The Real Deal Between NRT And

Written by Posted On Thursday, 10 February 2005 16:00

Realty Times has learned of one of the terms of the deal between NRT and that should be an explosive crowd-pleaser when it is announced at NRT's conference today by NRT Chairman and CEO Bob Becker.

As reported earlier, Homestore just announced a new listings enhancement deal with NRT to showcase the brand's MLS listings with multiple photos, links back to the listing agents, and other goodies on .

It's a big deal because the population of NRT's agents represents approximately half of the agent customers had only a year or two ago, which means a substantial increase in revenues for

NRT owns and operates more than 1000 offices, with 8,000 employees and 59,000 sales associates. That's nearly 17 percent of Realtors, or members of the National Association of Realtors.

According to Homestore Executive VP Corporate Development Group Allan Merrill, the deal, should NRT exercise its options for all three years of the agreement, with profits rising year over year, should be worth a minimum of $38 million.

"You can't divide that number by three," explains Merrill. "because the revenues are scheduled to build year over year."

Merrill also points out that a number of NRT agents were already customers, and that will temporarily lose their billing while the deal is in place.

Lose their billing? That's right. NRT is picking up the tab to enhance between 350,000 to 400,000 listings annually.

For listing agents, this is a recruiting tool to end all recruiting tools.

So what's so great about enhanced listings? All NAR agents can post their listings to their MLS. If their MLS has an agreement with, their listings are made consumer-ready in the site's presentation format. While the service is free to Realtors, they don't get bells and whistles unless they pay to upgrade to an enhanced listing. Enhanced listings would include goodies like multiple photos, the ability to add more information, and the agent's contact information. By MLS rules of engagement with, without an enhancements, all emails and calls go to the broker, who can control what happens to the lead.

Enhanced listings have personal marketing opportunities for agents that unenhanced listings simply don't get. The reason? Unenhanced listings, by agreement with the NAR, are free to every agent. Enhanced listings are advertisements paid for by the listing agents.

The number of listings, enhanced or unenhanced, on is the largest in the world, but while has strived to encourage agents to enhance their listings to create a rich, robust marketplace for consumers, many agents, (an estimated 90 percent which Homestore will not confirm,) have been content to simply let provide them with free advertising.

Meanwhile, other agents have recognized that they can set themselves apart in their marketplace by enhancing their listings, and showing sellers how much more attractively they present their homes online using enhancements. With over 70 percent of homebuyers seeking homebuying information online, including rich eye-candy housing content, affords a place where agents can market homes stylishly.

That's why the NRT deal with makes such a statement. NRT will single-handedly raise brokerages' standards for the public presentation of listings online, even if NRT's parent may have a better agenda.

Set aside but keep in mind the incestuous, contentious relationship between Cendant and Homestore, where the two companies have circled outside of courthouses since 1999. They first went at each other over Cendant not getting stock options when Homestore went public. Then they fought over HOMS excruciating losses due to previous mismanagement. A battery of troubles caused HOMS' stock to fall to pennies, and Cendant wrote the values of its shares down to nothing. Which means it's still sitting on millions of shares that haven't been sold yet.

If NRT can raise the presentation standards on by outshining competitors, other brokers will be forced to adopt a higher standard of listings presentation. They'll order enhanced listings, too. Even if they don't, NRT wins, because the firm wisely turned the deal into a loyalty tool.

"We are doing this for the agents," says Becker. "We have a strategic plan and we execute against that plan. We believe our model keeps the agent at the center of the transaction."

What NRT plans is synchronized lead management - with no referral fees attached to the leads generated by

Rob Campbell, technology spokesperson for NRT explains, "We are purchasing the ability to enhance listings, we aren't adding listings that aren't in the MLS. The MLS feed is where the listing comes from. We are providing additional photos, rewritten information, open house information, etc. to better portray that listing to the consumer. We aren't overwriting the MLS listing in any way."

Here's where Cendant comes in. In December, 2004, Cendant announced a product called LeadRouter, proprietary software designed to (1) get information from the consumer, (2) process the information according to rules provided by the broker to the software, (3) put the lead into the hands of an agent as quickly as possible (4) track the leads from all Internet sources on one screen for future marketing (5) and put the broker back in control of lead management and quality service.

Not just an email processor, LeadRouter puts the lead on the agent's cellphone for immediate pick-up.

"Agents don't have to do it all themselves," explains Campbell. "LeadRouter is a way to manage the leads that come off our Websites, we are putting the listing agent photo, name and personal contact information and the link to request more information on the listings, and we are using LeadRouter to get the lead into the agent's hands by converting the notification to the cellphone."

"Fifty percent of leads are never returned," says Becker. "We do it in 15 seconds. The agent is the center of their listing - who knows better than they do about their own listing? It's part of our overall strategy, and we are excited about it."

Online lead generation is NRT's focus, says Becker. "We are making significant investments in search engines, and we have a significant radio campaign. There is a series of ads that talk about the agent's role in the transaction, so we have lots of different pieces. It's well thought out."

It sounds almost too good to be true ....will agents have to pay for the leads they get?

"We are not charging the agents," says Becker flatly. "This is a tremendous marketing and recruiting advantage that we are offering. Cendant owns the LeadRouter technology and we will be using it to send leads to agents' cell phones, at no charge."

"Who we are trying to think about here is the consumer," says Merrill. "What is the online experience going to be like for them?"

No doubt it will be a lot better, thanks to the kissing and making up that's going on in two boardrooms.

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