In this exclusive interview with Blanche Evans, Realty Times, Long reveals his innermost thoughts about the future for Realtors and a possible change of business model for the biggest riches-toting camel in its caravan - Realtor.com.

Homestore's CEO Mike Long, like other vendors who thought they could monetize the listings of the independent Realtor, has found out the hard way that you can lead agents to the Internet, but you can't make them buy anything.

The way Long sees it, Homestore/Realtor.com has a dual mission: to serve consumers and Realtors, but the "cynical, suspicious" nature of the NAR membership is making it impossible for the company to serve the NAR membership effectively, much less make the profits necessary to stay in business.

That's due partly to many of the membership's tendency to resist change and recognize the opportunity to "differentiate themselves." It's also due to their failure to see what the crystal ball holds - a future where agents are controlled by third-party lead generation providers who assist the public to squeeze commissions and dictate service requirements.

"The industry is changing," warns Long, "and the practice of real estate will be different. It won't be as rewarding, lucrative, or as professional. It's being changed by outside forces."

The problem is that Long could be the right harbinger of doom, but few are listening. Many in the industry (despite his protests that the operating agreement with the National Association of Realtors makes Homestore an insider,) see him and other Homestore leaders as third-parties trying to get rich on the backs of Realtors' listings.

While most Realtors respect Homestore leadership on a personal level for their extraordinary feats in beating back federal investigators, a class action lawsuit, extortion-style payments to traffic partners, and other challenges, many failed to understand that these problems forced a change of financial model for Realtor.com.

The dramatic switch from Website vendor to advertising medium meant that suddenly Realtor.com was acting and talking like a newspaper, but many Realtors, bewildered by and resentful of skyrocketing fees for such exposure, didn't understand how Realtor.com was an improvement over the expensive but effective local newspaper advertising they were already buying.

Because Long did little to improve the lot of Realtors as paying customers, the way they see it, his credibility may suffer with them, but if they could listen for just a moment....

"I'll live with the decision," says Long, "if Realtors feel Realtor.com isn't valuable, but there are a few things Realtors need to know before they make that decision."

According to Long, the Internet has developed completely differently than developers thought it would. It was never conceived to be an advertising medium.

"Your behavior online is being managed," says Long. "Billions are being spent to influence consumers. Eighty-seven percent of consumers start online in one of five places: three portals- Yahoo!, MSN and AOL, and two search engines: Google and Overture. Because of this, the first point of contact is critical, and that environment for the consumer is either positive or negative for Realtors.

"You think you are acting of your own free will, but you are being bombarded with messages," continues Long, "and I'm troubled by the message about Realtors."

According to Long, third-parties are inundating consumers online with the following messages:

1. You need a consultant to pick a Realtor
2. "We" know who the good Realtors are
3. Realtors are overpaid
4. You can't trust Realtors, so let us manage them for you

Realtors are buying into the messages due to low self-image, says Long.

"Over time, they are saying that Realtors need to be dependent on us," says Long, "and the Realtors are saying 'I'd rather get 2/3rds of something than nothing.'"

Third-parties understand the demands made on Realtors very well. "They have time management problems, cash-flow problems, and short-term contacts."

But Realtors must learn to think more strategically, insists Long. "Paying in arrears for fees isn't smart at the macro-economic level. There are $67 billion in commissions annually. One-third of that is $22 billion. When Realtors trade referral fees, it's a zero-sum gain. You pay it but you get it back. With the new models on the Internet, you don't get it back. Can the real estate industry afford to strip out one third of its revenues and give it to a marketing partner?"

Long says, "What you are really agreeing to is that the marketing partner will handle the consumer, while you handle the back-end and the legal liability."

Instead, insists Long, Realtor.com offers the opportunity to keep revenues in the family. "All the issues surrounding Realtor.com come down to one thing," says Long, "you can enhance your listings for $30 a listing for the life of the listing. Seven million unique visitors visit three times a month and stay for 45 minutes."

There are one million emails a month that are mailed to Realtors, five times the number they got two years ago, yet, incredibly, 70 percent go unanswered by Realtors.

"They aren't a person until they walk through the door, but that's how they are found as leads by third-party marketing companies," says Long. "They are going to go where a response is guaranteed. And that's what the third-party companies promise - a guaranteed response."

Realtor.com isn't going to be a referral fee-based company, he says, but the company is looking into how to get Realtors on board with the message to consumers that when Realtors contact someone from Realtor.com, they will get a guaranteed response.

Part II - Long's Longshot: Dissembling Disinformation To Realtors will publish tomorrow in Agent News.

Published: May 24, 2004

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

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.