Last week while I was at Conection 99 - The MLS Forum I had the chance to visit HomeSeekers and their new facilities. I must say it was very impressive.

There was a time when many predicted the demise of HomeSeekers and in fact John Giaimo admitted that they had been through some very tough times. However, anybody who has gone to any of the trade shows and visited the HomeSeekers booth, knows that John is a hard worker, and now they appear to have weathered the storm OK. This is a guy that is not afraid to get his hands dirty. I get the impression at one time or another he has performed every job at HomeSeekers.

They now have 80+ employees, a 12 million dollar capital infusion, a new product - MLS2000, and running TV ads. Things are definitely looking up. HomeSeekers has hired some of the top talent to promote MLS 2000 and they are expecting this Web based system to be a real hit. Also, they have teamed up with Microsoft to provide free home pages for agents. HomeSeekers is hoping that many of these agents will then elect to buy a more robust page.

Now here is the good part - They are very close to a positive cash flow. From my perspective, (having had three different start ups) that is the real term for success. For an Internet company, it is almost non existent. I applaud anyone who has done this. Many an individual and investor has made millions (some billions) on Internet plays and IPOs, while their companies are still losing money. The jury is still out on many of these companies, but one that has positive cash flow is sure to stick around. HomeSeekers could be here for a long time.

Because I have had several discussions with HomeBid, and even more so because they are an advertiser on Realty Times, I have paid close attention to their first auction.

It is to take place in Phoenix on June 14th and finishes on June 17th. All homes auctioned are listed with a real estate agent and only licensed agents are allowed to bid on behalf of their customers. What I find extremely interesting is the price range of homes to be auctioned. There are the $75,000 - $120,000 homes, which is to be expected. However, there are also many homes in the $350,000 - $600,000 range! ( Here is one listed for $495,000 ). There was one at $1,800,000 and the top end I found was $2,400,000.

Whoa - that's not what I expected. Obviously, this mechanism for selling has met with great approval with many sellers. If HomeBid is successful next week, we could see one of the biggest changes in the way real estate is transacted in our lifetime. Up to now the Internet has only brought advertising to the home process. HomeBid is going to actually bring transactions to the Internet.

This could be real interesting.

Almost every day I hear some MLS, association, or real estate firm threatening to create their own consumer Web site. Some (a lot as a matter of fact) go as far to insist that once they have created their site, they will no longer send their data to the major real estate sites. Their logic is to force the consumer to come to their local site to view the homes in their local area. And why not, "Our site will be the ultimate consumer experience. It will have links to ......... and be able to give the consumer reports on .......... and be filled with ..........".

These companies, associations, or MLSs want to cash in on the consumer the way the national sites do. On the surface this is very logical. They have the data, why should they share it to enhance others sites, when they could keep it all to themselves. "We will get lots of traffic. We will sell ads. We can sell home products. Heck, we are going to kill 'em"

Bad idea.

There is one major flaw. Build it and they will not come. These people have no clue what it takes to promote a Web site. They do not understand the vast amount of marketing dollars necessary to make the consumers aware of their site. Even if they could find the marketing dollars for local awareness, how would they ever get to the relocating buyer. If I am moving to Phoenix, I am going to Realtor.com, HomeSeekers, or HomeAdvisor. I have no way of knowing about a local site that specializes in the Phoenix market. Also, it is very expensive to support a major real estate site, and a site with all of the local content should operate like a major real estate site.

Take Realty Times for example. We are the major real estate news source for Go.com, Netscape, Lycos, Bell South, Realtor.com, HomeBuilder.com, CommercialSource.com, and SpringStreet. Our advertisers include Sony, RentNet, Apartment.com, LendingTree, E-LOAN, HomeBid, Bamboo.com, and IPIX. Not bad! However, it has taken us 18 months and a ton (emphasize ton) of money to get here. And "here" means we can visualize black ink, instead of bleeding red.

This is not to say local real estate companies should not have a Web site. They most certainly should and I will discuss that later. In the meantime, cooperate with the national Web sites, send them your data, get free exposure, save a heck of a lot of money, and save your job.

Lately it has become in vogue to bash around HomeStore or as we knew it only two weeks ago - RealSelect. (Click here to read a representative E-mail received by Realty Times.) Many Realtors in the business do not think that HomeStore has gone far enough to protect their interest and in fact have used REALTORS'® dues and REALTORS'® site - Realtor.com to enhance their position in the marketplace.

First we need a little history lesson. In late 1997 RIN (Real Estate Information Network) was in a shambles and had losses of anywhere from 14 - 18 million dollars. These losses were NAR's and were in fact from Realtors' dues.

Stuart Wolff came to the rescue with 6 million dollars and started RealSelect. He gave NAR a 15% ownership in RealSelect for the rights to Realtor.com. and he agreed to many NAR stipulations for the right to operate Realtor.com. Probably the most important restriction is that RealSelect cannot get any sort of transaction fee, which stops them from receiving any fees for lender or mortgage referrals. They are the only major real estate Web site saddled with this restriction. Therefore, other revenue sources were needed.

It is important to note here that RealSelect does not, nor has ever used any of NAR's money for the operations or promotions of Realtor.com. Speaking of promotions - by last count RealSelect had committed well over $50 million to promote HomeStores' brand, which includes Realtor.com. $50 million! This is BIG BUSINESS.

After successfully promoting Realtor.com, Real Select started HomeBuilder.com, CommercialSource.com (at NARs request) and purchased SpringStreet for $40+ million. HomeBuilder.com seems to be the largest sore spot for some Realtors. However, if RealSelect had not created HomeBuilder.com someone else would have - and it would have not been as Realtor friendly as the site is now.

OK, let's review. Just for the items mentioned in this article, HomeStore has spent nearly 100 million dollars. But wait - they now have over 600 employees. That obviously adds to millions more. Did I say this was BIG BUSINESS and so far this has meant BIG LOSSES. They have spent all of this capital and still for the most part put the Realtors in the forefront.

So what do they do for the Realtors? They do deliver 6 million viewers every month to Realtor.com and show each home over 130 times. And this does not cost the Realtors or NAR a dime! Also, NAR is expected to cash in on their now 10% ownership in HomeStore for at least 100 million. Not bad for an entity that was down, out, and about to be lynched.

Yes, HomeStore does play hardball and yes, they are very aggressive, and I am sure not all of their thoughts are for the Realtors. However, HomeStore and their investors have taken enormous risk to get to this point and deserve the right to cash in on their risk and efforts. If this IPO is as successful as many predict, it is almost a certainty that Realtors will get more and more exposure.

Why bash?...... Enjoy

Whatever happened to ListingLink? 2 1/2 years ago they were the leader in on-line listings.....

Whatever happened to Virtual Realty? These guys were going to dominate the video conference mortgage application business. As a matter of fact, "hey Intel", whatever happened to video conferencing?

Whatever happened to Realty Connection? Realty Connection was going to be the "agent to consumer" Web application that was going to transform real estate. "ouch, that one hurt"

Whatever happened to Yahoo getting all of the listings, just because they are Yahoo?

Whatever happened to all of the city Web sites having GREAT real estate sections?

Whatever happened to the notion that consumers would not fill out loan applications on the Internet because they were worried about security issues?

Whatever happened to the BIG, BIG, BIG deal between RealSelect & Intuit? Is this it?

Whatever happened to "The Lion Over The Hill" predicted by Bill Chee.

Whatever happened to Interealty? I never could understand that company.

Click here to read Letters to the Editor

• Week of May 31, 1999
  As I See It: Commentary From The Publisher

has been in the real estate industry in Texas for over 15 years in both commercial and residential brokerage and is a past member of National Association of Realtors. Jody is the publisher and majority owner of Realty Times, which first launched as Agent News on October 15, 1997. Jody’s wife, Nora Lane, is a very successful Realtor in Dallas, Texas

Published: July 12, 2009

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