Sparing themselves the experience of driving around neighborhoods in search of “for sale” signs, a growing number of prospective home buyers are hitting the Internet to check out online house listings.
At the forefront of the trend is Westlake Village-based RealSelect Inc., one of the largest online real estate listing services in the nation.
In an effort to snatch the lion’s share of the young market, the company over the last few weeks has reached a series of exclusive deals with American Online and search engine companies Lycos Inc. and InfoSeek deals which guarantee that hundreds of thousands of Web-surfing house hunters will end up at the RealSelect site.
The company launched “Realtor.com” in December 1996 with the endorsement of the National Association of Realtors, a Chicago-based trade group. In its short history, the company has grown into a comprehensive site for home buyers, reporting more than 1.1 million listings for houses in the United States, Canada and Puerto Rico, and more than 231 million hits per month.
The Web site also offers related information on matters ranging from mortgages and community profiles to moving companies and local car insurance quotes.
On April 30, RealSelect announced a multimillion-dollar deal to become the sole house-listing site promoted under Lycos’ real estate section. Executives would not disclose the deal’s value, but sources put it at about $6 million.
The Lycos announcement came on the heels of RealSelect’s $14-million deal with AOL, which was announced March 23. And at the beginning of March, RealSelect signed a deal with InfoSeek for an undisclosed amount.
“The Internet is such a fast-paced, information-based service that it requires its leaders to move out front quickly and maintain the lead,” said Karen Fulton, vice president of communications at RealSelect. “Our goal is to provide a driving business model that helps to continue to transform the real estate market.”
Fulton said the company’s growth has been more closely tied to the boom of Internet use than to the upswing in the real estate market, although that “certainly hasn’t hurt.”
RealSelect generates its primary revenue by selling ad postings on Realtor.com. Basic house listings are free, but real estate agents are offered a variety of options to jazz up the listings. An agent, for example, can create a direct link to his or her own Web page; the link costs $174 a year to create and maintain.
The cost can go up to $349 per listing per year if an agent uses all the bells and whistles, which include photos and recorded narrations extolling a property’s virtues.
While Fulton would not disclose revenues, she said the company has grown rapidly, jumping from about 80 to 200 employees over the last year.
Several real estate agents said they are pleased with the way Realtor.com has helped them generate business.
“I’m doing more business off of the Internet than through traditional means like signs and ads in papers,” said Paul Guess, an associate broker at Prudential California Realtors. “I anticipate that online listings such as Realtor.com are going to revolutionize our business. Realtor.com generates 10 times more business than all of our postings on others sites, and it continues to improve when it comes to features.”
Guess said that more than 50 percent of the homes he has sold recently were posted online.
Although at least five other companies run similar services, none are as large as RealSelect. Brea-based NDS Software operates HomeSeekers, one of the larger competitors. It offers more than 500,000 listings, half of RealSelect’s inventory. However, NDS President and Chief Operating Officer John Giaimo projects that HomeSeekers’ listings will hit the 1 million mark by the end of the year.
“We are closing the gap fast, and frankly, I believe that there is room for more than one company online,” Giaimo said. “The bottom line is that as real estate agents realize that we’re taking them out of the taxi business, they’re embracing the technology. This industry is going to continue to grow for us all.”