HomeServices of America
Company Overview
HomeServices of America is one of the largest residential real estate brokerage companies in the United States, operating under more than 40 local brand names across approximately 900 offices in 30+ states. As a Berkshire subsidiary through Berkshire Hathaway Energy/MidAmerican, HomeServices reflects Berkshire's approach to building national scale in fragmented industries through brand-respecting acquisitions of local leaders.
Investment Story
Growth through local brand acquisitions. HomeServices has grown primarily through acquiring established regional and local real estate brokerages while maintaining their individual brand identities — Iowa Realty, Long & Foster, Prudential Real Estate affiliates, and dozens of others. This 'branded federation' model preserves the local market trust that clients have in established regional brokers while achieving national scale in technology, marketing, and operational support.
Connection to Berkshire Hathaway Energy. HomeServices operates as part of the Berkshire Hathaway Energy holding company, which Greg Abel oversees. The connection to BHE is primarily organizational — homebuying and energy don't share obvious operational synergies — but both businesses benefit from Berkshire's capital backing and permanent ownership commitment.
Market challenges. The residential real estate brokerage industry faces significant structural questions around commission models — lawsuits challenging the traditional buyer's agent commission structure may fundamentally alter the industry's economics. HomeServices was among the defendants in major commission-related litigation in 2023.
Buffett's Own Words
MidAmerican also owns a significant non-utility business, HomeServices of America, the second largest real estate broker in the country. Unlike our utility operations, this business is highly cyclical, but nevertheless one we view enthusiastically. We have an exceptional manager, Ron Peltier, who through both his acquisition and operational skills is building a brokerage powerhouse. HomeServices participated in $59.8 billion of transactions in 2004, a gain of $11.2 billion from 2003. About 24% of the increase c
American – this may surprise you – we also own the second-largest residential real estate brokerage business in the country. We are market-share leaders in a number of large cities, primarily in the Midwest, and have recently acquired important firms in Atlanta and Southern California. Last year, operating under various names that are locally familiar, we handled about 106,000 transactions involving properties worth nearly $20 billion. Ron Peltier has built this business for us, and it’s likely he will make more
We call this business HomeServices of America. In the various communities it serves, though, it operates under the names of the businesses it has acquired, such as CBS in Omaha, Edina Realty in Minneapolis and Iowa Realty in Des Moines. In most metropolitan areas in which we operate, we are the clear market leader. HomeServices is now the second largest residential brokerage business in the country. On one side or the other (or both), we participated in $37 billion of transactions last year, up 100% from 2001. M
MidAmerican also owns a significant non-utility business, Home Services of America, the second largest real estate broker in the country. Unlike our utility operations, this business is highly cyclical, but nevertheless one we view enthusiastically. We have an exceptional manager, Ron Peltier, who, through both his acquisition and operational skills, is building a brokerage powerhouse. Last year, Home Services participated in $48.6 billion of transactions, a gain of $11.7 billion from 2002. About 23% of the incr
MidAmerican also owns a significant non-utility business, HomeServices of America, the second largest real estate broker in the country. Unlike our utility operations, this business is highly cyclical, but nevertheless one we view enthusiastically. We have an exceptional manager, Ron Peltier, who through both his acquisition and operational skills is building a brokerage powerhouse. HomeServices participated in $59.8 billion of transactions in 2004, a gain of $11.2 billion from 2003. About 24% of the increase c
Investment Lessons
Branded federation models respect local trust in fragmented markets. Real estate buyers and sellers trust specific local brokers — relationships built over years. A national brand that acquires and immediately rebrands these local operators destroys the accumulated local trust. HomeServices' model of maintaining local brand identities while adding national infrastructure represents a more respectful — and ultimately more profitable — approach to national consolidation in trust-sensitive local markets.