, would be 50-50 partners in the new firm.

"We're both very excited about it," Faucette said.

On Dec. 10, 2009, Griffin Co. Realtors of Springdale and Weichert Realtors-Clark Long & Associates of Fayetteville merged to create Weichert Realtors-The Griffin Co. of Springdale.

The combined sales of Griffin and Clark Long (about $140 million) would have ranked No. 9 among Arkansas residential real estate firms during 2009. The deal marks the second merger in as many years for Griffin, which absorbed Benchmark Real Estate of Lowell in July 2008.

Gary Griffin, principal broker of the firm, said merger talk with Clark Long & Associates started in mid-summer.

"It took us about six months to get to the actual merger," Griffin said. "I went from 31 years as an independent agency to a franchise. In a lot of ways, that's a huge change."

The merger was primarily economics-driven to minimize overhead and maximize production. Along the way, Weichert's Fayetteville, Bentonville and Lowell offices were closed.

"We ended up doubling the sales staff," Griffin said. "We shut down their offices and moved them into ours. In doing so, we increased the management."

Brandon Long, Carter Clark and Philip Taldo are executive brokers at the company. Ownership is divided among Long, Clark, Taldo and Griffin.

A new twist for Griffin was Weichert's pre-licensing real estate school and continuing education school joining the mix.

"That's another dimension we didn't have in all our years in business," he said.

Is more consolidation on the way for residential firms in northwest Arkansas?

"I certainly wouldn't be surprised," Griffin said. "There's no reason to have 100 different real estate companies when the greater number of them have empty desks, and everyone is duplicating their expenses."

Gone from this year's list are Exit Pinnacle Realty of Rogers, which ranked No. 12 with a $110 million sales volume in 2008, and Exit Realty Northwest of Bentonville, which ranked No. 36 with a $37 million sales volume in 2008.

Exit Pinnacle Realty imploded in August 2009 a month after the bankruptcy of its owner, Cameron Torabi. His Chapter 7 filing listed assets of $200,125 and liabilities of nearly $4 million.

The demise of Exit Pinnacle Realty led to the birth of Exit Pro Realty of Rogers, led by Jana Robison. This new entry appears at No. 36 with total 2009 sales volume of $42 million.

The assets of Exit Realty Northwest were purchased in November by Crye-Leike Realtors after Mike Robinson opted not to renew the Exit franchise. Robinson and his roster of 20 agents moved to Crye-Leike.

Sales Talk

The top-end residential market is considered to be the most volatile housing segment in Arkansas, but the realm of gated neighborhoods and million-dollar manors in Little Rock propelled Jon Underhill to a record year in 2009.

The namesake owner of John Underhill Real Estate topped the charts among residential agents around the state with a whopping sales volume of $42.4 million that took even him by surprise. That figure is nearly double his total during 2008.

Last year's good business mojo has carried over to 2010, according to the west Little Rock agent. Underhill said the momentum was in play for another good year.

Another niche player posted the second-largest sales volume at $27.5 million. John Mason of Jacksonville's Mason & Co. Realty specializes in HUD properties. He was followed closely by Casey Jones of The Janet Jones Co. of Little Rock at nearly $26.7 million. Jones held the No. 1 slot in 2008 at $28.6 million.

Sean Morris of Walker & Associates in Centerton (Benton County) said the housing market remained strong in northwest Arkansas even though the bubble of excess burst for some.

"First-time homebuyers were buying homes last year, and they will buy homes next year," Morris said. "The end of the tax credits will get the shock value over, and we'll return to business as normal. And business in our market is good."

Morris ranked No. 7 in the state with a sales volume of $17.1 million.

Gary Griffin reports that 2010 sales in northwest Arkansas received an additional boost of activity since March.

"We've had five excellent weeks in a row, and it's not just the stimulus money," he said. "It's partly spring, partly consumer confidence improving, and people are getting tired of doing without."

Lest We Forget

The real estate community double counts the sale of a house in recognition that the buyer and seller are often represented by different agents and companies.

The doubling reflects a system that rightfully acknowledges two sides to every transaction. However, instead of dividing the sales price of a property between the buyer's agent/company and the sale's agent/company to determine sales volume, both agents and companies get credit for the entire amount.

If a $100,000 house sells and one company is home to both the listing and selling agents, the company is credited with $200,000.

With this backdrop, the real-world dollar total of houses sold is more like half the sales volume reported by companies and agents. Take 5 percent of that total to get a feel for what that translates into in terms of commission revenue, money that actually flows through firms and agents.

The dollar volume threshold for this year's list of top-selling agents if $4.5 million. The minimum for team sellers remains $10 million.