In the transaction management arena, there are really only two heavyweight and well-funded contenders - Homestore's eRealtor and HomeAdvisor's Realty Desktop/Mortgage Platform. Both giants plan to slug it out by marketing their platforms either directly or indirectly to REALTORS®, but there's another contender parting the ropes to get in the ring. Watch out for some surprise left hooks from Bridgespan.

Homestore and HomeAdvisor are approaching their Realtor target market differently. Homestore has put together a number of software services that act as a continuum of business management on its eRealtor platform. Starting with its MLS information management from its subsidiary Wyldfyre, which can be integrated with its contact, client and business management subsidiary, Top Producer, the Realtor can use the platform from contact to closing and beyond.

HomeAdvisor has put together a transaction platform that is more lender-centric. Realty Desktop, HomeAdvisor's productivity software for Realtors, is compatible with HomeAdvisor's Mortgage Platform, which provides electronic loan decision and processing to streamline and lower costs for consumers. Agents can get a loan decision within minutes for their buyers, right at their own desktops.

Transaction management tools are important to Realtors for one reason only - they help the Realtor stay in control of the transaction. But despite having so many pieces of the transaction management put together, the applications by Homestore and HomeAdvisor lack one crucial element, a closing agent. That's the difference between creating and producing an application and a service.

On both applications, eRealtor and Realty Desktop, service providers are still necessary to make the platform work, and must be added after a broker or agent adopts the platform.

Witness the recent announcement of Prudential Preferred Realty in Pittsburgh, which announced the adoption of HomeAdvisor's Realty Desktop for its 22 offices. The company simultaneously announced that it has also adopted online Offer Management from Homebid.

It's good to know that these dovetailing technologies are platform-compatible, and that multiple players are welcomed by brokers, but that's only one message the announcement conveys. The second message is more subtle, and that is that the platforms are still embryonic. No one has all the pieces yet.

The third most promising transaction platform company doesn't have all the pieces either, but it does have the one piece that is indispensable to any transaction - the closing piece. Bridgespan comes at the transaction platform not only as an application designer, which it is, but as a principal in the transaction, which it also is. Bridgespan is a title services company, a bona fide closing agent. While it markets its services to Realtors and attorneys, depending on market custom, Bridgespan does so not as a platform designer but a principal who can offer the transaction platform as a very nice bonus. The platform is free of charge and offers all the transparency that consumers are clamoring for.

Backed by Benchmark, the venture capitol firm behind eBay, Webvan and others, Sequoia Capitol and Capital Research and Management Company, both money management firm, are investors. Bridgespan is sitting on approximately $55 to $60 million and is on the fast track to IPO land.

"We have a marquis list of investors, more than enough to support our business plan for a number of years," says chief marketing officer for Bridgespan, Lane Barnett. Chicago Title and Safeco Land and Title are also underwriters of the platform.

Through it recent acquisition of Serv America National Title, a closing service primarily serving the refinance lending industry, Bridgespan is now in over 32 states, with plans to be in all fifty U.S. states by the end of the year. That means that with its transaction platform in place, it can serve not only new mortgage loans, but refinance loans as well.

Where do Realtors fit in? They can use the platform free of charge by using Bridgespan as the closing agent.

"What is especially appealing to me regarding BridgeSpan is that in addition to the excellent escrow officers, is the electronic platform. BridgeSpan delivers a one-stop, full-service closing process that is reliable, seamless, secure, easily accessible - and at the same cost as ordinary closing services," explains Menlo Park, California broker Steve Bellumori, Steve Bellumori.

According to Barnett, the reason Realtors enjoy using Bridgespan's services is because it gives them a stress-free experience. Does the fact that they are free to the Realtor play a role?

"I think what we are seeing in the investment in aggregator platforms is a play for more volume," says Barnett. "That is not our business at all, we are not in the business of becoming a source for loan originations or anything else. We just want to do our services very well."

To that end, Bridgespan is taking a cue from Federal Express and centralizing its title processing. Routing the title policies to one area for processing electronically will result in fewer errors and more transparency to the participants, assures Barnett.

"Our centralized processing provides a different standard of service, consistency and reliability," says Barnett. "Our platform provides for transparency and participation. That is a fundamental. That is the whole point that the wisdom in the process is that it is accessible to all parties. All information is available 24/7 so participants can read and study documents ahead of time. That way there are no surprises at the closing table."

"We are the last ones to touch the customer," says Barnett.

Does that make Bridgespan a direct competitor with other transaction management systems, or is there a place for closing services on the transaction platforms?

Bridgespan is in a position of strength. They could become the closing agent of choice for HomeAdvisor or Homestore platforms, and others; they could license their closing platform to other closing entities; or they can compete directly as a transaction/participant. What will the company do?

"It's interesting. We aren't clairvoyant, but we know there will be partnerships and alliances, and we'll provide closing services to whomever needs them," dodges Barnett. " We are unusual creature so we want to make sure that we can serve all the players, because everyone needs our services."

"We have learned a lot as a fulfillment services provider. We have a Web-based application. To the extent that is transferable for other companies to use, we aren't certain. We have built it to have e-commerce solutions, and we know that the creation of value is broader than connectivity. Is it the highest and best use to standardize data or exchange data? We aren't certain."

Published: September 19, 2000

Use of this article without permission is a violation of federal copyright laws.