Franchise and brokerage giant Realogy is “well underway” in customizing the technology platform it acquired when it bought ZipRealty in August, and expects to start making it available to its franchisees in the middle of next year.

The Powered by Zip tech platform provides brokerages with integrated tools including a branded website, mobile website and mobile app; ZipRealty’s “Zap” customer relationship management (CRM) system; business and transaction management services; digital marketing for agents; and “agent coaching” reports intended to help brokers boost agent productivity.

“A broad range of our franchisees have already been exposed to the technology platform, and the groundswell of interest strongly confirms” the promise of the technology, Realogy CEO Richard Smith told investment analysts in a conference call today.

Realogy provides franchise services to brokerages operating under the Century 21, Coldwell Banker, ERA, Sotheby’s International Realty, and Better Homes and Gardens Real Estate brand names.

In the meantime, Realogy has already integrated ZipRealty’s 1,700-agent brokerage operations into its own brokerage subsidiary, NRT, and plans to begin expanding  them next year.

Smith said ZipRealty CEO Lanny Baker and his team “are terrific additions to our company. We continue to be excited about the strategic opportunities available to us” as a result of the acquisition.

“We acquired ZipRealty for its innovative technology platform as well as its unique brokerage model, both of which offer us competitive advantages,” Smith said. “Our strategy is to customize the technology to the look and feel of each of our individual franchise brands and to expand and grow the ZipRealty-owned and -operated brokerage model. The customization of the technology is well underway, and we expect to start deploying turnkey technology solutions to our franchisees in the middle of next year.”

ZipRealty and two other brokerages acquired by NRT in the last year — Martha Turner Properties in Texas and Frank Howard Allen Realtors in California — accounted for about 3 percent of transaction sides in the third quarter.

Although closed transaction sides at company-owned brokerages were down 4 percent from a year ago, to 89,472 during the three months ending Sept. 30, a 5 percent increase in average home sale price to $498,650 helped boost NRT commission income per side by 4 percent, to $12,985.

At brokerages that Realogy provides franchise services to, sides were down 3 percent for the quarter, to 306,338, but average home sale price increased 6 percent to $255,780, helping grow Realogy’s royalty rate per side to $301, the company said in a regulatory filing.

All in all, Realogy posted a $100 million profit for the third quarter, down 7 percent from a year ago, including $6 million in costs associated with ZipRealty transaction and integration costs, on net revenue of $1.5 billion, down 1 percent from a year ago.

Realogy said it expects to see the first year-over-year increase in transaction sides during the final quarter of the year.

Smith also revealed that a consumer-facing search portal that NRT will populate with listings from 100 multiple listing services to generate buyer leads will be in “soft launch” mode through the middle of next year.

NRT has said the website is intended to reduce its reliance on leads from websites like Zillow, Trulia and realtor.com. But it will rely primarily on organic search to attract visitors.

Asked if Realogy plans a “big marketing blitz” to promote the site, Smith said “the beauty of organic search is you can generally do it without a lot of marketing expense. So you’re not going to see consumer-based brand awareness spending that would defeat the purpose. You’re going to see good old-fashioned local market organic search, so the URL we have is so attractive from that perspective.”

NRT aims to not only boost the number of leads it generates in-house, but grow the volume of high-quality “scrubbed” leads that it can collect a 35 percent referral fee on from select “e-agents.”

Smith said he expects other agents will continue to depend on third-party websites for leads.

“Listen, agents are free-spirit and independent contractors. They use everything,” he said.

“Those agents who are classified by us as e-agents, they’re accustomed to and trained and very responsive to organically generated search leads, and then there are those agents who will not be interested in it at all. We have teams of agents who handle Web-based leads. They do it quite effectively and they do it on the terms that we’ve outlined from an economic perspective. This is a channel that we know well … and we manage quite well. So it’s good for the agents. It’s good for us.”

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