Sun 16 Jul 2006
House Values
Posted by Marlow Harris under Real Estate
The Seattle Times recently published its list of local CEO’s salaries, and I saw that locally-based national real estate firm HouseValues CEO Ian Morris’ salary went up 227% since last year. Considering the latest inroads by Zillow and other 2.0 real estate websites have made in delivering an approximate value over the net, I would have thought that HouseValues would be hunkering down and re-examing their business plan. John Cook did make a note that they bought The Loan Page last year, so it’s obvious they’re not putting all their real estate eggs in one basket. If a homeowner can just type in an address and get a “value”, why would they give up all kinds of private information just to be contaced by a real estate weasel who’s under the mistaken impression that they want to sell their home? Zillow has also branched out with their loan page, and I expect other real estate portals to do the same.
HouseValues.com does not get it’s revenue from real estate buyers or sellers, but from real estate agents who are desperate for leads. These agents pay up $200, maybe as high as $500-$600 a month, for zip codes in targeted areas. For this, they are promised a certain number of leads per month.
But read the entries from angry real estate agents from across the country on Rip-off Report.com:
Realtors & Mortgage Brokers Beware!
Please read this notice carefully. Beware of HouseValues.com. They will do a bait & switch on you, they are basically scam artists. They promise you the world and pressure you to join, they say “just try it out” and they won’t lock you into any contract if it really doesn’t work for you. If you hesitate, they call with urgent messages saying another broker is about to buy out all the subscriptions and put a LOT of pressure on you. Then they say just try it out, they tell you if you really hate it, they won’t lock you into any contract (do not believe anything they say) but as soon as they have your credit card and rush you through the sign up process, it is too late.
Once they have your credit card information, they will continue to charge whatever they can on your card, they claim by signing up (regardless of promises your sales rep made to you about not locking you into any contract), you are locked in for 1 year, and in order to get out of the contract you have to “buy it out.”
Click HERE to keep on reading.
Uhhmmm… She sounds a little, uh, cross. There appear to be dozens of other sites that are filled with complaints about this company.
StockLemon.com suggests that HouseValues is not a viable business model, that it faces too many competitors offering the same information for free (i.e., not asking for personal information), and that there is radically increasing customer acquisition cost, since HouseValues already spends nearly 50% of every revenue dollar on line item “Sales and Marketing Expense.” They have recently begun to give seminars to teach agents how to “work the leads”. Seminars are a costly business that will eventually eat into the bottom line, and that in a declining market, their customer base (i.e. agents) will be leaving the business.
If Housevalues.com was providing a valuable service to real estate agents, if the leads were good and the service worked as promised, agents would be ecstatic and happily pay their monthly fees.
However, that is not what happens. Homeowners are promised that they will receive their homes value, online. What they receive, however, is an email or phone call from an agent. Why? Because the information the homeowner enters online is sold to an agent as a “lead”. Even if the homeowner isn’t planning on selling. But each homeowner contact is sold to an agent as a lead because there is not an option on the HouseValues input screen that says “Just Curious” or “Just Wondering”. It’s not the agents fault. They think they’re buying viable leads. It’s not the homeowners fault, as they think they’re just going to get a number spit out of a computer program.
According to the SEC filings on HouseValues, their churn rate, which measures the rate at which subscribers cancel, ranges from 6 to 6.5% per month. Essentially, 72% to 78% of its customer base cancels its subscription every year. This does not speak well of the HouseValues product. It could be that its questionable marketing tactics, the high customer (agent) churn rates, and the importance and validity of such sites as Zillow will soon catch up to Housevalues.com.
12 Responses to “ House Values ”
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October 12th, 2006 at 10:19 am[...] More on HouseValues business model [...]
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August 1st, 2007 at 9:58 am[...] 360Digest » House Values … the homeowner enters online is sold to an agent as a “lead … My own website is now generating more leads for a fraction of the … above, in that your far better off in developing a good web site … http://360digest.com/2006/07/16/275/ [...]
July 17th, 2006 at 1:35 pm
I found out the hardway of course, that RealEstate.com is even worse! They rush you and you don’t sign a contract but they have you answer YES questions and then claim that you OK’d this order. You are automatically signed up for a year and you can’t cancel unless you “buy out” which is the entire year paid up front. They make me quite sick.
I do have to say that my broker uses Housevalues.com and we have gotten viable leads that turned into listings that we sold. So it did in essence pay for itself.
July 18th, 2006 at 7:54 am
There’s a sucker born every minute. House Values, Ubertor, MLSonline, craigslist, Zillow, Red Fin, my website, your website, any tom, dick, or harry with a broker’s license all preying on an unsuspecting public. Real Estate is a complicated business. A good Real Estate agent in the State of Washington is more of a bargain than any lawyer because they can make you money.
Bad agents, or web gurus can cost you. Any person who can sit down with a knowledgable Real Estate agent is dollars ahead of a discounted fee.
July 18th, 2006 at 4:03 pm
Try applying for a programming job there and the other programmers will tell you all that
July 20th, 2006 at 5:24 am
House Values or Just Listed (same company just buyers instead of sellers) does not work for everyone, myself included. I tried the service thinking that it would offer another source of client leads to suppliment my usual lead generation activities, which it did. However, the leads are poor and they often lack contact information so when you send any information you rarely get any feedback or response. My own website is now generating more leads for a fraction of the cost and when I can them up they know who I am and why I am calling, which make them much more open to working with me. There are some who love the tools that come with the service and those that have had great success, but it is a numbers game and some benefit from the numbers while others don’t. You are far better off spending the monthly fee on producing a quality website of your own.
July 22nd, 2006 at 11:17 am
Realty Tracker is the same. I did not even agree to accept their service and they charged my credit card. Then, the very first and only lead I got from them was bogus. Then when I asked them to remove the charge on the credit card, they refused! “Call you credit card company”, they said. During the initial sales pitch, the very slick salesman lied by saying their staff would contact each lead and make sure they were going to buy or sell in the next 3 to 6 months. Then, the sales manager slipped up and told me a machine calls each number and makes sure there is an answer. That is all. So, I said I was not interested, but then they charged my account anyway!
Agent Connect and Lending Tree are the same. There isn’t an easier sales target than a salesman. Realtors are salespeople with giant bulls eye targets on their backs. The faster we realize that fact and wise up, the faster these guys will dissappear. We need to return to the old ways of good old fashion farming along with a good website to show the fruits of our hard work. You’ve got to list to last. If you don’t, these guys will sure see you as a target.
August 1st, 2006 at 12:01 pm
HOuse Values is a rip off. They are not “leads”. If someone is already working with an agent, any real estate person will tell you that is not a “lead”.
I would like to sue House Values for defrauding members by saying you get leads, and that they check them out. I also get leads with bad emails, or obviously phony information, (ie. name Bleh Blehh,etc.) They still send these to me. They need to be honest and tell prospective agents, these are not really leads because these prospective buyers often already have an agent. So I tell these buyers about a property so they can go tell their agent about it. Also, they trick you into contract length saying its a 6 month trial. They fail to tell you it automatically goes to 12 months and increases by $100/month, unless you remember to cancel by the 15th of the 5th month. They dont tell you this. Of course it’s there in the fine print, but they dont point it out to you.
I feel sorry for these people, selling their souls for money.
November 11th, 2006 at 2:27 pm
Id have to agree with what Andrew said above, in that your far better off in developing a good web site and implementing a blog as part of it. I receive about 2-3 calls and probably 15-20 emails daily from SEO’s, lead generation company’s, Marketing firms with every promise you can think of. My answer is routine now…I just politely say “Thanks for the offer, have a nice day, Good bye” and hang up. Once I know the call isn’t a lead…I kindly cut them off within seconds and get rid of them.
Just work on your websites by continually adding fresh content…Rich Unique Content about your specific market will do wonders for your web site & leads in your email. I’ts no big secret…Just add Content, and try and make a habbit of doing it every day if you can. Thats the beauty of Blogs. Take care
October 24th, 2007 at 4:04 pm
Interesting comments. I can understand frustration from subscribers, both past and present. I considered not replying since Marlow referred to real estate professionals as “weasels.”
Posting a negative comment about a company is a waste of time. As we all know there isn’t a company on this planet that doesn’t have a negative customer base.
I have purchased over 1,500 leads from House Values in the last 22 months costing $25,000 year to date. I have converted those leads into over $300,000 in commissions. As you can imagine I am quite satisfied with the results. I understand frustration with leads not being leads and phone numbers not being accurate and so on.
I also know dozens of agents who spend thousands and thousands of dollars each year who anxiously wait for an email or phone call on their advertising. Same concept guys, only I’m guaranteed 66 contacts a month and it aint as glamorous.
-Thank you.
July 15th, 2008 at 4:49 pm
Greg Nino, you sound just like my sales rep at HouseValues who, if he were a real estate agent, would “buy EVERY lead houseValues had to offer in my area”.