Comments on: Is HouseValues really gaining traction or are they just churning agents?

By: Glenn Sanford

Glenn Sanford — Fri, 26 Jan 2007 06:18:24 +0000

I wrote a blog post yesterday on my blog with regard to the massive layoff that HouseValues recently did. Essentially their business model was flawed from day one. Considering the average close ratio of 2% on internet generated leads and an average cost of leads being around $50/lead. 50 leads would cost $2500. If the average sale is say $300,000 with a 3% SOC of $9000 commission the advance referral fees would be over 25%. As was pointed out this is post split with the office you are with, so assuming a 60/40 split and the agent pays the 25% off of just their side, the agent net is only 35% not including all of the hours necessary to cultivate 50 leads to get one and then the showing, negotiation and whatever else is necessary to get the deal to close.

I do have more commentary on http://www.glennsanford.com/

By: Tami

Tami — Sat, 06 Jan 2007 01:16:29 +0000

Hello,

I have used HouseValues and JustListed for 3 years now with great success. Yes, the leads generally take awhile to turn into transactions, but we are finding that with all internet leads, not just HouseValues. I have taught several classes on internet lead generation, and some specifics ones on HouseValues (in my market center, to help fellow Housevalues agents) and found that most people were not working the system. The thought was almost the lead was suppose to be done deal. It is a LEAD, you have to work it. The best way being face to face contact. I have to wonder how many of the agents that have said here they had no luck with the leads were hand delivering their CMA’s? I find that until I do that, the lead believes I am just a computer response and not a human. If one of you is currently with HouseValues, I would be happy to give you some pointers and help you out.

By: Jillayne Schlicke

Jillayne Schlicke — Sat, 06 Jan 2007 00:47:07 +0000

Hi Reba,

I taught a clock hour class called “Lead Generation” in December. We had about 25 agents there. This was the first time out teaching the class so I never know what I’m going to get. We had mixed reviews from the Realtors in the room on House Values. The agents who used HV and rated it good reported that it takes a LONG TIME to incubate the leads, 12-18 months but that the leads do eventually turn, if you continually contact them.

By: Reba Haas

Reba Haas — Fri, 05 Jan 2007 19:44:35 +0000

I’m sorry to hear you also had a bad experience with HV although I’m not surprised it is what your experience ended up being. The firm supposedly was started by a former real estate agent so it’s difficult for me to give them any slack because this guy should know what it’s like for agents and rather than learning to work well with agents and truly making his company successful his sights are all set on the idea of making a killing on some stock options and C-level pay. There are so many companies that rely on agents for their business it’s sad especially since many of those business models are built on us continuing to have a high turnover rate.

By: Seattle area Realtor

Seattle area Realtor — Fri, 05 Jan 2007 18:08:28 +0000

I had similar experiences with HouseValues. I spent over $1000/month for my 1 year contract (which they are VERY protective of and don’t give any slack when the “leads” turn out to be worthless). I also was contacted by a VC guy and told him my opinion of the company and it’s lack of quality leads. I still have not received any income at all from any of the leads I received from HouseValues. Not a single sale.

I eventually negotiated VERY hardball to get a reduced contract, and then I took it a step further and paid their 50% early contract termination penalty (i.e., I had to pay for 50% of the entire remaining cumulative contract costs to get out early without them bringing legal action against me, which they clearly threatened me with if I just stopped paying for the subscription each month). I figured paying 50% was better than 100% since it was all sunk costs of zero value.

During this time, I happened to have my credit card number stolen (not related to HV) and had to cancel my card account. As a result my final penalty payment was not paid since my billing was on auto-payment and I had just put the process out of my mind. Instead of having the simple courtesy of a single phone call letting me know that there was a problem with payment, they immediately sent my account to a collections agency with ZERO advance warning or notification of a problem. They threatened to put it all on my credit score records if I did not pay immediately within one week. I gave them my new credit card number immediately that day and HouseValues is now just a bad expensive experience that is behind me. A couple other agents in my office have used them and all have gotten out of the program, too.