The pool of independent real estate companies in Massachusetts is getting smaller, as officials from Hammond Residential Real Estate confirmed last week they have entered into acquisition negotiations with national powerhouse GMAC Real Estate.

There are negotiations ongoing, said Tod Beaty, one of the principals at Hammond. They’re zooming along right now, though we’re not sure when there will be a press release to announce anything. He added that negotiations have been going on for a few months.

Though terms of the acquisition have not been disclosed, industry experts have estimated the purchase price at between $7 million and $10 million.

Potential suitors for Hammond have been lining up for some time, Beaty said. We’ve been solicited by five companies over the past three years, he said. We’ve had lots of people interested in our company, and that’s very exciting.

Other companies expressing interest in acquiring Hammond have included Cendant and NRT, Beaty said.

News of the pending acquisition by Liberty Corner, N.J.-based GMAC comes on the heels of the launch of an aggressive advertising campaign by GMAC in the region to establish its identity.

GMAC Real Estate has been operating in Massachusetts and throughout the country under the Better Homes and Gardens name, which it acquired in 1998. That year the company also acquired Woburn-based Carlson Real Estate. The Better Homes and Gardens agencies continued to use that identity until late February, when many of the affiliate agencies – as well as Carlson – officially switched to the GMAC logo.

If and when the deal is finally closed, Beaty insisted little would change within Hammond.

We’ve been clear all along, he said. We don’t want anyone to change the way we do business. Hammond has said that five aspects of the company – the identity, management, hiring practices, publications, and decision-making – cannot change under new ownership.

The five key points, as well as the money, are what’s behind the deal, Beaty said. We’ve been working on ironing out the five points, and we’re getting there. He described the negotiations as very friendly.

Saul B. Cohen, Hammond’s president, downplayed the acquisition talks, but confirmed they are ongoing.

The smoke is real, he said. Yes, there is serious dialogue.

Cohen said Hammond would be able to take advantage of a greater number of services and technology if it partnered with a company like GMAC. The real estate industry is undergoing, technology-wise, considerable change. I have to do what’s going to make the most sense to me and my people. I have a responsibility to the people in this firm, he said. If something is put together and it feels right, there’s no reason why we shouldn’t pursue it.

While Beaty said he plans on remaining with Hammond long after the pending acquisition, he added that the GMAC buyout makes sense for Cohen and Joseph P. Hare, the company’s co-founder and executive vice president, who may consider retirement in the years following the acquisition.

It would make sense for my partners, Beaty said. Any time you have your own business, you have to think about an exit strategy.

Both Cohen and Beaty stressed that, although deep into negotiations, the deal is not yet complete.

We haven’t gone all the way around the track yet, Cohen said. It ain’t over till the fat lady sings.

We’re still buttoning things down, Beaty said.

Fewer Independents
Industry experts are already keeping an eye on the pending acquisition and speculating about its effect on the market.

It’ll be an interesting transition, said Paul J. Harrington, president of Lexington-based The DeWolfe Co., an independent regional real estate chain. Hammond was one of the remaining niche quality players in the market. They’ll be going from a niche company that pays great attention to detail to being part of a national company.

The company has a certain kind of marketing, and their agents have open access to senior management, he continued. They’re going from that to being part of a national brand. It’s an interesting position.

Harrington said GMAC’s acquisition of Hammond, when it occurs, would not change the way DeWolfe competes with the company.

They’re certainly a strong competitor in all respects, but I don’t think much will change, he said. [The acquisition] might even be an opportunity for us to make some advances in some of the markets with good quality associates from Hammond who may not want to be a part of GMAC.

DeWolfe itself is just coming off of a year of aggressively acquiring real estate firms throughout New England. This is just another indication of the continuing trend toward consolidation in the industry, Harrington said. Between ourselves, NRT, Hunneman, and now GMAC, Hammond was one of the few left.

Hammond is a very good company and, under Saul Cohen, has had excellent management, said Jack Conway, head of Jack Conway & Co., an independently owned real estate chain with 36 offices and 614 agents. I’m sure this will be a good mix for GMAC. We wish them well.

As evidence that acquisitions and mergers are hot in the real estate market, Conway said GMAC has offered to purchase his company four times in the last 12 months, and NRT has offered to buy the company three times in the same period.

GMAC made an offer to acquire us some six months ago, but we declined and have opted to keep our independent status, Conway continued. We are proud to be a locally owned company.

Hammond has about 160 real estate agents operating out of six offices in and around Boston. One aspect of the company that the principals stress is the high number of administrative support staff available to assist the agents, leaving them more time to show homes and negotiate deals with less time devoted to paperwork. While Hammond’s image typically includes selling higher-end luxury homes, Beaty said the company lists a wide range of properties.

Beaty said the acquisition will occur only if GMAC meets Hammond’s specific criteria. We have what we want in writing, he said. Basically, we say to them ‘We’re already doing a great job without you.’ They’re talking to a seller who doesn’t necessarily want to sell.

Beaty added that Hammond is ranked in the top 10 among Massachusetts real estate agencies in terms of sales volume, and in the top 100 nationally. We do the same volume as companies that have thousands of agents. We have 200, he said.

I think this is a good time for Hammond to do this, said Steve Murray, who runs a Colorado-based consulting firm that works with real estate companies involved in acquisitions, including a number of GMAC acquisitions. I think it’s the right thing for Saul to do, and it’s right for the partnership.