Did you sell your SOLD before the bell?

As you may know, HouseValues (NASDAQ: SOLD) is a publicly traded company. As you may not know, they reported their earnings for the quarter and year ended December 31, 2005, this afternoon.

To quote the highlights from the press release from MSN MoneyCentral

“For the year, HouseValues reported annual revenue and net income growth of 82 percent and 101 percent respectively. For the quarter, HouseValues reported revenue of $25.2 million, an increase of 75 percent from the comparable quarter last year. Fourth quarter 2005 net income was $4.0 million, up 117 percent from the prior year. Fourth quarter 2005 earnings per diluted share were $0.15 compared to $0.08 per diluted share in the fourth quarter of 2004. Net income for the fourth quarter and the year included an increase of $1.2 million as a result of the favorable settlement of a state tax audit.”[photopress:hv_logo.gif,full,alignright]

Blah, blah, Growth Opportunity, blah, blah…

“A recent National Association of Realtors study showed that 77 percent of consumers used the Internet as part of the home search process in 2005. The study also found that buyers who use the Internet to search for a home are more likely to buy through a real estate agent than non-Internet users.* Real estate and mortgage professionals are projected to follow consumer behavior, dedicating more of their marketing spend online than to any other medium by 2009, according to Borrell Associates.”

Blah, blah, Mortgage Opportunity, blah, blah, blah….

“On November 3, 2005, HouseValues announced its acquisition of The Loan Page, Inc. TheLoanPage.com helps consumers find the best deal on all of their home related financing needs by providing them with up to four competitive bids from the nation’s leading lenders.”

So far so good, right? Not according to “Buy on the rumor, sell on the fact” nature of the Street…

To quote another press release from MSN MoneyCentral

“Shares of HouseValues Inc. plunged in aftermarket trading Tuesday, after the company reported a jump in fourth-quarter profit, but said its first quarter and full-year 2006 results would come in well below Wall Street expectations. Shares of the online subscription service for real estate agents and mortgage bankers dropped $3.26, or 25 percent, to $10.14 in after-hours electronic trading, after closing down 25 cents at $13.50 on the Nasdaq.”"HouseValues said it expects first quarter 2006 earnings of 3 cents to 4 cents per share, including about 3 cents per share in stock option expenses. Revenue is projected at $25.5 million to $26 million. Analysts were expecting earnings of 14 cents per share, not including stock options, on revenue of $28.8 million.”

What’s your take on this? Does management think an upcoming war with Zillow is going to hurt HouseValues earnings? Is the slowing housing market at fault? Have enough people seen Ardell’s “Bottom feeder post” to cause this market cap hemorrhaging? Can TheLoanPage.com mount a credible threat to LendingTree.com? Can Batman & Robin save us?

Conspiracy theories and comments?

Comments

  1. Speaking of Housevalues, here’s a link to a very unhappy camper via the “Rip off Report.”

    http://www.ripoffreport.com/results.asp?q1=ALL&q4=&q6=&q3=&q2=&q7=&searchtype=0&submit2=Search%21&q5=Housevalues&submit=Search

    I wonder if SOLD will actually lose Realtors in a difficult market? Marketing and lead generation expenses may only go so far.

  2. I checked HouseValues a few times after the Zillow launch and wondered why it took the market so long to react to the news.

    HomePages was hardly innovative it turns out…

  3. John Cook had an interesting analysis of this HomeStore story today (along with a comparison to Zillow).

  4. I think Ardell’s “Bottom feeder post

  5. “Never doubt that a small group of thoughtful, committed citizens bloggers can change the world market. Indeed, it’s the only thing that ever has.”

  6. I know HouseValues is famous (maybe ‘infamous’ to some!) for the lead generation services it provides. Everyone seems to focus on how the leads are captured, the quality of the leads, etc…but I never hear anyone discuss the CRM services they offer to go with those leads. It seems to be marketed as a value-added option to obtain more lead generation subscribers. Does anyone know if customers are happy with the CRM solution they provide? If the lead generation begins to drop because of new online services being introduced, my guess is HouseValues could shift the focus of their product offerings.

  7. After reading the “Rip off Report” I noticed something interesting. All the complaints about HouseValues are from real estate agents being charged for bogus leads. Meanwhile, most of the complaints from LendingTree are from consumers w/ bad experiences with lending company they were matched up with.

    So are there any consumers that like service the get from HouseValues? (one would hope) Do mortgage professionals like LendingTree more than realtors like HouseValues (it would seem both are selling leads for $ business models, with minor variations). If so, why?

    From the consumer standpoint, the LendingTree model is better since I get 4 mortgage professionals competing for my business, with only 1 web form entry. With HouseValues, I only get a call from 1 agent (increasing the likelihood I’ll be unhappy with whom I end up doing business with).

  8. And a day later, the Seattle Times picked up this story… However, it looks like you’ll have to stick with RCG if you want some actual analysis. :)

  9. Kris,

    Their CRM solution is actually pretty good as far as most agents are concerned. I used it for about a year, and was fairly easy to use. However, with SalesForce’s release of AppExchange, a slew of customized Real estate CRM solutions has been released, that seem very powerful.

    http://www.salesforce.com/appexchange/detail_overview.jsp?NavCode__c=MF8h&id=a0330000000KxmeAAC

    The Real Estate CRM market does seem ripe for the picking.

  10. Thanks for the input, Jimmy. The reason I brought up CRM is because of comments I heard from HouseValues CEO during a recent interview on the Motley Fool. Unfortunately, the audio file is part of their premium content, but it is referenced in today’s article about HouseValues:

    http://www.fool.com/news/commentary/2006/commentary06030102.htm

    He mentioned the phrase “capture, cultivate, and convert” several times during the interview and made it a point to talk about training and CRM tools they provide in addition to the leads. If that training includes instructing agents to behave like those in the above article, they may want to think about changing the curriculum!

  11. Here’s a link below to Claudia Wick’s (HouseValues Real Estate Training Director) Blog regarding success stories at HouseValues–in providing the other side of the coin.

    In other news, the SOLD shares continue it’s decline to $9.71 or nearly a 30% spanking in today’s trading alone. I think this “gem” via Motley Fool recommendation is quickly turning out to be a miss for those Fools who own SOLD. Buying opportunity?

    http://agentceo.blogspot.com/

  12. Barry Levinson says:

    I am a former Housevalues.com Realtor. I used their “services” for ten months. Hundreds, probably even thousands of Realtors accross the country are angry with Housevalues. They use deceptive sales practices to push you into a contract. Their so called leads are horrible. Things such as fake names, fake email addresses, fake phone numbers are what you get. They pawn themselves and their so called coaches off as real estate marketing experts but are nothing of the such. Their marketing tactics to fool consumers into going to their website to “find out their homes value” are disgusting. None of these consumers want to sell their home let alone be contacted by a real estate agent. Not too mention the consumers that go to their site to get the advertised “ne listings in your email everyday”, another sleezeball tactic used by Housevalues.
    Bottom line is that realtors don’t like them, consumers don’t like them. I filed complaints with the Better Business Bureau and State Attorney General in Washington state.
    My advice STAY FAR AWAY FROM THEM!!!!

  13. Thanks Barry. My previous posts indicated that my concern was that there was no disclosure to the consumer regarding what the site was REALLY about. Some of these lead generating sites work more like “fly paper”, with no consumer awareness whatsoever.

  14. Nancy Kfoury says:

    Do NOT do business with Housevalues for ANY reason. They will promise you the world, deliver absolutely no good leads. charge you $800.00 a month for leads that say their names are Mickey Mouse and Donald Duck. To add insult to injury, when you try to cancel, they threaten to destroy your credit and your life. They need to be put out of business IMMEDIATELY.

  15. K. French says:

    Just today, after recently ending a 6 month contract costing $329 a month for 10 leads, I was told that though they didn’t make the lead requirement ( I was 13 short) , that they would not be refunding me and felt what they did provide was sufficient. I have copies of the emails from RYAN at customer service who basically says this decision is based on his opinion and NOT the contract I agreed to.

    He stated that the high amount of leads I returned ( that are noted as not counting against my total as they were returned for valid reason within the timeframe) was part of his decision making process. Well, with undeliverable email addresses and names like HARRY MONKEY, it is pretty clear WHY they were returned, but apparently he didn’t take the quality of the returned leads into question while making this personal decision about a business agreement.

    I strongly URGE anyone dealing with similar issues to file complaints, send letters, notify the admins of sites they advertise on and KEEP FIGHTING. At some point, they will have to realize THIS MANY PEOPLE can’t be wrong.

    I have the correspondence to prove my case and urge everyone else to deal ONLY via email so you will have copies of the correspondence as well.

    K. French
    Va Beach, VA

  16. Hi KFrench,

    Thanks for sharing your experience. What a bummer. I wonder if there’s potential for a class action lawsuit in there somewhere. Attorneys what do you think?

  17. The more and more buyers use the internet, the more companies like housevalues will turn up. Buyers should just continue too use a realtor and trust those of us whom are train and work in real estate.

  18. I must disagree with many of these negative comments made about HouseValues. I have subscribed now into my second year, and yes, this year the lead commitment fell short and when I brought this to the attention of the customer service department they did an audit and I received an email that they were crediting me by way of a free month for the shortage over the past 90 days (short by an average of 8 per month).

    As for “bogus leads” certainly some are not valid and HV is willing to make an exception for thiose if you bring them a reasonable explaination, and for some, they require nuturing as with any prospect in any business. In recent years, much of the online versus offline prospects are in the information gathering stages and if you keep an open mind with a mndset to asssit them and earn the place in their mind as a trusted go-to professional, and if you work the lead with not only email but actual call follow-ups, a number will become viable. Just because a lead says that they are not moving for, lets say, 1 year… it does not mean that they won’t be doing so sooner and if you keep in mind “tommorow will soon be today” you will have business soming down the road from these online efforts while working the offline (sign/open house and ad calls).

    I challenge any agent that feels that these type of online leads are not legit to look into themselves as to if they are truly working the lead list daily or just sitting in fromt of their PC waiting for a lead to magically call them to come-list!

Trackbacks

  1. [...] Robbie Paplin at Rain City Guide asked some good questions and provides a link to this great website, The Rip-Off Report. Robbie asks : “Does management think an upcoming war with Zillow is going to hurt HouseValues earnings? Is the slowing housing market at fault? Have enough people seen Ardell’s “Bottom feeder post

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