What if. . . Homestore.com really wasn't a competitor and was truly a vendor. Does that change things? Quite a bit.

What if. . . Homestore.com truly understood what products an agent, broker, franchisee and franchisor really wants? That would be excellent.

What if. . . Homestore.com's customer services went from "simply satisfying" to "customer astonishment?" That would be a very nice change.

Am I dreaming? Not necessarily. . .

Admittedly, I have not been the least bit shy when it has come to voicing my opinion about Homestore.com and the many issues I have had with the corporation contracted by the NAR to manage the Realtor.com web site. These range from issues surrounding our competitors' ownership stake in the company to their apparent lack of understanding about who their customers really are.

It was no doubt my public outspokenness that prompted Mike Long, the brand new CEO of Homestore.com, to pay me a visit in early April. I was pleased that he made the effort—after all, the guy lives in Austin, Texas, and works in Westlake Village, California—and interpreted his trip to Phoenix as his way of saying that our company is an important customer for them. This is certainly an attitude that I never experienced previously with Homestore.com.

Mike addressed most of my questions and concerns, putting a few to rest and reducing my "security level" from red to yellow. Based on our conversations, you might say that I am cautiously optimistic that the company is turning things around and redirecting its focus on us, their customers.

Among the first things I asked him was "How can you, with a straight face, be promoting Homestore.com as a consumer brand and, at the same time, promoting Realtor.com as a consumer brand when they're essentially competing with one another?". He shook his head and acknowledged that it was the wrong approach and that they are doing everything to remove Homestore.com as a competitor. In fact, he says, he believes that the whole mission of Homestore.com is to drive traffic to Realtor.com.

I have noticed a few positive changes to the Homestore.com site. First, there are no longer any banner ads on the home page that could promote competing businesses. They're still on the site—a necessary evil to generate revenue for the company—but they're buried further into the site.

He says that they are dedicated to Realtors being their first and foremost customers and was highly complimentary of how Realty Executives as a company has adopted their I-lead product that we're providing every office and agent the opportunity to use. Statistically, we have more than a 70% adoption rate whereas with other major companies that rate is below 30%.

Be assured that, despite our meeting, my objection that Cendant is a major shareholder in Homestore.com has not gone away. I still will never rent an Avis car because I won't put money in a competitor's pocket, but I will admit that the NAR has done a pretty good job protecting Cendant competitors by restricting the power of the Cendant block of stock. In addition, Richard Smith, president of Cendant's real estate division, used to be on Homestore.com's board of directors. He has since resigned.

Mike also addressed one of my other major concerns which is that Homestore.com is paying the MLSs for the data that they post on Realtor.com, yet the people who are providing the data—the brokers—aren't getting any of the money. Obviously, it is much easier for Homestore.com to glean huge amounts of data from centralized sources like MLSs rather than having to deal with every broker in the country. Plus, there is a filtering process that costs Homestore.com money to convert the myriad formats that they receive the data in into a consistent format so that the product is more seamless to the consumer. That filtering process would likely be greatly exacerbated if the data were coming from hundreds or thousands of brokers.

Don't get me wrong, as I stated earlier, I am cautiously optimistic about the "new and improved" Homestore.com. They still have some major problems facing them, including shareholder lawsuits and discrepancies in financial reporting. Mike says they are dealing with them and I believe him.

Perhaps one of the reasons I found him to be so credible is he is an experienced corporate CEO and is dedicated to learning more about the real estate business, yet he has no preconceived ideas. He's making a huge effort to get to know the players and understand our business without bringing any baggage to the equation. Having run other public companies, and having done very well for himself, he made it clear that he is in this position because he wants to be there and believes that he can make a difference. To illustrate this, one of the first thing that he accomplished was establishing a clear division of responsibilities between Homestore.com and Realtor.com—correcting a previously inbred situation wherein many employees of both companies didn't even understand that they were two different companies.

I sincerely hope that this heralds a revolution for Homestore.com. Under Mike's leadership, they are looking inward at what they really need to be as an organization. In doing so they've begun to sell off other businesses that are either not viable or not appropriate for them to be involved in. In his words, "Now is my chance to really focus this company on what it's supposed to do."

Believe me, we'll be watching to make sure that he keeps his word.

Richard A. Rector, is the chairman of Realty Executives, one of the top ten real estate franchise organizations in the nation, and one of the first "100 Percent" commission organizations.

Published: June 28, 2002

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