Homestore is closing its Toronto virtual tour servicing division and moving some of its employees to its Westlake office in its continuing quest to consolidate services and reduce costs.

Little will change for Hometour 360 broker and agent customers, says Jonathon Greenblatt, general manager of imaging for Homestore, except that they will be able to get their virtual tours serviced directly by the imaging companies (photographers, servicers) without sending the images off to Toronto for processing any longer.

In other words, Homestore's imaging partners - the companies that hire the photographers and produce other imaging products - will become resellers of Hometour 360 products. They will buy the packages of virtual tours and resell and service them to agents and brokers.

"We're making it more customer-centric," says Greenblatt.

The result, he says, will be faster postings of the two types of tours that Homestore offers - immersive imaging through its partner IPIX, and panoramic tours, which should benefit agents as lead generation tools.

Real estate agents and brokers who have prepaid for service have the option of either getting their money back on the unused full-service tours that they have already purchased, or they can opt to get local service providers who are resellers of Hometour 360 products to provide the servicing.

To sweeten the changeover, agents and brokers who have already purchased tours can get between two to three times the number of tours that they purchased at no extra charge to make up for the additional cost of having to hire local service providers to complete the virtual tours.

As of April 15th, Homestore resellers will be in charge of virtual tour servicing. The carrot for them is that they can now be in charge of services and pricing, as well as sell brokers and agents additional imaging products such as videos, stills, and more.

According to Greenblatt, the imaging companies that are partners with Homestore love the new reseller approach. Greenblatt names one company in particular - V.I.C. - which he says will promote mostly the panoramic virtual tours.

Currently, virtual tours hosted by Homestore are $119.95.

"Some will be able to charge their customers less than that," says Greenblatt, "but in markets where imaging is more expensive, the resellers can charge what they need to, but since we have taken the costs of dealing with Toronto out of the equation, they should have less servicing costs."

But not everyone is happy with the new program. The problem for some resellers is in servicing Homestore's prepaid clients as well as coming up with a business model that works under the new reseller program.

Says Brian Balfour, CEO of VideoHomeTours, "We are in touch with the agent at least four times during the making of a virtual tour and have developed close relationships with them. Our broker customers ask us to perform a number of services from sticking signs in yards, to shooting their training videos. I've got a problem with telling these people that they have to pay twice for video servicing."

Balfour says he would urge his customers to ask for a refund on prepaid tours and start over with imaging products of their choice. But that may open another can of worms.

Homestore has a product called PicturePath which enables virtual tour companies to post virtual tours on behalf of clients that were not purchased from Homestore, but these tours are charged a "posting fee" of $40. That additional fee limits or wipes out profits from alternative virtual tour companies, say some providers.

Rob Fershtman, CEO of Virtual Marketing Services, Inc., says his company was approached by Homestore in February. While Homestore promised him thousands of virtual tour customers (Homestore has about 150,000 virtual tour customers nationwide) he couldn't make the numbers work. And he's not happy with the alternative of serving his customers with competitive products to Hometour 360 because of the posting fee.

"Since our close examination of the "Deal" Homestore sales reps are pitching around the country, we asked Homestore for a more win/win scenario. This means we, who do all the work locally from marketing to post production customer service, be allowed to post to Realtor.com for a more reasonable sum than $40."

Fershtman says he treasures his real estate broker and agent clients, but low reseller profits and high PicturePath posting fees may cause him to reconsider whether he wants to continue serving the real estate industry.

"We - the companies that have built imaging from scratch competing against (Jutvision, Bamboo, iPIX, Homestore HomeTour360 and now the latest name - V.I.C.) are being pushed into either taking a hit to the bottom line or working with Realtors so unprofitably that a sane business owner will not bother," says Fershtman.

"The vast majority of our clients genuinely appreciate our services and contact us for nearly all of their listings," he continues. "We feel privileged to have such wonderful clientele. Further, we fully understand that we exist because of them and are just another marketing tool for their arsenal. As such we must price and act accordingly."

In response, Greenblatt says that Homestore is considering the pricing of the PicturePath fees, but says there has been no decision to reduce the amount of the fee.

"We are exposing these virtual tours on the Homestore Distribution Network, which is millions of people," defends Greenblatt. "There is a cost to us for that."

Greenblatt's position is that Homestore's new reseller program has opened the door for more possibilities for the resellers.

"Homestore has never shot virtual tours," explains Greenblatt. "We've always had a network of hundreds of imaging companies that do it for us. What has changed is that we are no longer routing the tours through Toronto, which should mean that the resellers should be able to communicate with the agents, shoot and post the tours more efficiently and cost-effectively. Most of our resellers have other imaging products that they sell, so they should have an even stronger relationship with their customers."

But without profits working with Homestore, both Fershtman and Balduf say they have no choice but to actively look at alternatives to Homestore to help their agent and broker customers get more exposure for their virtual tours and that also allows them a business model that makes sense.

"Virtual tours are marketing tools for the agents and brokers," says Balfour. "We are going to explore partnerships and programs which provide better value to our brokers and agents."

Published: April 10, 2002

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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.