The cost of free service is that sometimes you get what you pay for, as an investor seeking free home valuations found out recently.

"Dear Blanche Evans,

I am an investor and own real estate apt. houses, strip stores, warehouses, etc., but I do not consider the home where I live as an" investment" and plan to stay in it another 20+ years.

Recently I went to the website of one of the "internet house value firms" advertised widely today on TV, billboards and elsewhere. I was just curious about what my waterfront house might bring in today's Miami market. Also curious if I was keeping it insured for an adequate amount. Within 24 hours there was a pushy real estate agent on my doorstep soliciting a listing on my home, when all I wanted was what was advertised: to know the current value of my home.

The agent was not one from the neighborhood, actually, when pressed, he admitted he was new in the business in the last 5 months and had never sold a home in my neighborhood. I later learned these "internet house value firms" sell those internet leads to real estate agents for a 25 percent to 35 percent portion of the real estate commission.

It seems like a sure way to get an inexperienced or a "lazy" real estate agent, one not willing to "farm" a neighborhood and form relationships with homeowners and get to know the specific features and details of that part of town.

I expected a high quality meaningful valuation of my home from an agent who had dealt in my part of town for years. Instead I got an agent from across town because that "lazy" agent would pay for the lead, rather than earn it from years of earning his/her stripes in the trenches of my neighborhood.

When I told a local Realtor of my experience with this "internet house value firm," he further pointed out that since the real estate agent from across town was now obligated to give away 25 percent to 35 percent of the commission on the front end to that "internet house value firm" advertising on TV, that agent has less money for an advertising budget to promote my property. Thus I end up with less newspaper ads, less costly brochures, perhaps a lessened internet presence, fewer Open Houses, less marketing efforts, etc.

I wanted lots of ads and costly beautiful color brochures but unknowingly I "spent" 25 percent to 35 percent of the agent’s commission by bringing in the "internet house value firm" at the start of the transaction. I feel hood winked.

If 25 percent to 35 percent of the real estate commission has already been committed to that "internet house value firm" the real estate agent would be in less of a position to negotiate his/her commission, which I would have to pay as the seller, because I brought in that third party "internet house value firm" rather than just calling a local realty firm who has agents active in my neighborhood.

I can see that the internet firm is getting rich by doing little work other than e-mailing out the lead to a real estate agent, while the agent is having to work harder with less marketing tools, and making less take home pay. I felt tricked that I as the seller had "cut my own throat" by reducing the advertising dollars my agent had to market my own home.

Finally I learned that there are mortgage and loan firms doing the same thing. They advertise that "banks will compete over you" for your business and then they sell those internet leads to real estate agents for a similar 25 percent to 35 percent cut of the real estate commission. It sounds go good on TV, but the reality is much different when you, the seller, end up with less advertising and promotion for the property you want to sell.

The TV and billboard ads mention nothing about "Call us if you want to sell and need a valuation of your property" or I would never have gone to their website.

Please share your thoughts on my comments in your newspaper column.

Cordially, Waterfront Investor

Realty Times responds:

Dear Waterfront Investor:

After asking more about you, we find that you didn't list with the "house valuation agent" and didn't sell your home, but that if it had been your goal to do so, you would have "felt hood-winked or tricked" that you had already "spent 25 to 35 percent of what might have otherwise been used to advertise, market and promote" your property, because you brought in another party (the internet valuation firm from the TV ad) to the transaction -- a firm that now needed to be paid by the listing agent and/or listing company."

While it's easy to appreciate that you wanted some help and to stay somewhat anonymous, you also never intended to list and sell your home, something for which Realtor-created home valuations, otherwise known as a comparable market analysis (CMA,) are typically used. You had to give away your anonymity in order to get a proper valuation of the home, hence the Realtor on your doorstep.

So what really happened is you wanted a "high quality" valuation (to use your own words), for free, and to avoid meeting the party who would be so kindly providing you with what you wanted.

Could it be that you were annoyed that you were given to a Realtor as a "lead?"

As a sophisticated investor, you should know that nothing's really free. The house valuation Internet sites that you see advertised are often referral or pay-for-leads services, and they depend on people like you who want to get information without contacting a Realtor directly. They then offer your lead to the agent and the agent pays for the lead either on the front or the back end in hopes that you will meet them and decide to business with them. They know they'll never get your business unless they can get in front of you. To an extent you're right that some inexperienced agents use these services to find customers, but there are also plenty of experienced agents who use these referral services for "incremental business," or business that doesn't come from their own network of clients, listings and advertising efforts.

You're surprised to learn that companies have you figured out and have created a business plan around putting Realtors together with agent-averse buyers and sellers. These sites are successful because once the agent can get in front of the client, they can usually sell their services. They just need that foot in the door. When it clicks, everybody's happy, but if there is another agenda going on, as in your case, then nobody gets what they want.

You are a sophisticated investor with lots of property. You knew there were experts in your area, yet you didn't contact them. Why? Was it because you knew you wanted to use their expertise without paying them? If you had contacted an agent in person, you knew they would have as much expectation of doing business with you as the house valuation agent, and you didn't want to have to explain the ugly fact that you're a user - not a customer.

Why not be more up-front about it so you can really get what you want -- that high-quality valuation that will truly help you in your business?

If all you want is information, why not pay for a professional appraisal from a licensed appraiser or offer to pay a local broker/agent for a professional CMA? Many would be happy to help you. You aren't the only person in the world who needs to know the value of his/her home without needing to sell, and many Realtors routinely perform broker price opinions and CMAs. In some states, they aren't allowed to charge for them because of conflicts with appraisers, but if your state is one of those, then pay an appraiser to get what you want.

A broker I know, for example, makes out like a bandit every spring at tax reappraisal time by doing CMAs and offering to fight tax increases for her clients. She charges a flat fee to file protests and to go before the appraisal district boards and make cases for reductions, saving her clients time, hassle, and hundreds to thousands of dollars annually.

Next time, pony up some bucks and offer to buy a real report you can use. If you find a Realtor whose knowledge and expertise are worthy of your respect, good things can happen. You might create a relationship of value where this agent works hard to find you good deals that will make you even more money over your lifetime.

What does it matter if you give a little of your earnings away if the person is bringing you viable deals that you didn't have to spend your time and effort going out to get? The Realtor can maximize your time so you can still make deals on your own and make twice as much money, because with the help of a good Realtor, you can literally be two places at once.