Buffett's Real Estate Brokerage Is on Track for a Record Year

Some estimates suggest there is $27.5 trillion of residential real estate in the United States. Trillions of dollars of real estate changes hands each year, enriching everyone involved, from banks to real estate brokers.

You've probably seen a for-sale sign bearing a familiar name in a neighborhood near yours. And yes, this is Warren Buffett's Berkshire Hathaway (NYSE:BRK-A)(NYSE:BRK-B) -- at least a small portion of it, anyway.

When Berkshire Hathaway bought MidAmerican Energy in 2000, it came with a little freebie: a small army of real estate agents who worked for a brand then known as HomeServices of America.

Buffett wrote in one of his letters that he was more interested in the energy assets. The real estate business came along for the ride.

As incidental as its original purchase may have been, its subsequent growth has been anything but. It acquired 67% of the Prudential and Real Living franchise operations in 2012, and Buffett described the model in his letter to shareholders, noting that the two brands "license 544 brokerage companies throughout the country and receive a small royalty on their sales." Berkshire Hathaway also received an option to buy the remaining operations within five years.

Read Full Story: Buffett's Real Estate Brokerage Is on Track for a Record Year