Corporate Scandals. White collar crime. Bankruptcies. Bubbles. Redemption. For those who enjoy watching self-important people take a fall, 2002 was a juicy year. For those who were crushed by the landings (investors, customers and ye of too much faith,) it was a year better to forget. For all the hubris, justice is being served like just desserts. To restore our faith in humanity, not to mention corporate governance, there are even a few heroes emerging.

No, we aren’t just talking about the riotous third-year declining stock market, we’re talking about real estate. The year 2002 was a banner year, and has set the stage for a very interesting 2003.

It’s time to recognize the newsmakers in the Best and Worst of 2002. And, what would a Best and Worst list be without leading off with Homestore?

Best Poetic Justice – Stuart Wolff

Last year’s Realty Times’ honoree for Best Crystal Ball was Homestore CEO Stuart Wolff, who always seemed to know just when to dump millions in stocks. Now Wolff, along with a long list of other Homestore greedmeisters, has been slapped with a formidable class-action shareholders suit, been ousted from the company, and has the unwanted attentions of the Justice Department.

Wolff would probably like to quietly retire to count his millions, instead of spending time denying that he knew anything about round-trip deals and insider trading, except that several of his corporate cronies (canaries) have already pled guilty to securities fraud and are warbling Wolff’s name.

Best Quote – Peter Tafeen

Concerning the round-trip revenue-sharing deal he allegedly negotiated with AOL, Tafeen, former vice president in charge of business development for Homestore, was quoted in a 244-page amended class action filing by Homestore investors as saying to self-confessed securities fraud perpetrator and former Homestore chief financial officer Joseph Shew, that it’s “scary how perfect it was."

It’s scary how perfect a case the feds and civil litigants are building against Tafeen and company.

Best Quote – Dishonorable Mention – Stuart Wolff

Speaking through his attorneys in response to news reporter inquiries, Wolff dismissed allegations of his involvement in securities fraud claiming that what happened was due to the actions of “rogue employees.”

Worst Time To Have Deep Pockets Award – AOL and Cendant

Former AOL executives, AOL Time Warner, Cendant Corporation and Cendant executive Richard Smith, among others, have been named as defendants in the evergrowing shareholder suit against Homestore.

To view the filing, click here.

Classiest Guy – Homestore’s Mike Long

Signing on for one of the most complicated corporate clean-ups since Enron, Mike Long took over as CEO for Homestore when Stuart Wolff stepped down. Since then, he has streamlined staff, retooled products, and set the dotcom on the path to profitability.

In this year alone, Long and his edited crew have faced:

• A class-action shareholder suit (still pending,)
• Possible delisting from the NASDAQ
• An SEC investigation (HOMS cooperated and has been cleared)
• The consolidation of its employees and revamping of its services.
• A dispute with its primary traffic and advertising partner AOL (to be resolved)
• The challenges of repairing a company’s reputation

The Pete Rose Award – Myers Websuite

Myers Internet purchased the remains of Websuite in 2002. Websuite, was the company that originally operated the e-PRO educational site for the NAR. Websuite declared bankruptcy two years ago in the midst of a scandal in which it was revealed by Realty Times that founders used royalties that should have gone to the NAR to fund expansion into other services, among other questionable activities.

Proving that time heals all wounds and Americans are a people who love to forgive, Websuite is now under new management with Myers Internet, a successful company run by principals of fine reputation.

The Throw In The Towel Award – HomeAdvisor

Say it ain’t so, HomeAdvisor. Without you, there isn’t a heavyweight championship fight anymore. Now those traffic numbers and listings scorecards just don’t mean the same thing.

Most Surprising Appearance At The NAR Convention – Bob Prince

Homes.com emerged from bankruptcy this year, thanks to the efforts of its new CEO Tom Orsi. Former not-so-hot-with-other-people’s-money CEO Bob Prince must have thought that gave him a reason to come out of hiding. Luckily for him, a lot of people don’t know what he looks like, or he might not have made it out of New Orleans in one piece.

Flatline Award – HomeSeekers' Stock Price

HomeSeekers’ (HSMK) stock started the year at .06 a share and ended the year at .05.

Are these folks doing anything?

Waiting For The Other Shoe To Drop Award - wheretolive.com

Investors may be trying to find out where these people live.

According to the map on the site, twenty-seven “regions” are now represented by brokers. The consumer portal is attractive but do consumers want to see only one participating broker’s listings in a major metro like Dallas or Seattle? Now that John L. Scott Real Estate’s listings are being included, it looks like the national coverage has expanded, but closer examination shows that sales appear to be pretty flat when adding up that Scott represents at least 12 of those regions.

On the bright side, Johnlscott.com’s new Website built by wheretolive.com in just under two years, went online in November. It has some nifty features. You decide if it was worth the wait. Click here. The property searches are cool, and so is the relationship building aspect with the Myhomefile feature. However, Realty Times’ staff wonders what is really new about some of these features. We created a similar Web-site-for-clients feature almost six years ago with Realty Connection.

Guess we were too ahead of our time with a product that could be built in under two years.

Best Lead Generation Technology – RE Technologies

For the second year in a row, the best online lead generation technology award goes to RE Technologies. Their system can actually show all of the vacancies of an apartment complex on line and deliver customers based on these vacancies.

The site can get an apartment complex on their system within minutes. They deliver what an apartment owner really wants – leases from consumers online.

Why didn’t the MLS industry think of this first?

Most Press Releases – RE/MAX International

When RE/MAX isn’t busy preparing trademark infringement cases, and making companies like CBS knuckle under, the company is expanding all over the world. In places like civil war-torn Gautemala to terrorist-loving Saudi Arabia, RE/MAX not only sees the boom to come, it could single-handedly make the world a more peaceful place through the joy of owning real estate.

Baghdad or bust, baby.

Best-dressed NAR Executive – Frank Sibley

Tall, silver-haired and dapper, Sibley suavely oversees the publications and conventions for the NAR. With an unflappable style, the always suited and tied Sibley can be seen holding court at the NAR trade shows. Even at the end of the day, Sibley doesn’t have a hair out of place.

Biggest Powder Keg – VOWs

Though it suffered criticism for doing so, the NAR wisely shelved any decisions on creating an official policy on virtual office Websites until mid-year 2003, and for a very good reason. The decision makers don’t know enough about VOWs and how they work or how they could impact the sharing of listings at the most basic level – the MLS.

Most Years On The Market Without Selling – Interealty

Rumors have swirled for years that Interealty is up for sale. While it’s lost some market share to quicker-to-market Web-based real estate information service providers like Rappatoni, everyone else has, too. Like others, Interealty is hanging in there waiting for the market to improve, and is hedging its bets with a strong new product, MLXchange.

The Mouse That Roared Award – Rapattoni

Rapattoni gets the nod not for taking market share from bigger companies, but for taking on GE Interlogix’ astonishingly high market share on real estate lockboxes. Supra and Risco, the only known lockbox vendors, are both part of GE Interlogix, Inc, and together have the real estate lockbox business all but, er, locked up. However, it’s not a monopoly, insist company sources.

Despite the range of choice supplied by two different companies under the same corporate umbrella, some associations aren’t happy with GE’s subsidiaries, particularly Supra. Some call Supra hardware and software outdated, expensive, and clumsy, and they don’t like those half-decade-long contracts, or the lack of support for products that they claim they have already paid for.

Founder Andy Rapattoni thinks his company can make a difference. He’s publicly announced that he will have an alternative lockbox solution that will be ready in 2003. The message is clear for those MLSs who want to wait, or have contracts expiring next year – if they will give Rapattoni time to make good on his boast, they will have a choice outside of GE Interlogix. And with 80 percent of MLSs already using Rapattoni's association management software, the trust factor is already in the company’s favor.

Dirtiest Word – Referral

Referrals between brokers are legal, but thanks to third-parties and clever new e-brokers who use antiquated MLS rules to their advantage, the industry is finding itself sharing a dwindling commissions pot with people who are taking money out of but not putting money back into the industry, say complainants.

Realty Times got a taste of how angry agents can get about referral services, when we featured a Realtor’s referral site as “”Site of the Day.” Numerous calls were received by our company, and three angry people canceled their subscriptions. One, ironically, was a buyer’s agent. We politely refrained from telling her that when we post a buyer’s agent site as Site of the Day, we get even more threats of cancellations.

Just for the record, the Site of the Day is a free promotional vehicle for Realtors. We choose sites based on their overall design and usefulness to their target audience, not on whether or not we like their business models. And would thinking agents really want it any other way?

From Gorilla To Hibernating Bear – FNIS

FNIS is still there, but seem to be in a Homestore-like flux over how to integrate many recent acquisitions. The thing is they appear to have a sustainable business model, but they can’t figure out how to leverage MLS information.

Welcome to the club.

Busybody Award – Realtor Jim Lee

On agent list-servs to stock message boards, posts from this intrepid Realtor show that he has a strong dislike of online lead generation vendors, especially Homestore. He zealously discourages fellow agents from supporting dot-com interlopers.

Unbeknownst to Lee, many Realtors are laughing all the way to the bank. We know. We talk to Realtors who are successfully using online tools every day, many from Homestore-operated Realtor.com.

When Realtors find something that works for them to bring in business, they tend to keep it to themselves. Wouldn’t you?

Speaker of the Year – Saul Klein Internet Crusade

Saul Klein, a founder of The Internet Crusade, has logged over 1 million air miles getting the Internet message out to associations, brokers and agents. In 2002, he traveled over 100,000 miles, about 20,000 of which were to introduce the NAR’s e-PRO program to state and county associations. And that doesn’t even count the driving time and miles to local associations. Next year, Klein is planning 40 events per month with the emphasis on e-PRO.

Worst Use of Calculator Technologies – FNIS

Just because you can, doesn't mean you should.

FNIS's up to the minute calculator of what investors would have earned and how many shares they would own if they had held the stock since 1993 is a study in lost investor confidence. To be fair, the company has gone through numerous retoolings, acquisitions and reincarnations to become known as Fidelity National Information Solutions. But defaulting the calculator to 1993, to show 77 percent losses by today's sales price, while honest, is corporate self-flagellation nobody really needs to see, especially on a page optimistically titled "Discover Why Your Future Is Safe With Us."

Just in case the calculator changes after this article is published (we expect it will be), here is a screen shot to show you that we just can’t make up stuff this funny.

Rest In Peace – Home-Link Services, Inc.

Home-Link offers concierge-level services to customers via real estate brokers. The company just declared bankruptcy.

Vendors, repeat after me – Realtors want to sell real estate, not ancillary services.

From HomeAdvisor to Homebid to Homestore, companies have tried to woo brokers to be the gateway for selling their services and failed.

Repeat this mantra 100 times until the temptation to sell your products or services through brokers has passed.

Worst New Idea – Religious, Gay, Etc. Referral Sites

Organizations like this one are referral networks for Christian real estate professionals to work with Christian customers. That’s a potential Fair housing violation right there, if agents don’t provide proper disclosures, and protect themselves with a visible disclaimer that any agent is free to work with any client regardless of religion, sex, color, etc. This site for gay agents and customers, asks for sexual orientation in its applications.

These are just two examples of a burgeoning number of referral sites that may be unintentionally putting member agents in compromising situations. Even with proper disclaimers, having joined these organizations could be hard to explain to consumers or HUD regulators or a judge.

Think twice before using these referral services, or you could get whacked faster than a Soprano underboss if you fail to state that you comply with Fair Housing rules.

Special Section - From Our Tech Department

Best Agent Site - Tom Rhodes, Jr.

Sometimes sites contain so much information that users don't even know where to start browsing. Tom's site is simple, yet informative. The layout is incredibly easy to navigate, the graphics load quickly and are designed well, and visitors aren't bombarded with flashing text, rollovers and slow-loading presentations.

Best Company Site - AM Realty

The simplicity and cleanness of the site not only make it easy on the eyes, but extremely simple to navigate. It isn't flooded with information, and the links are centrally located but not crunched together. They have remained consistent with the cleanness throughout their pages and did not clutter them with advertising, flashy presentations. Instead, it's straightforward information right at your fingertips.

Happiest Customers - Best Image Marketing

We help agents who have Web sites from all the top Web site vendors, and assist them to integrate our products with their Web marketing solutions. Many times we are asked which vendors we recommend because an agent wants to make a change.

Best Image customers never ask to switch vendors. Best Image has not only been exemplary in every situation, their staff is responsive to any request/help/information we need, they are always willing to go the extra mile to help us and our mutual customers. Their knowledge of what a Realtor needs to have a successful web site, in conjunction with our products, has made new customer transitions easy and uncomplicated.