Monday, July 19, 2005
Inman News
The Inman Innovator awards will be presented July 28 at Real Estate Connect in San Francisco.
Six online real estate companies and services will compete for the Inman Innovator Award this year in the online real estate category, which recognizes excellence, innovation and success in Internet-based business models. The 2004 finalists for online real estate are myFICO.com, HouseValues, Reply! Real Estate, LendingTree, HomeGain and ServiceMagic.
MyFICO.com
MyFICO.com is the consumer Web site launched by Fair Isaac Corp., the creators of the FICO score. The FICO score is a
standard measure of borrower credit risk and is used to make more than 10 billion credit decisions each year.
MyFICO.com enables borrowers to log onto the Web and check their score themselves, learn how to improve their scores
and find out what effect their scores really have on their chance of securing a mortgage or other type of loan.
Consumers can access credit scores and reports from the three major credit reporting agencies: Experian, Equifax and
TransUnion. Prospective home buyers also can find out how their score would translate into an interest rate and loan
amount they'd likely be approved to obtain.
HouseValues
HouseValues provides online marketing services to real estate agents through two separate operating brands, House Values
and JustListed. The company has been growing steadily since its inception five years ago and in May raised $14.5 million
in investment funding. HouseValues provides home seller leads to realty agents who purchase the territory where the
prospect is selling their home, while JustListed provides home-buyer leads. Prospective home buyers and sellers who sign
up for the services receive free home-price valuations or for-sale listings information from participating real estate
agents. Their contact information is forwarded to the agent who purchased the region where they are either selling their
home or plan to buy.
Reply! Real Estate
Reply! Real Estate is the new operating brand of Next Phase Media. The company in June launched the new brand, which
incorporates its online real estate, autos, loans and home improvement lead generation services into a single Web portal
at Reply.com. Reply's online real estate categories include Agent Connect and RealtyNow, which match prospective home
buyers and sellers with real estate agents. The company also operates iCastle, iMotors.com, OpenAuto.com and CarClub.com.
The new Reply.com portal includes school district information, neighborhood crime rates, costs of living, climate details
for specific regions and how-to guides, among other things.
LendingTree
LendingTree matches consumers with lenders and real estate agents. The company's online lending exchange includes more than
200 lenders, while its real estate services arm includes more than 700 real estate brokers and 10,000 real estate agents.
Media mogul Barry Diller's Interactive Corp acquired the company last year in a deal valued at around $700 million.
LendingTree in December bought RealEstate.com and Domania, which provides retention marketing and customer acquisition products
and services for lenders. Early this year, LendingTree struck a deal with The Real Estate Book that gave the company permission
to display the real estate publisher's 300,000 homes-for-sale advertisements on RealEstate.com and LendingTree.com.
HomeGain
HomeGain matches real estate agents with home buyers and sellers online. The company last year said it achieved profitability
and this year celebrated five years in the online real estate business. HomeGain said it increased its revenue 50 percent,
signed up more than 200,000 prospective home buyers and sellers, and added 11,500 real estate agents to its service in 2003.
The number of real estate agents who use HomeGain's services increased 19 percent from 59,000 at the end of 2002 to 70,500 at
the end of 2003, the company disclosed. Agents pay a monthly membership fee to market their services to people who register
through HomeGain's Web site, then pay the company a referral fee when a transaction closes. HomeGain founder and CEO Bradley
Inman is also the founder and publisher of Inman News.
ServiceMagic
ServiceMagic, which matches home buyers, sellers and owners to real estate agents, lenders and residential contractors, also
reported profitability in 2003. The online company's membership network has grown to more than 2 million homeowners, 22,000
real estate brokers and agents, 23,000 service contractors and 180 banks and mortgage brokers. In March, ServiceMagic entered
a partnership with MSN, establishing itself as the exclusive provider of home improvement contractor services on the MSN House
and Home Web site.
The most innovative real estate and mortgage industry companies will be honored at Real Estate Connect, July 28-30 in San
Francisco. Real Estate Connect brings together the top leaders from the real estate industry, including mortgage lenders,
technology firms, industry analysts and news media.
Copyright 2004 Inman News
Monday, May 17, 2004
By Jessica Swesey
Inman News
In real estate, it's all about leads.
And there's no shortage of leads on the World Wide Web. In fact, Internet-generated leads are what today's fastest-growing online real estate companies have in common. Private companies ServiceMagic, ZipRealty, and HouseValues are among the real estate dot-coms that have figured out how to make money from online leads.
Publicly traded online real estate companies Homestore and LendingTree had unprofitable first quarters, but their private counterparts have grown as much as 50 percent-75 percent a year since their inception, sources said. ServiceMagic, ZipRealty and HomeGain reported profits in the last year, and Deloitte & Touche named HouseValues the fastest-growing technology company in Washington State two years in a row.
The private online companies won't disclose their financial statements, but evidence of their growth can be found in their expansion of services, product lines, markets and employees.
The Internet as an effective medium for connecting consumers to local businesses has driven ServiceMagic's success, Co-CEO Rodney Rice said.
The company, which matches home buyers, sellers and owners to real estate agents, lenders and residential contractors, was profitable last year and is so again this year, according to Rice. Its membership network has grown to more than 2 million homeowners, 22,000 real estate brokers and agents, 23,000 service contractors, and 180 banks and mortgage brokers.
"Consumers really were just waiting for a better mousetrap. Direct mail, Yellow Pages and other alternatives for consumers to find local service businesses were pretty lacking and inadequate. The Internet has empowered consumers more than ever to find the right value," he said.
ServiceMagic handles more than 500 different types of service requests from consumers in 44,000 ZIP codes for some 22 million combinations of service needs. The process of distilling those specific requests into qualified leads for local businesses is what makes the company valuable, Rice said.
"It's very difficult for (businesses) to cost-effectively market online without an intermediary targeting the traffic," he said. "That's why I think we've been really successful."
ServiceMagic is adding staff as well. The company is hosting a local job fair in Denver this week and intends to hire 60-70 more people in addition to its current 240 employees.
Online real estate brokerage ZipRealty also has found success on the Web and plans to grow more this year. The company in October said it achieved profitability for the first time and planned to add 1,000 real estate agents nationwide this year, tripling the number of agents it already had in 14 markets. The company secured $13 million in venture capital funding in January 2003, a time when few dot-com companies were attracting such investment funds.
The online brokerage declined to comment on its growth due to corporate activities that prevent employees from participating in media interviews at this time, a ZipRealty spokesperson said. That silence could mean they company has an initial public stock offering or other material event in progress, another indicator that online real estate is a burgeoning vertical.
ZipRealty uses virtual office Web site technology and offers commission discounts to home buyers and sellers who utilize its services.
HomeGain, which matches real estate agents with home buyers and sellers, also figured how to make money from online sales leads while it weathered the dot-com bust. The company recently celebrated five years in the online real estate business and achieved profitability in 2003. HomeGain said it increased its revenue 50 percent, signed up more than 200,000 prospective home buyers and sellers, and added 11,500 real estate agents to its service last year.
The number of real estate agents who use HomeGain's services increased 19 percent from 59,000 at the end of 2002 to 70,500 at the end of 2003, the company disclosed. Agents pay a monthly membership fee to market their services to people who register through HomeGain's Web site, then pay the company a referral fee when a transaction closes.
HomeGain SVP of Agent Success Glenn Houck attributed the company's achievements to its focus on its core business model and conservative approach to the dot-com struggle.
"We've kept our focus on providing high-quality leads to Realtors and the tools to convert them," Houck said.
HomeGain's core service is Agent Evaluator, which enables home buyers and sellers to find and compare Realtors, he said. The company added Home Price Express, which provides exclusive seller leads to agents, in 1999 and launched Buyer Link, which connects potential home buyer leads to broker and agent Web sites, in 2003.
More than 2.4 million people have registered at the HomeGain Web site since the company's inception in 1999. The company has generated more than 1.5 million leads for 70,500 agents from more than 3,200 national, regional and independent brokerages that have signed up for the service, according to a company statement.
HomeGain founder Bradley Inman is also the founder and publisher of Inman News.
Bellevue, Wash.-based HouseValues has received much recognition for its success in real estate lead generation. The Deloitte & Touche consulting firm last fall ranked the company among the 20 fastest-growing technology companies in North America. The award noted the company's growth of 1,258 percent since 2000.
While the Internet is part of the company's lead generation service, CEO Ian Morris said the vast majority of services it provides agents are in the form of television advertising.
"That's a big reason for our success, and a big reason agents like to advertise with us," he said.
Copyright 2004 Inman News
Tuesday, February 10, 2004
By Jessica Swesey
Inman News
Nearly 3.5 million Web surfers, or 2 percent of the active online population, went to Realtor.com in December 2003, according to a report by Nielsen//NetRatings.
Realtor.com was ranked the highest among real estate Web sites in the monthly brand ratings report. The Web site ranked number 202 in the overall valuation of some 3,000 Internet sites. The average time spent surfing Realtor.com was 29 minutes.
Millions of Web users are going to real estate, mortgage and rental sites to research homes, find a real estate agent and calculate mortgage payments. In fact, the majority of home buyers and sellers now use the Web for research before they contact an agent.
Other real estate Web sites on the NetRatings report included Homestore, which ranked 274 overall and had 2.7 million visitors who spent an average of six minutes on the Web site and ServiceMagic, which had 897,000 visitors who spent an average of two minutes on the Web site.
LendingTree had 904,000 visitors who each spent about eight minutes on the site and about 753,000 Web users visited RealEstate.com for an average of seven minutes. LendingTree bought RealEstate.com from Primedia some weeks ago and plans to redesign the Web site.
Some 745,000 people visited HomeGain for an average of two minutes. Homes.com had 436,000 visitors who spent 11 minutes on the site on average. About 504,000 Web surfers clicked on RE/MAX.com for an average of one minute, and 431,000 people visited ZipRealty for an average of four minutes.
The federal government's housing agency was an online hot spot as well. About 688,000 people surfed the U.S. Department of Housing and Urban Development's Web site for an average of 14 minutes in December.
The 10 highest ranked Web sites in the brand ratings report in order were Yahoo!, MSN, Microsoft, AOL, Google, eBay, Amazon, Lycos Network, About Network and MapQuest.
Nielsen//NetRatings measures consumer and business usage of the Internet. ComScore Media Metrix is another well-known Web use measuring service. The two companies use different methodologies and statistical techniques to gather their numerical results, so results may differ in a given month.
Copyright 2004 Inman News
Friday, January 09, 2004
By Marcie Geffner
Inman News
ServiceMagic has added a lender referral service to its online marketplace of real estate salespeople and home improvement contractors. The new lender service connects home loan borrowers to prescreened lenders and mortgage brokers who pay a fee to participate in the program.
"(ServiceMagic Lending) is a marketplace that operates very similar to our original home services segment and our real estate segment that we launched a year and a half ago. We connect consumers with multiple screened and rated providers from whom they can choose," said ServiceMagic co-founder Rodney Rice.
The lending service is being offered through a joint venture with Cornerstone Mortgage, a wholly owned subsidiary of First National Bank of Omaha.
The new program adds ServiceMagic to a long list of companies that already offer home loan borrowers an online service to find a lender or apply for mortgage financing. Companies already active in the space include Interactive Corp.'s LendingTree and GetSmart.com, QuickenLoans, ABN AMRO's Mortgage.com, E-Loan, ForSaleByOwner.com and IndyMac Bank's LoanWorks, among many others. National banks, community banks, mortgage banks, mortgage brokers and real estate brokerages also operate online mortgage services.
ServiceMagic's offering was launched in October. Rice declined to disclose specific metrics, but he said the participation level and results so far have surpassed the company's initial expectations.
"It is going really well," he said.
Online loan operations face an uncertain future given the substantial falloff in mortgage refinancing business that has resulted from slightly higher mortgage interest rates in recent quarters. Shrinking refinance loan volume has pressed lenders to refocus their sales and marketing efforts on purchase-money mortgages, i.e., home buyers.
ServiceMagic's approach is aimed at securing purchase-money borrowers who also want to select a real estate salesperson and home equity line of credit borrowers who also need to secure home improvement or repair services.
"We have a tremendous amount of purchase money and HELOC business. Those segments are stable and that is really what we are building the business around. We weren't building the business around a refi boom that we knew was over prior to our launch," he said.
ServiceMagic was started in 1998 as an online marketplace to connect homeowners to residential contractors. The Web site claims more than 3 million unique visitors per month. The privately owned company has scored $48 million in financing since its inception. Principal investors are Mobius Venture Capital, Sequel Venture Partners, Tango, CertainTeed Corp., Maytag Corp. and QwestDex.
Rice said some percentage-he wouldn't say how much-of the financing inquiries come from people who also requested realty brokerage services. Such crossover selling from one platform to another is a key part of ServiceMagic's strategy, although requests for one type of service aren't shared with providers of other unrequested services.
"Our lenders are seeing an incredibly high level of quality around those applications because we are cross-selling them from one service to a second service. It has been proved over time that when a consumer submits multiple requests via a platform they are of much higher quality. That sets (those leads) apart from spam e-mail or a lesser-quality traffic source," he said.
ServiceMagic also has added a broker option to its existing find-a-realty-salesperson service. The option is a "lead allocation tool" that enables brokers to purchase leads from ServiceMagic, then evaluate and distribute them to their agents. Rice said brokers are "realizing they can add a lot of value to their agents" with such a system.
Copyright 2004 Inman News
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