Long & Foster’s Sale to HomeServices of America — L&F’s Detwiler: ‘The sale was our idea’
By October 11, 2017 0 892•
“The real estate market is so local,” Jeffrey S. Detwiler, president and CEO of Long & Foster Real Estate, told The Georgetowner in 2014. “Washington, D.C., has been the epicenter of the housing market recovery since 2011, and it is the best place to be during tough times,” he predicted.
Now, just months away from the company’s 50th anniversary in 2018, Detwiler is being proved right.
“The Washington capital region is a hot, robust real estate market relative to the rest of the country,” Detwiler said in an extended interview on Sept. 27 at Long & Foster’s Williamsburg-style headquarters in Chantilly, Virginia. “I see no reason that that will diminish.”
Indeed, the company — the largest private residential real estate company in the United States by sales volume — has been expanding its in-house real estate services over the past three years, adding agents and offices and establishing itself in West Virginia, South Carolina and other states along the East Coast. It was the number-one seller of luxury real estate in the Mid-Atlantic in 2016 and the largest affiliate in the Christie’s International Real Estate network.
Detwiler was brought into the company as a young CEO, without real estate experience but with a strong background in finance and banking. “We don’t need a real estate agent, we need a strategist for the future,” Wes Foster explained at the time.
As the region and the company grew, Detwiler added a number of services: a city property program called Urban Pace; a turnkey program called Builder Advantage for large and small developers to market townhouses and condos; and a supplemental employee benefit program called Partner Advantage to help their own personal real estate purchases.
In 2016, Long & Foster agents closed on more than 87,700 deals totaling over $31.2 billion.
Then, in September, Foster and Detwiler made a surprise announcement: Long & Foster had just been sold. The buyer was HomeServices of America, one of the biggest real estate services firms in the nation and part of billionaire Warren Buffet’s Berkshire Hathaway conglomerate. HomeServices already included the Real Living and Prudential real estate franchise networks.
Now L&F would bring all of its affiliates and expanding networks to HomeServices. “We will be stronger than ever,” said Detwiler.
“It wasn’t a hostile takeover or a raid,” the young CEO explained, shaking his head vigorously. “The sale was our idea, Wes Foster’s idea. Wes always taught us to listen to our agents. And we have.
“The thing is, Wes has been at this business almost 50 years now. He is over 80 years old now and he loves and is proud of our local-agent success. His biggest concern and desire is that he wants to be sure that the company continues another 50 years,” Detwiler continued. “It’s hard to do that alone. We set out to find a way to do that, on our terms, our decision, when and who with.”
“So you approached them?” The Georgetowner asked.
“It’s a small world. We all know each other,” Detwiler responded. “They, too, are personal local-agent oriented.”
Times are changing, he pointed out. Everything is more technology-based. Buying and selling homes is more complex. Both Long & Foster and HomeServices of America recognized that the entire process — buying, financing, closing an escrow, insuring, relocating — could be made easier for clients if it could all be done by a trusted company offering consolidated services.
Long & Foster does this with a brand that emphasizes family-oriented, local real estate agent recruiting and buyer-support services. Minneapolis-based HomeServices, according to its website, supports “our companies with technological innovation, operational excellence together with operational, legal and financial expertise to stay relevant throughout the home buying and home selling process.”
“Wes and we have places we want to go, things we want to do. We can do it now as part of a national organization,” said Detwiler.
The biggest future challenges to their local-service model, as Detwiler sees it, will come from the “disrupters” that are “destabilizing every business model and market as they insert themselves unasked into them.”
In the silence, it was clear who he was referring to.
“Can you imagine Amazon and Google taking over the personal real estate market?” he asked quietly. “Buying a home is not like buying a car or a computer. It’s personal. Seeing pictures online is not like having an agent you personally trust show you the property live — an agent who knows the neighborhood, the local shops and parks and schools. And, especially, who knows what the right price, financial instruments and rate are to buy and to sell a home based on their personal knowledge, data and experience.
“We feel being affiliated with a national presence like HomeServices will help to protect our agents and our personal-based services [that] home buyers want. We will be stronger but no changes will be made to the brand, to our business model and to the make-up of Long & Foster’s management and agents’ teams.”