Homestore loves NAR. The NAR loves Homestore. The NAR hates banks. Homestore loves banks. Homestore does Web site for Bank of America. NAR gets mad. Homestore pulls listings. NAR's still mad. Drop dead, Homestore, sniffs NAR.

What's going on? With a juicy announcement that was enough to send the stock ticking upward more than several points, Homestore.com, Inc. (Nasdaq: HOMS) announced on April 10, 2001 that it is entering a $10.5 million marketing deal with Bank of America (NYSE: BAC) to launch a new online homebuying and home owner service called Homesolutions. Press releases are always unclear about who gets to cash checks, but in this case it is Homestore providing the service and pocketing the money.

Positioned as a page on the Bank of America Web site, Homesolutions is a "fully integrated online marketplace offering a comprehensive array of home-buying, financing, maintenance and improvement capabilities to consumers," according to the company.

This is a good move for Homestore because the company gets "an opportunity to assist the largest bank in the country with a major company-wide Web program and help provide additional value to its 27 million customers," says Stuart Wolff, chairman and chief executive officer of Homestore.com, Inc.

So Homestore built a consumer portal for the nation's biggest bank. Good for them. So why would the NAR be upset? Because the NAR is currently engaged in trying to keep banks out of real estate, and its partner Homestore just aided the enemy. Or did it?

The NAR's position on the Bank of America/Homestore deal has never been made public, but at the least the timing of the deal was questionable, says Steve Cook, spokesperson for the NAR. The trade organization is engaged in trying to keep banks from being able to provide real estate services that it is certain will drive many brokerages out of business. "We have over 80,000 letters that have gone to the Federal Reserve Board, and we have until May 1st," says Cook. "The hearing is set for May 2nd."

With banks deciding the issue of whether banks should be in real estate, it seems inevitable.

Bank of America consumer real estate president, Kevin Shannon, didn't exactly remove the powder from the keg with this statement - "As the country's leader in online banking with more than 3.2 million customers, Bank of America is drawing upon the Homestore.com relationship to deliver a wide range of online home and real estate-related capabilities," said Shannon. "In addition to providing financial information, the marketplace features advice and solutions for home-buying and building, renting, moving and home improvement. This is one of the banking industry's first marketplaces to fully combine the financial component with homeownership solutions."

Glaringly absent were any rah-rah comments from Wolff on what a good deal this would be for real estate agents - the company's primary source of customers. Is that why the listings were pulled? Because real estate agents and their listings aren't invited to the dance? Will Homesolutions be the first bank-rolled REO site?

A look at the Homesolutions site shows that there are some lead-generation opportunities for Realtors who are customers of Homestore. There is a directory of Realtors at the end of the New Home search field, and links to School Reports and other Realtor-sponsored lead generation tools.

While speculation runs high that it was the NAR that asked Homestore to remove the existing homes listings, the NAR denies it, but there are other possibilities. Perhaps Bank of America smells victory coming up in a couple of weeks and wants its home channel site ready to go - sans Realtors.

In that case, Homestore deserves kudos for getting the world's most lucrative Web site design/hosting contract.

"We have a great arrangement where we supply a great deal of content," confirms Gary Gerdemann, senior director of communications for Homestore. "It is dynamic and different content is going up at different times, and we continue to move forward with Bank of America."

And what about the NAR? "We talk with the NAR on many levels many times a week and I'm not party to every conversation," he says. But I see the Bank of America arrangement as independent of our relationship with NAR. Our relationship to the Bank of America is helping their large customer base be informed on issues surrounding the home. That is our deal, simply put. We have provided content that will allow customers to do that."

Even if the NAR is feeling betrayed, which it hasn't exactly said that it does, the trade organization is still profiting nicely from its royalty deal with Real Select, Homestore's parent company. According to the April 17th SEC filing, Homestore paid the NAR over $2 million in royalties over the past two years, and the NAR continues to hold about 4 percent of Homestore stock.

They'll kiss and make up, sooner or later.

Published: April 18, 2001

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Blanche is a renowned author of five real estate books. Her newest, Bubbles, Booms and Busts: Make Money In Any Real Estate Market, McGraw-Hill, was rave-reviewed by The New York Times. She was also selected from hundreds of real estate experts to contribute to Donald Trump's book, Trump: The Best Real Estate Advice I Ever Received: 100 Top Experts Share Their Strategies, Rutledge Hill Press, and is featured on page 68. Order Now Review - Honors In 2006, Blanche was selected among scores of candidates to author two consumer real estate guidebooks for the National Association of Realtors: The NAR Guide to Home Buying, and The NAR Guide to Home Selling, Wiley & Sons. She is currently planning two new books for the NAR and its members.       Known for her keen insight into real estate industry issues and for her ability to make complex subjects easy to understand, Blanche is a sought-after keynote and continuing education speaker. Real estate organizations from MLSs, to brokerages, to franchisors, to associations hire her to provide up-to-the-minute analysis of real estate industry news and advice on how to improve revenues. Her passionate delivery, peppered with stinging wit, is a huge hit with audiences and fans. Don Klein, CEO Greater Nashville Association of Realtors, Blanche Evans, Richard Courtney, president 2007, GRAR "The GNAR membership meeting last week featured Blanche Evans as the keynote speaker. Her comments and insights resonated extremely well with those in attendance and we have had many requests for copies of her PowerPoint Presentation. She was a terrific part of the membership meeting and convention program!" - Don Klein, CEO Greater Nashville Association of Realtors Coverage from WSMV, Nashville - 8-14-2007 That Interview Guy - Get Inside The Head Of Today's Generation 2007 AE Institute Session - To purchase 2006 AE Institute Session - Parts 1 2 3 4 5 6 7 8 9 HouseValues Mastermind call - Parts 1 2 Blanche's fireside chat with Jeremy Conaway, HAR - Click here. For more articles by Blanche, click here.