Virtually all the major national listings sites are in recession, retreat, or death throes. Is it over for them? Not quite yet. But what went wrong?

Of the ones still breathing, Homes.com is struggling to come out of Chapter 11 bankruptcy, but its president, Tom Orsi, is optimistic that the company will turn a profit in 2002.

Cyberhomes - FNIS/Vistainfo's public listing site is sitting on ice while FNIS launches its new Paragon MLS information management systems and possibly looks at new acquisitions.

HomeSeekers' remaining management is in desperate talks to find new capital, while its accounting firm and most of its management has abandoned ship. It's lone board member Thomas Chaffee is continuing operations in the only areas with a hope of profitability or attracting capital - new MLS installations and agent Web sites. Through those can be sold secondary revenue generators - Broker Reciprocity solutions and productivity suites.

Homestore's stock has set a new record low this week, while analysts and investors fret over whether it can renew subscriptions to brokers and agents. The company took further speculation away with the announcement that it is reshuffling its management team and letting 20 percent of its work force go.

Each of these third-parties had two things in common - they were advertising-based models who paid for the content they advertised. Second, they got killed trying to operate money-losing consumer portals in the hopes that real estate agents would bail them out.

The one exception is HomeAdvisor, which never sold any products to agents. Listings on its site was and still is free of charge. But HomeAdvisor still got spun around the blender, because it tried to go nose to nose with Homestore for dominance in the real estate space. It bailed out of the going-public rat race, sold off its loan software development division and is marketing its broker productivity product Realty Desktop. Then it scooted out of the dot-com rain to nest under parent Microsoft's MSN umbrella as the homes channel for the portal where it can help MSN attract more revenues - without having to look over its shoulder.

The record holder for overspending for customers, technology and content is Homestore. Paying up to $3 a listing for exclusive listings, Gold Alliance agreements, content sharing on AOL, subscriptions to Cendant brands, virtual tour provider IPIX, MLS access software, productivity software, lead generation sites such as HomeFair and iPlace, and more ultimately made multimillionaires of Homestore's founders, but did little for real estate agent customers. The site dazzled with its complicated array of lead generation routes but leads ultimately went nowhere for most agents. They found that unless the millions of home buyers who go on the Internet were looking for a home in exactly the right price range, neighborhood and city of their listings, they had little chance to be found. Also, they found that leads were being led away from them to advertisers, site partners, and other agents from their listings which they had to pay to be found upon. The business model proved too much for many agents who formed a backlash against the site and its founders that lights up stock message boards and real estate listservs(tm) to this day.

The others also generated revenues through Web site subscriptions, translation - advertising. These met only mixed success, because the Web site ads worked for some brokers and agents who knew how to aggressively market them, but not for others, who used the Web sites as a passive lead generation tool.

As brokers and agents discovered that due to competitive restrictions among the listings sites, they were forced to purchase multiple Web sites to be found on the Internet. The more money they spent, the more they found they weren't getting the leads they thought they would.

Many online agents and brokers became angry and discouraged, and demanded more accountability. They wanted leads. But the portals stubbornly refused to see past their own self-interests. For example, they saw search engine placement as an inherent conflict. This was a fatal, egocentric mistake for most, as it opened the door for niche Web designers to snatch away many of these disillusioned agent customers and deliver them real leads through search engine placement, banner ads, and other tools. The niche designers also gave agents personal domain names that they could advertise on their business cards - instead of advertising the listing site. They accomplished through educating the agent customer what the larger sites could not - loyalty.

Now, these agents who have sites set up with their own domain names are in a perfect position to take advantage of Broker Reciprocity, where they too can use the MLS listings to generate leads. With Broker Reciprocity, brokers and agents are getting more leads from their personal Web sites than from the national listing-centric sites because they can offer all the local listings that are available by agreement among participating brokers. And they can do it with one site, that they can market locally and through most of the entry portals for consumers.

Now buyers' agents, agents with few or no listings, agents with listings but not all price ranges, and agents with tons of listings can be found through a new listings-centric business model - shared MLS listings from the MLS, made available with the blessing of the NAR.

But there's a catch. Some brokers, including some regional Coldwell Banker brokerages are declining to participate in Broker Reciprocity. These and other dissidents are offering either listings gathered through Realtor.com or their own franchise listings. NRT, a major Coldwell Banker franchisor, told Agent News that there is no official policy by Coldwell Banker concerning franchise brokers' participation in Broker Reciprocity. Yet, the possibility that broker sites not having all the listings breathes new life into Realtor.com. Not Homestore, but Realtor.com. If some large brokers don't participate at the local level, that means that neither the listings site or the local brokers will have all the listings.

And that puts agents back where they started - having to buy multiple sites to be found. And that's why the national listings services still have a chance.

So far the MLS organizations that took stock options and payment for listings are hopeful that they can be the big winners with Broker Reciprocity, too. While some of the national sites have defaulted on their payments, and others may decline to pay what they have in the past, the dollar-per-listing business model may soon be a thing of the past, but many MLSs have found another business model in selling the listings back to the brokers and agents.

Published: October 26, 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.