It's amazing how much money you can save when you don't have to pay for the privilege of advertising listings.

Paying for listings was an upside-down business model, that hurt a lot of real estate portals, along with heavy competition, declining investments, and other factors.

HomeSeekers, a leading advertising package service provider and consumer portal, was out of cash and inches from bankruptcy last year, when it was the first to call a public halt to the practice of paying MLSs for listings. This rattled MLSs who used listings as non-dues revenues (after costs,) but the capitulation of HomeSeekers made it easier for Homestore, HomeAdvisor (now the House and Home channel of MSN) and others to renegotiate their aggregation agreements with MLSs.

While there are other reasons that contributed to HomeSeekers failure to be profitable in the past, it's important to remember that none of its competitors, even those that were well-financed, were profitable, either. What HomeSeekers did have going for it was an extremely loyal customer base which it nurtured with good customer support. The retreat from paying for listings enabled HomeSeekers to concentrate on profitability, and according to a new report, HomeSeekers, d/b/a Realigent, is profitable for the second quarter in a row.

Net earnings for the quarter ending September 30, 2002, were $884 thousand compared to a net loss of $6.1 million for the same period in 2001. In the first nine months of the year, the company posted a net profit of $2.8 million compared to a net loss of $41.5 million while significantly reducing its liabilities, says the company.

The company generated net income from operations totaling a record $584 thousand during the quarter ended September 30, 2002. Similarly, earnings before interest, taxes, depreciation, and amortization ("EBITDA") of just under $1.1 million recognized during the nine-months ended September 30, 2002, set another record for the company.

"We are pleased to announce a steady increase in revenue over each of the past three quarters," commented CEO Thomas Chaffee. "We continue to focus on executing the business plan while reducing costs and driving sales in an increasingly challenging macroeconomic environment."

Not coincidentally, most of HomeSeekers' competitors, which had to stop beating each other up in order to concentrate on survival, are reporting better days ahead.

Homestore's Mike Long said in a recent interview that the company has reduced its burn rate, and is making some major announcements at the NAR convention this week.

Homes.com is set to emerge from bankruptcy and has been EBITDA profitable on a GAAP basis since November 2001. Homes.com CEO Tom Orsi says he expects those results to continue.

All of this is good news for real estate professionals, because just when more consumers than ever are visiting the Internet to find home information, the real estate vendors who served the industry were in the throes of bankruptcies, litigation, SEC investigations, corporate clean-outs, and other problems. Concentrating on survival, many had little to offer agents who just wanted to purchase lead generation packages so that their Web sites and other lead generation products would bring them consumers.

Now the portals are back to doing what they ought to do - getting exposure for their agent customers. Now, agents have more choices in companies to do business with as well as where to post their listings.

Congratulations, HomeSeekers.

Published: November 5, 2002

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