Former HomeSeekers CEO John Giaimo isn't really gone. He's just changing jobs. The new CEO, B.J. Rone, says that he will depend heavily on John's knowledge and ability to forge strategic alliances, keys he sees to HomeSeekers' future as a viable, profitable concern.

With big brokers weighing heavily on HomeSeekers board, it looks as if a broker-controlled consortium is in the making. Is that what's happening, or is there another game plan? The new CEO B.J.Rone and former CEO John Giaimo sat down with Agent News publisher Blanche Evans for an update.

B.E.: Why is HomeSeekers being so quiet?

B.J.R.: I just got here yesterday, and there's a lot going on! We have our year-end audit, and just spoke to the employees, and are planning to visit with customers next. You had written that we might be trying to fly under competitors' radar and that is exactly what we are trying to do.

B.E.: You have over 10,000 agents using your Web sites. What are you telling them?

J.G.: Correction. We have over 240,000 customers. Over 100,000 use our MLS services and we have 30,000 agents using our Web pages, and another 90,000 to 100,000 using our desktop software.

B.J.R.: The first thing I want to say is that John is here. We have a contract with him where we will be working together very closely. As you said, there has been a lot of upheaval in management, but I need John. He loves this company and he has been the company for a lot of years. They have been undercapitalized. Now we have ways to change that. We have HomeMark and I have a track record for being able to raise money. So we put that together with our strategic plans, more new management, I have a new CFO who has already been hired. Money has been the missing ingredient.

B.E.: Mr. Harker's announcement wasn't quite as flattering to Mr. Giaimo, et al.

J.G.: I took the CEO position in December and that was a situation that was a necessity. We had some significant problems and it took some street-fighting ability, but it wasn't my intent to take the company to the next level. I am passionate about tinkering with the parts. I don’t want to turn this into a praisefest, but Rone's the right guy. He can take this to the next level. I am a significant shareholder in the company, and I said, you guys are smart and you have some great plans, but I don't trust that you can do this without me.

B.J.R.: Like Mr. Harker said, there has been a clean sweep, a lot of senior people aren't here. But on the other hand, John will have a key role. This was done by the HomeMark board, that he would continue to be here, and I second that.

B.E.: What is Mr. Giaimo's title?

B.J.R.: We are still discussing that. I'm not much of a title person. Titles aren't a big deal. It might be VP of business development or COO or something like that. I'm big on putting a plan in place and executing the plan. I've been in five industries that I didn't have experience in. Advacare was dead broke when I came in, and it didn't have the money to even send to the IRS, (employee withholding due weekly.) In 20 months, the company sold for $109 million to its largest competitor. Reno needed to be consolidated, and it sold for $158 million.

Now I'm not saying that HomeSeekers is being prepared for sale. I'm here to turn it into a long term viable business.

B.E.: What are you telling your customers?

B.J.R.: I plan to have customer meetings and visits and I'm here to run the business and I want to pay our bills and have positive cash flow as soon as possible, and I want to rationalize each of our markets.

John can help me on key introductions, strategic alliances with different groups. He will help me with joint ventures and those types of things.

B.E.: Who is HomeMark?

B.J.R.: Mainly Dallas individuals. The company was formed over two years ago of private investors, some are very large. I'm under nondisclosure, but this company has significant potential with investors.

B.E.: What is HomeMark?

B.J.R.: It's a private holding company formed to acquire companies in the real estate industry. There is a vision, and when they are ready to share that publicly they will do it. You don't want to share your vision prematurely because that is intellectual property until it is revealed in the execution.

B.E.: How much capital is HomeMark putting into HomeSeekers?

B.J.R.: It will be in the range to capitalize the company. HomeMark wants to determine how much they are going to need, and they will think about their exit strategy and the rate of return on their money. An analysis is being done right now and I’m going to come back to HomeMark and ask for $10 million or $40 million dollars or whatever it is I think it will take.

There's no reason for us to sit on excess cash, because HomeMark is going to be better at managing idle funds than we are. Many times VC money is invested in tranches (chunks.) You don't put all your money in at once because it isn't needed all at once.

If an investor wants to put it in five payments, that's fine with me.

B.E.: Everybody who has gone into the Web site business for real estate agents is either dead or is still bleeding red ink. HomeSeekers was severely wounded in competition with Homestore/Realtor.com. What are you going to do differently? Is this going to be a new stronger version of the old HomeSeekers, or an all-new HomeSeekers?

B.J.R.: It's not going to be an all new company, but it will be better capitalized. Success breeds success. The scope or breadth of services and the degree of customer satisfaction will be impacted by the strategic vision of HomeMark.

There are companies whose valuations are way down and I am an acquisition-minded person. We will be particular of what we acquire and there are businesses we can add to the portfolio.

B.E.: How do you and Harker know each other?

B.J.R.: I've known one of the board members of the company for a while, and we have looked at investments of other companies. Certainly I'm familiar with Mary Harker, and have some very good friends at Keller Williams.

These are investors who are sitting on a lot of cash. They are keeping their powder dry and looking at good investments. A lot of oil companies have a lot of cash right now because of what we paid at the pump. I've borrowed $12 million from Ross Perot before, and so I know people like that who would like to look at a good investment.

B.E.: Is Mr. Perot an investor in HomeMark?

B.J.R.: Not that I know of. I'm not an employee of HomeMark.You need to wiggle your way in to get an interview with HomeMark and see what they are willing to talk about. The whole strategy is that it was not done casually, it's part of an overall plan. My part is to run the HomeSeekers part. To execute the vision will take the next couple of years. Rome was not built in a day, or that's what we say in California.

B.E.: We have that expression in Texas, too. Have the big brokers just bought themselves a technology consortium named HomeSeekers?

B.J.R.: I didn't say that the investors were brokers.

B.E.: I'm referring to the relationship that HomeSeekers has with The Realty Alliance. It's composed of 47 of the largest brokers in the nation, and two members of the HomeSeekers board are from The Realty Alliance. And Harker is associated with a very successful brokerage.

J.G.: Let me explain that relationship. We make great whiz bang stuff, and what's happened is that the Realty Alliance has said, why don't you pause and ask us first and let us be a part of it, the development of products? They want to be on the leading edge of technology, and we are interested in selling products to them and to their agents.

B.J.R.: If we can say anything, it is that it will get even better for the Realty Alliance.

B.E.: HomeSeekers is valued at $14 million. Why not just take it private and do what you want without the scrutiny of the public markets?

R.J.R.: That is one of the things that has been considered, except that you couldn't buy it for $14 million. The premium would jump up fast, and some people would never sell at that price.

I've got to go to the airport, but let me make a last comment. I've been in some tough situations, but I've tried to never lose a sense of humor. I want vendors and suppliers to be happy with our company. Life is too short to lose your sense of humor.

My basic philosophy is do what you say you are going to do.

Published: August 24, 2001

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Blanche Evans is the award-winning senior editor of Realty Times, the Internet's leading independent real estate news service. She is featured daily on the Realty Times Video Network in the "Realty Viewpoint" segment. Blanche has been named one of the "25 Most Influential People In Real Estate" by REALTOR Magazine, and has been twice recognized as a "notable." In 2005, she was named "Top Reporter Covering the NAR" by Delahaye-Bacon's. 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. To contact Blanche, email her at . For more articles by Blanche, click here.