When the story broke last week on Realty Times that Real Estate Book had accused Primedia's Realestate.com of publishing its listings without permission, stripping them of the listing agents' contact information, putting HPCInteractive's copyright on the listings, in order to provide Lending Tree with laundered listings (Primedia's Internet division and operator of Realestate.com's technology solutions) which could provide inquiries to its network of brokers, Lending Tree was asked by Realty Times for their side of the story.

Here are the company's responses by spokesperson Deborah Roth to questions by Blanche Evans.

Q: Why are you in the referral business?

A: LendingTree is not in the referral business. We are in the business of assisting consumers who wish help in finding a Realtor and trust LendingTree to recommend a full service professional. Lending Tree is also in the business of providing our broker partners incredible value as we provide an alternate source of business at a reasonable cost. LendingTree's marketing success, our brand name, our technology and our experience with participating brokers, enables them to obtain market share in their area. We collect no up-front fees for our services but work on a success basis, wherein we receive a part of the broker's revenue after closing, and from that, we generally provide extremely generous rebates to consumers for using a LendingTree broker.

Q: How can you say you are not in the referral business? Why else are you building a broker network? What would you call your revenue model?

A: Our business is to supply our customers with a service they need, finding a Realtor, and our brokers with volume. LendingTree is a network, or an exchange, wherein two constituencies (buyers/sellers, home seekers/home finders) can find each other in an easy, cost-effective, and targeted manner.

Q: Did you know that Realestate.com was using listings from brokers who were not aware that they would be solicited by Lending Tree to join your referral program?

A: LendingTree is not soliciting brokers to join our program. For the past year our program has been open on an invitation only basis. We add brokers in any area where we are getting consumer requests for a Realtor and we do not have enough brokers on the network to provide consumers with choice. As we have plenty of broker choice available in all metropolitan areas this means we are usually offer brokers the opportunity to join ournetwork in smaller, under-served locations.

Q: I have two brokers on the record who say that Lending Tree did in fact solicit them to join the system, and that they were contacted after Realestate.com started posting the Real Estate Book listings. Do you have a call center?

A: First they are not correct that we solicited them. We have a program called a "one time broker" where we have a customer and no broker coverage. Montezuma, CO for example. In this case we would contact the consumer directly by phone to verify that they are for real and then we would go to the closest broker and ask them if they want the lead. For only those leads, the fee is negotiable, as our objective is to place the consumer with a Realtor. The rebates are always prorated based on the real estate commission and the referral fee.

Q: Who thought of the business plan to ask brokers for their listings and then charge the same referral fee that a relocation company charges?

A: LendingTree invited brokers to have listings shown on a co-branded website for which there would be no up front charge. This provides an increase in consumer audience that participating brokers receive at no cost unless closings occur. Response to our invitation has been positive.

Q: What is your strategy as far as growing your referral business?

A: Our goal is to continue marketing and advertising for our broker network and to deliver motivated consumers who trust LendingTree to help them find the Realtor best suited to their situation.

Q: Where do you get your leads besides Realestate.com listings?

A: The consumers who use the "Find a Realtor" service come from our site, lendingtree.com, as well as relevant partner web sites, affinity relationships, airlines, hotel chains, and other affiliates

Q: Lending Tree charges a 35 percent referral fee. How is that a "reasonable" cost? This is advertising. It's not like you are a relocation company with a lot invested in the lead.

A: After we provide the rebate, the referral fee is more like 17 percent, an extremely reasonable fee for what we do. We spend a significant amount of money in TV ads, fees to our partners, technology and education. The close rates on our referrals are high and the brokers appreciate the business. The balance is the rebate which is also acceptable to our brokers and agents. They endorse the rebate as it reduces the cost for the purchaser or seller and it allows them to be competitive in this market without discounting their entire book of business. Also, the program is voluntary and they can drop out if they feel they are not getting value for their money. Very few brokers drop out of our network, leading us to believe that the vast majority do feel they are getting value out of their relationship with LendingTree.

Q: Do you have permission from the National Association of Realtors to use the trademarked term Realtor in your advertising?

A: Yes. Our legal team obtained permission. Why? Because NAR accepts the fact that our brokers and agents are Realtors, that we support the professional Realtor and because we use the name correctly. When we use the term REALTORS in our materials, we include this disclaimer: "REALTOR® -- A registered collective membership mark that identifies a real estate professional who is a member of the National Association of REALTORS® and subscribes to its strict Code of Ethics."

Q: Are you planning to continue the use of automated tools from FNIS to give consumers more to do on the site? If they can automate their own home valuations, what do they need a Realtor for? Isn't this a conflict in your business model? Or is there another purpose?

A: Yes, we plan to give consumers whatever they need to become educated and empowered. We do not have an automated valuation tool. We leave valuation to the professional appraisers, lenders and brokers. We have a "Home Value Estimator" tool which allows a consumer to check prices in the neighborhoods in which they are interested. It is a free tool and delivers a fairly wide range of values. It is extremely accurate and, in our testing, rated second only to the tool provided by a GSE. All other models we checked were either not accurate enough or lacked a viable consumer interface as they were built for lenders, not consumers. Consumers requesting more detailed and finite information are referred to our Realtors.

Q: Where on the Lending Tree site is it disclosed to the consumer that the broker you refer is paying you a 35 percent referral fee on the transaction?

A: We do disclose it on the site under the Terms of Use in the Real Estate Services section.

Fees and rebates are also supposed to be disclosed in writing by the Realtors to the buyer and seller in accordance with their local state laws and regulations, once a consumer has chosen a Realtor. Rebates are paid only in states where they are not prohibited by state law and are distributed also in accordance with state law.

Q: Are you standing behind your relationship with Realestate.com or will you seek other sources for listings and exposure for Lending Tree?

A: Our relationship with realestate.com is one of a relevant web site partner delivering consumers to our network through LendingTree technology. Our listings of homes for sale will come from any legitimate source such as third party suppliers, MLS's and the brokers themselves. LendingTree will only work with partners that provide us with listings through legitimate sources.

Published: March 6, 2003

Use of this article without permission is a violation of federal copyright laws.

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.