Warren Buffett’s legendary holding company Berkshire Hathaway is close to acquiring Intero Real Estate Services, the Silicon Valley residential brokerage powerhouse, according with industry sources familiar with the transaction.
Terms of the Intero deal were still sketchy, but Berkshire Hathaway has been beefing up its position in residential brokerage through a new brand called Berkshire Hathaway HomeServices, and is aiming to take it national. According to Bloomberg, Berkshire’s HomeServices has bought eight brokerages in the past two years.
An Intero acquisition would give Berkshire a strong entry into the lucrative Silicon Valley market. Intero, founded in 2002 and based in Cupertino, expanded quickly and today has more than 60 offices with a combined sales volume of $8.7 billion in 2013.
It’s a particularly potent nameplate in Silicon Valley. The Business Journal’s research team pegs Intero, headed by President and CEO Gino Blefari, as the No. 3 residential brokerage in Silicon Valley by sales volume, behind Coldwell Banker Residential Brokerage and Alain Pinel Realtors Inc. (Alain Pinel himself actually works for Intero, as general manager of its luxury Prestigio International division.)
Blefari declined to comment when I reached him by phone on Thursday. But the residential real estate community has been buzzing for weeks that a deal was in the works, and sources said the transaction is expected to close soon, perhaps in the next few weeks. I wasn’t able to suss out any financial details or how an acquisition will affect operators of Intero franchises.
Buffett ranks as the world’s third-richest man with a fortune of $65 billion, according to Forbes. His Omaha, Neb.-based Berkshire Hathaway owns dozens of subsidiaries, from railroad companies to furniture to insurance and energy. It is also invested in the housing industry. It owns Clayton Homes, a manufactured house company, and various building materials companies such as Johns Manville, an insulation and roofing systems company.
Buffett’s stature among investors made Berkshire Hathaway the most respected company in a 2013 survey by Barrons. A Harris Poll released in March named Berkshire Hathaway HomeServices the real estate agency brand of the year. The company is betting having that nameplate on for-sale signs will help gain consumer trust and sell homes.
In previous deals, such as the Berkshire acquisition of the Prudential residential real estate brand, the acquired company and its franchises have taken on the Berkshire Hathaway HomeServices name.
“The strategy going forward is to migrate the franchises over to one super brand: Berkshire Hathaway HomeServices,” HomeServices CEO Ron Peltier told USA Today after that deal was announced in 2012.
However, some brokerages under the Berkshire umbrella maintain their names. Minnesota-based Edina Realty, for instance, is owned by HomeServices. It keeps the Edina name, but recently put a line on its branding that says it’s a Berkshire Hathaway affiliate.
Berkshire’s interest in housing brokerage comes as the residential market is returning from its doldrums, and nowhere is that more true than in the Valley. The median home price in the San Jose metro area was $669,000 in February, according to Realtor.com, up 8.7 percent from a year ago.
Berkshire didn’t respond to a request for comment when I reached out several weeks ago, nor when I inquired again on Thursday.
(Edited by: Van Susteren, Baumann)
Courtesy of Bizjournals.com

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