RealEstate.com, the online real estate portal owned by LendingTree, is planning to enter the real estate brokerage business in select markets during the first half of 2006, company officials said today.
The company did not disclose exactly how many brokerage offices it plans to open, but said it will be a simultaneous launch in likely two or three markets in the Northwest.
The new brokerage operations will not compete for leads with RealEstate.com’s existing broker partners, according to Tom Reddin, CEO of real estate for InterActiveCorp Financial Services and Real Estate, which owns LendingTree and RealEstate.com among other real estate-related Internet companies.
The company provides real estate information for consumers at RealEstate.com and helps connect them with real estate professionals. It also generates Internet business for more than 800 brokers in its referral network through LendingTree.com, affinity programs with Costco and five major airlines, and other Internet channels.
Reddin described the company’s consumer leads as falling into two separate pockets: those with a higher chance of converting to closed sales and those with a lower converting rate. The leads with a higher conversion rate tend to be those coming from the affinity programs and LendingTree.com, while the ones coming from other Internet channels tend to take longer to convert and have lower conversion rates.
“We’ve generated a tremendous amount of pure Internet volume and the majority of brokers in our network are not as interested in that volume as they are the affinity business and LendingTree,” Reddin said. “We see it as a market opportunity we can’t ignore.”
Brokers who currently receive leads from the company prefer those coming from the affinity partnerships and LendingTree because of the higher conversion rates, he said. Those brokers are less interested in pursuing leads coming from other places on the Web, which created an opportunity for the company to go after those consumers.
“Our existing broker network is absolutely important to us and a long-term integral part of our business program,” Reddin said. “We will continue to send them the high close-rate business.”
Bret Violette, who formerly was president of the Weichert Lead Network, last month joined RealEstate.com as a senior vice president and will be concentrating on the new brokerage business initiative.
The company presently is considering all options for its brokerage business model, Violette said, and he couldn’t yet provide details about how the model would be structured.
The company also has not announced a name for the new brokerage companies, which could either be built from scratch or created through mergers and acquisitions.
“We are exploring all opportunities,” Reddin said. “That includes building this ourselves and we also wouldn’t rule out the option for acquisition either.”
While building its own brokerage operations, RealEstate.com also intends to grow its affinity business for brokers in its referral network so they can continue to receive the leads they prefer.
“We’ll definitely continue to do what we’re doing…we’ll grow the affinity business for the broker network and we’ll also be seeking out new affinity relationships,” Reddin said.
According to Reddin, consumer leads will still be handled by the 300-person call center in Charlotte, N.C., where they are called and qualified. Violette meanwhile will concentrate on the brokerage operations in the Northwest.
“I’m thrilled to have Bret onboard. He’s a class act and a successful industry vet,” Reddin said.
Consumers logging on to RealEstate.com can browse for-sale listings, get a home-price comparison, check neighborhood school and crime information, get prequalified for a mortgage, or find a Realtor or lender. They also can change their address or use a utilities sign-up service free, find a home inspector or mover, or get competitive quotes on homeowners insurance.
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