Why HomeGain Beats Zillow

32 Comment(s)

1. Arlingtgon Virginia Condos -- Jay | Apr 29, 2007 | Reply

   Homegain may be on its way out as more realtors begin participating in real estate 2.0. After all, once a realtor is generating their own leads through organic rankings they no longer need to spend $$$$ on 3rd party sources for leads. In fact, real estate 2.0 agents tend to be frustrated that these 3rd party vendors got out in front of us on generating website leads. Many of us spent $1000s on these leads to find them often lame at best.

   As more realtors “get it” by reading blogs such as this, HomeGain which used to rank everywhere towards the top, will find it rankings disappearing around the country and they will have to rely on ppc to get traffic to generate leads….

   Kudos to HG for being out in front of us. But now many of us are way out of front of HG and they will not catch up as we begin hiring teams to work all the leads we are generating thus taking away some of the prospective clients who would have had to purchase leads from HG.

   Joel, drop me a line about the blogroll when you get a chance.

   jay

2. shaun mclane | Apr 30, 2007 | Reply

   I tried paying HG a few months ago for their leads service, but the idea of competing against hundreds of other agents wasn’t for me. Don’t get me wrong, I know we compete everyday with hundreds of other agents, but to pay for something, and have the poor results we did, I just wasn’t thrilled. I’m sure I could have spent more time on my profile, etc, but I gave it 30 days and ran. Zillow’s EZads on the other hand, have been very affordable, and I have had decent results. From a branding point of view, Zillow is right on the money. If nothing else, I know when my ad is on the screen with my logo, it’s the only Realtor ad on that screen. The consumer may not click on the add, but they’ll have seen my logo. Good enough for me at a penny a piece.

3. Louis Cammarosano | Apr 30, 2007 | Reply

   Hi Shaun
   Thanks for your comments.

   Sounds like you tried our agent evaluator program whereby you compete with other realtors for the business of the leads we send and it didn’t work out for you.

   This product works for many. For example we just had one agent reach the million dollar commission mark for leads converted through the agent evaluator program.

   For those agents who do not like the competitive element of the Agent Evaluator program, HomeGain also has exclusive lead products.

   For example, we have a product similiar to Zillow’s ez-ads, called Source 4Sellers, one which we believe is superior as it provides the realtor with EXCLUSIVE positioning on every page for which HomeGain renders a HomeValuation in a particular zip code.

   The ad placement displays the agent’s contact details and a direct email link to the agent so the consumer can easily contact the agent. A click to call feature will be added shortly.

   With Source4Sellers the agent also gets a number of exclusive leads from consumers that request a professional Realtor valuation from the featured exclusive agent.

   We also have another program by which HomeGain will drive traffic to your own web site on a pay per visit basis-often at prices lower than you would have to pay if you went through the trouble of trying to manage a key word campaign yourself on Google or Yahoo.

   Since most of the traffic we send gets driven through multiple pathways our agent customers tell us that the traffic quality is higher than traffic coming straight off google or Yahoo paid search links.

   Regards,
   Louis

4. Karim Tahawi | Apr 30, 2007 | Reply

   Being part of the Web2.0 effort in real estate, we naturally view this from the agent perspective. That is, we give pro’s the tools to demonstrate they are local experts and then make it easy for the customers to follow organically. Of course if you arent NOT an expert or cant otherwise demonstarte that you have local knowledge, you will not benefit from this system. In that circumstance, consumers may still get routed to poorly qualified pro’s based on their ability to pay lead gen companies to capture consumers. It may be some time before consumers wise-up and realize that most lead gen companies are making false promises (I am not implying HomeGain does this in the least).

5. Mitch Ribak | Apr 30, 2007 | Reply

   I have to say that I have been using Homegain’s Buyer Link program since August of 2006 and have dropped all my other traffic programs. I pay a reasonable amount of money to generate around 8,000-10,000 unique visitors per month. When I was doing Yahoo and Google myself (I’ve been involved with Internet Marketing since 1996) and generating a 7% capture rate…not to bad. When I made the switch, which I did a few months of testing first, my capture rates went up to 16.4% and we are testing a new form that might get us as high as 25% or more. My belief is the multiple click process that Homegain uses generates more qualified leads than traffic coming from Yahoo and Google.

   The reality with all of the lead generation tools whether doing them yourself or buying from a third party is that if you don’t have good systems in place to convert your leads to sales it’s really irrelevent. I’m always available for conversation on lead generation and conversion. My new marketing company 100MPH marketing specializes in taking leads from the web to the closing table. My Real Estate company does 100% of it’s lead generation and sales through the Internet. Currently we are number 2 in our market out of 392 companies with regards to working with buyers. Homegain is a big reason for that and will continue to be a large contributor to our marketing efforts.

   Mitch

6. David G from Zillow.com | Apr 30, 2007 | Reply

   Karim makes a good point. Real estate is a relationship business — the online marketing opportunity today is that you can literally meet clients online. That’s why blogging has exploded amongst Realtors. Consumers can now choose to call the Realtor who has the best neighborhood blog, or who provided the best answer to QnA on Zillow, or who gave the most useful estimate on My Currency.

   And that’s how advertising works vs buying leads; it’s pull marketing vs push marketing. I took a look at Source4Sellers; from a brief review, this product it is nothing like EZ Ads from Zillow. EZ Ads is an advertising product — you pay a penny each time someone sees your ad on Zillow.com. HG’s S4S is “exclusive leads”. If a Realtor were to make a choice between the two, it’s a matter of style; pull marketing vs push marketing. What I personally like about advertising (and pull marketing in general) is that the consumer is in control. The bet we’ve made at Zillow is that by putting the consumer first, we’ll better serve our industry clients (advertisers).

   I also think advertising is an important parallel strategy to blogging etc. It cuts through the noise that’s an unfortunate byproduct of the popularity of social media. There is a lot of competition for a consumer’s attention on the web but we’re seeing that the two can work well together — a good example is the combination of posting listings on Zillow (it’s free) and running EZ Ads for those houses. This is a GREAT solution for marketing hard-to-sell properties. For each $10 you spend, your listing’s ad is viewed 1,000 times by people searching for homes in your Zip code. In terms of clicks, these are some of the best performing EZ Ads.

   Shaun -
   Thanks for the feedback. It’s great to hear that EZ Ads are working for you.

7. Katrina | May 1, 2007 | Reply

   I guess I’m the only consumer reading this blog - but I just love the discussions you bring up.

   As a consumer, I prefer Zillow because it’s easy to use and provides much more information. But this post got me thinking maybe I was missing something. So I hopped on over to HomeGain and tried out a couple of things. After the glowing review above, I was disappointed. There doesn’t seem to be much “meat” there, unless your only goal is finding a realtor.

   What about the other huge piece of the puzzle - for people looking to sell homes? Or just find out what their home is worth, or check on real estate trends in the area? Yes, there is an estimation tool, but it’s nowhere near as powerful as Zillow’s. My husband and I just remodeled and doubled the size of our house. Missing is the function to be able to add this information and update the value.

   What if I did want to list my house on HomeGain at a reasonable price given the recent work? I suppose I would have to hire a realtor, which as a consumer seems the main point of the site. I think consumers are moving away from this type of “push” and more towards the “pull” model, as mentioned in a previous post; at least, many people I know are.

   HomeGain may be great for realtors, but personally I don’t see it holding a candle to Zillow in terms of features and flexibility for the homeowner.

8. David G from Zillow.com | May 1, 2007 | Reply

   Katrina -

   Thanks so much for your feedback; I’m glad you’ve found Zillow useful.

   Once you’ve completed your remodel, you can publish edited home facts on Zillow - just click on “edit home facts” on your house’s detail page. Note that your Zestimate value won’t change unless the public records change (we’re working on that and hope to drive Zestimate values off owner data later this year). You can use the My Estimator tool to do what-if analysis and get a feel for the impact the changes will have on the value of your house. Also note that if your upgrades required a permit, we’ll receive that new information from your County (usually when the publish the next tax roll).

9. Louis Cammarosano | May 1, 2007 | Reply

   Hi Katrina

   Thanks for trying our site.

   You are correct that HomeGain’s goal is to attract those consumers who want to find a Realtor.

   HomeGain is not interested in attracting consumers who want to spend hours on our site looking up the prices of their neighbors’ homes just so we can sell banner ads. (which isn’t profitable in any event)

   We are interested in consumers who want to find great Realtors.

   Matching consumers with Realtors is the service HomeGain provides.

   Zillow provides great tools for people looking to sell their houses with out the assistence of a Realtor.

   HomeGain believes that Realtors play an important role in not only assessing how much your home is worth but going out and actually getting that value for you.

   For that reason, HomeGain’s Homevalation tool does not strive to give an exact valuation - we provide a range- as we believe that its nearly impossible to provide such precise valuations.

   A house is only worth what you can get for it and a Realtor helps you get your price. Trying to value homes precisely through market data is not the same as the minute by minute market values provided by Nasdaq with respect to heavily traded stocks.

   Because of the transparency of the stock market you don’t need a stock broker to get you a better deal on Yahoo or Microsoft stock.

   But often to get the best deal on your home you need a Realtor.

   HomeGain’s service is designed to help consumers who are interested in working with Realtors find one.

   Regards
   Louis

10. David G from Zillow.com | May 1, 2007 | Reply

    “we are interested in consumers who want to find great Realtors.”

    Really? Surely consumers who use HG will find the Realtor who paid to be found. What is it that guarantees that that Realtor will be great? Selling Realtors exclusive access to consumers by Zip code is obviously not in the interests of helping a consumer find a great Realtor.

    A website can not replace a Realtor. It can’t sell a house or negotiate a deal.

    Realtors compete for clients on Zillow just like they do offline. Their contributions to the site are transparent to consumers. That competition is in the best interests of buyers and sellers.

11. Louis Cammarosano | May 1, 2007 | Reply

    David

    I agree that competition is in the best interest of buyers and sellers.

    HomeGain’s Agent Evaluator program provides a forum that explicitly exploits competition among Realtors.

    With Agent Evaluator, the HomeGain consumer can have from 6-12 Realtors competing for his/her business.

    Our Agent Evaluator program promotes competition among Realtors in a manner far greater than any “competition” created for the purchase of ez-ads on Zillow!

    Some Realtors like your customer, Shaun Mclane, choose to cancel their participation in our Agent Evaluator program because they are unable or unwilling to compete with the other Realtors in the program. In Mr Mclane’s own words he ” I could have spent more time on my profile, etc, but I gave it 30 days and ran.” Mr. Mclane chose instead to go with Zillows less competitive offering -ez-ads- to gain some branding exposure.

    There is nothing wrong with this type of advertising for Realtors and HomeGain also offers it -but on an exclusive basis.

    There is nothing harmful for HomeGain consumers to see exclusive placement of agents on our site, especially when HomeGain offers access to thousands of other Realtors through our Agent Evaluator product and through our buyerlink product.

    Regards
    Louis

12. Katrina | May 1, 2007 | Reply

    David, I have actually updated the value of the house on Zillow - great tool by the way. And I love the graphs showing average appreciation rates for the zip, city, county and nationwide.

    Louis, we found that the best deal for us as consumers is not necessarily a Realtor. If you are in the Real Estate business, doesn’t it make more sense to appeal to the entire market (FSBO’s, rent-to-owns, Redfin, etc) than just the share looking for a Realtor? It seems to me that many (not all) Realtors are stuck in a 20th century model of thinking they “own” the market or information about the market. This attitude more than anything has lead me to want to deal with other consumers directly. I can type the same things into Google and get the same results instantly just as well as the next person.

    David, I think your site more than anything else helped us, on our own, appropriately price our house, based on the market in our area, which has very wide ranges ($200K to $1 million plus). We used Zillow before deciding to remodel and also used it when we set the pricing in the purchase option we signed for our home. Slowly we are seeing more people (including Realtors) list homes for sale in our area on Zillow as well.

    We actually ended up with a rent-to-own deal that puts the option price of our home at $370,000. (Say what you want about Rent-to-Own, but it worked out for us) that price is higher than the Realtor we met with recommended. I do have to say she was helpful, but what she offered wasn’t anything we couldn’t easily do for a lot less on our own. In fact, the add that lead to our agreement was posted on Craigslist - for free, in less than 15 minutes.

    As a consumer, we did investigate all options. We considered FSOB, selling through a Realtor, and renting. Those Realtor adds about “what hard work it is” to sell a home, really make a good case to at least check it out. But, in the end, it just came down to two families working out something that benefits both of us and saves us both money (with a little help from our online research skills and some great sites of course).

13. Incredible Agent | May 2, 2007 | Reply

    This is an interesting discussion. There’s one thing that most people seem to forget…No matter where you get your lead, you still have to convert it. In truth it doesn’t really matter if you beat HG in google or yahoo, you still need to capture the lead when they get to your website/blog and then you have to convert it to a client. Obtaining a lead is simple…converting that lead to a client is where the real skill comes into play.

    In regards to all this talk about Zillow vs. HomeGain…I didn’t know we were comparing the two companies. It’s pretty simple to me. HomeGain=1.0 and Zillow=2.0. I don’t think 2.0 really means a whole lot because I would much rather have HomeGain’s revenue and operations than Zillow’s PR machine and startup costs. Overall, it’s hard to argue against HG’s note in this blog post. (at least at the moment) More revenue, more traffic, more clients, more home listings, better search rankings & of course less love from the media. I understand and I definitely get it. However, Zillow has done a great job with their product and an even better job with the press.

    Kudo’s to both camps for their success. Only time will tell who will come out on top.

14. Rob Arambasich | May 5, 2007 | Reply

    Zillow attempts to do the impossible. Only a (trained and competent) person should estimate market values, using accurate and up-to-date information. Zillow’s methodology is flawed from the get go.

    HomeGain refers consumers to the local realtor who pays the highest referral fee. Could be a great realtor, could be a terrible one. Simply a random hit or miss proposition.

    You both have your flaws so why don’t you guys quit kicking sand on each other and worry about how best to serve the consumer. Or is that not a goal??

15. Katrina | May 6, 2007 | Reply

    Again, then you return to the argument that the only person who can price a house is a Realtor. I’ve seen the market estimations used by the Realtors for our house. Presented in a nice package, but nothing I couldn’t learn on my own by simply visiting the tax office, driving around my neighborhood collecting for sale flyers, and doing some internet research.

    I guess it boils down to time and money. Perhaps if you are selling an expensive property and have very limited time, then that is what you are looking for. But is there some sort of special skill that the average person can’t pick up?

    There is a bit of a difference in what we are talking about here:
    1. A site that separates consumers from each other by “feeding the middle man” real estate market.
    2. A site that allows consumers to level the playing field and directly connect with other consumers.

    For my house, the fees at 6% would have been around $25,000. I cannot justify that a Realtor could possibly do that much work so as to actually earn that much money. I did also consider Redfin, which has a more consumer friendly, a-la-carte type pay for service system. They are looking at a new way of reaching consumers, and that is refreshing.

    I know I’m probably in the minority here on a real estate blog read by real estate agents, but I do love that you all are willing to discuss these things.

16. Louis Cammarosano | May 6, 2007 | Reply

    Rob writes:
    “HomeGain refers consumers to the local realtor who pays the highest referral fee. Could be a great realtor, could be a terrible one. Simply a random hit or miss proposition.”

    HomeGain provides the consumer with a realtor referral with most HVAL’s rendered on the site. Homegain encourages the consumer to contact that realtor. If there is not a fit between the consumer and the realtor, we encourage our users to participate in our agent evaluator program whereby consumers can compare realtors on an apples to apples basis. http://www.agentevaluator.com

    Unlike Zillow who claims to be the “Kelly’s blue book of home valuations”, HomeGain makes no such claim on the accuracy of its homevaluations. (a foolish analogy as cars are depreciating assets, while homes are assets that appreciate).

    Rather, HomeGain’s web site is designed to educate the consumer and to help the consumer find a good realtor.
    Some consumer tools on the HG site:
    http://www.homegain.com/real_estate/index?ht=hp_rnav_tools
    http://www.homegain.com/commission_calc/landing?ht=ccalc_home
    Yahoo’s Find A realtor Center powered by HomeGain:http://realestate.yahoo.com/Realtors;_ylt=AggcItiXHl4cifRP8YTG4cmkF7kF

17. Mitch Ribak | May 7, 2007 | Reply

    It has been an interesting conversation so far. For Katrina: I work with lots of customers who are trying to sell their homes on their own. I offer a free service of helping them with the contract and answer any questions they may have. I do this because I have seen many many FSBO deals that have horror stories. You won’t really know if your rent to own deal is a good deal until you go to close and to see if it appraises. Remember, if it doesn’t appraise it doesn’t matter what Homegain or Zillow says about your property value. That is the difference between using a Realtor than not. However, I agree with you on saving money on the listing if possible but be sure you know all the Real Estate laws or at least have a Real Estate Attorney help you with the process. Your liability can be extremely high if you make a mistake.

    The reality is that when you don’t use a Realtor you take away your biggest marketing tool….the MLS where 90% of the people look for a home…through their Realtor. As far as from the buyers side, even as a consumer before I became a Real Estate Broker, I would never buy a home without a Realtor. They know the right questions to ask…if they are good.

    As far as Zillow vs. Homegain: I can tell you personally that I have used many different lead generation programs out there with many different companies. The reality is that no matter how you get the lead, it’s all about conversion. If you don’t know how to convert an Internet Lead to a sale, then you are just throwing your money away.

    I have gone on both Zillows site and Homegains site with regard to valuations. On my house they were $150k off the value and Homegain was about $100k off the price of my home. That is why you need a Realtor to determine the value of your home. No company has the immediate stats and can tell that your home is on a canal or golf course, etc. They are good starting points but I don’t know that they should be the end all of pricing. I believe Homegain informs the consumer of that. Personally when we go on a listing appointment and they have priced it through Zillow, they are very happy to hear that the price offered on Zillow is to low for the market.

    I can tell you that Louis is a great guy and has been excellent to deal with in all my dealings with Homegain. When I have had any questions, they have either answered the phone when I called or have called me back within a short time. I went to CA a few months ago to meet with them because I do spend a lot of money with them. They were even better in person and took plenty of time with me to go over my thoughts. Their staff has been great. Can you tell I’m a big advocate.

    From a marketing persons perspective, I would prefer to drive the traffic to my site and let me do my magic on my side. At this time we don’t take on to many listings as I don’t want to market something that I know won’t sell. However, if I end up getting more into Listings I don’t mind competing with other Agents because our company has a great reputation and are very active in the community.

    I’m always available to help so if anyone out there has any questions on how to become better at this whole thing, don’t hesitate to email me.

    Have a fun day!

    Mitch

18. USA | May 7, 2007 | Reply

    As more realtors “get it� by reading blogs such as this, HomeGain which used to rank everywhere towards the top, will find it rankings disappearing around the country and they will have to rely on ppc to get traffic to generate lead.

    http://www.gordoniihoodia.net

    i must share I have gone on both Zillows site and Homegains site with regard to valuations. On my house they were $150k off the value and Homegain was about $100k off the price of my home.

19. Paul | May 7, 2007 | Reply

    Rob writes:
    “HomeGain refers consumers to the local realtor who pays the highest referral fee. Could be a great realtor, could be a terrible one. Simply a random hit or miss proposition.�

    I wanted to add a comment to the note above. Also want to thank everyone for their comments - very interesting to read. For everyone’s info, I’ll disclose upfront I am part of HomeGain.com.

    One thing HomeGain realizes about the consumer is that finding a good agent is not an easy thing to do. Most of us rely on word of mouth, a relative, friend, family member to refer us to a good agent. We don’t know what we are getting when we work with a random agent. There is always a risk involved.

    But saying “random hit or miss” is misleading. First of all referral fees in Agent Evaluator are the same for all agents, so NO it doesn’t go to the highest bidder. Secondly it is not a hit or miss as the consumer has all the control in the world. Let’s take a look at what AgentEvaluator does. By nature it is a competitive program. A consumer gets to anonymously give out some info on what they are looking for and where. HomeGain Agents send out customized proposal which the consumer can review. There is no obligation to work with any of the agents and it is completely anonymous. As a consumer thats great! Agents don’t get your contact info, they use the HomeGain system to send proposals. On average a consumer gets 7 customized proposals. At that point you would probably choose the one who has prepared the best marketing plan, has the lowest commission, who seems to know the area best, and one has lot of experience. It is a survival of the fittest. The best agents will attract most of the consumers. The agents that don’t know their area or do not have the experience or simply are unable to attract the consumers through their proposals usually opt out of the program because at that point they are just wasting their money. So by nature the program is dominated by the agents who have done well with the consumer. For a new agent to get in, they need to work hard, give extra attention to their proposals & marketing plans, offer lower commissions and slowly build a history of experience. All in all it is a great organic way of building a network of solid agents. Also we conduct surveys with consumers. We found consumers are 77% more likely to have an “excellent” experience with an HomeGain Agent over a non-HomeGain Agent. 88% of consumers would recommend AE to a frend. 92% consumers were impressed by the proposals from agents.

    This does not mean one may have a bad experience with an agent on HomeGain. However it is always in the consumers hands to choose who they want to work with. Also I as a consumer would rather have informative choices to work with as with HomeGain then a “hit and miss” situation. There is also a lot of work being done to really improve our network as well which I can’t mention yet lest I get in trouble. Hope that helps.

    As for the discussions about the value of an agent. If a consumer is informed enough to do things on their own, good for them. However let’s consider legal issues, the inspections, the contracts, negotiations, escrow.. majority of the consumers do want a real estate professional to help them along the way so they don’t fall into unexpected fees and delays.

    Paul
    http://www.homegain.com
    http://www.agentevaluator.com

20. Louis Cammarosano | May 7, 2007 | Reply

    Thanks Mitch and Paul

    Your comments put a lot of this HomeGain/Zillow debate in perspective.
    HomeGain created the original instant homevaluation tool almost a decade ago.

    While its a clever innovation (for the 20th century), listening to some journalists and paid Zillow bloggers they would have us think that Zillow wasn’t just pulling public data and putting pins in maps but changing the way the world thinks about life while curing cancer!

    It means a lot to me that we have satisfied cutsomers like Mitch so we can make a profit and employ fine people like Paul.

    Regards
    Louis

21. Katrina | May 8, 2007 | Reply

    Wow!

    This really has lead to a wonderful discussion on many parts of the market. While I am a fan of Zillow, I will certainly keep up with the HomeGain site once in awhile to see what’s new.

    Thanks everyone for all of these great points and be willing to respectively discuss these issues.

    Who knows, maybe one day I will need a Realtor

22. Louis Cammarosano | May 9, 2007 | Reply

    Thanks Katrina

    In the coming months we will be adding features to our instant homevaluation tool.

    Stay tuned!

23. Louis Cammarosano | May 13, 2007 | Reply

    California Association of Realtors Magazine article:

    What online lead generation companies can and can not do for your business

    http://www.car.org/index.php?id=MzcyOTE

    AND another satisified HomeGain customer

    http://leadgeneration.realtownblogs.com/in-defense-of-homegaincom/

24. Mitchell S Feldman | May 23, 2007 | Reply

    As a real estate broker, it is obvious to me that consumers are always better off having a real estate agent help them, otherwise, why would they be willing to pay us the fees that they do? The answer is because we are worth it! I have been doing business with HomeGain.com since the company’s inception and based on my experiences with them, I am qualified to say that they are a great tool for both agents and homeowners. I have recently set up a profile on Zillow.com, however my user experience with them still in the infancy stage and too new to form any opinions as of yet. I do want to caution consumers that Zillow’s “zestimate” is only a very rough estimate and could be very different than the properties actual market values. Just as with the city assessments, this estimate is based on a mathematical calculation that does not take into consideration the properties condition, exact location differentials, the market as a whole and the psyche of the buyers who formulate their own opinions which can differ dramatically. Only a broker who sells many homes in a given local can truly give a precise estimate of a homes value that would be based on all of the criteria necessary to do so.

25. HomeGain Lawsuit | Jun 16, 2007 | Reply

    I’m a realtor familiar with HomeGain. Recently I discovered that HomeGain is being sued by its own employees. I ask, how can we realtors trust HomeGain when HomeGain tried to deny overtime wages to its very own employees. If HomeGain treats its own employees in such an underhanded manner how will they treat realtors like you and me? Please Google HomeGain Lawsuit and you will find:

    A class action lawsuit was filed against HomeGain.
    If you are interested please access the court documents by going to:
    http://apps.alameda.courts.ca.gov/fortecgi/fortecgi.exe?ServiceName=DomainWebService&TemplateName=index.html

    Then click on Case Summary and enter the case number: RG05246985. Any comments from HomeGain General Manager Louis Cammarosano or HomeGain Client Relations Manager Janice Ridge?

26. Sunshine Real Estate | Jun 21, 2007 | Reply

    I’ve researched the lawsuit against HomeGain and it appears HomeGain denied overtime wages and meal breaks to its employees for several years. I think Louis Cammarosano’s silence on this matter speaks volumes. If you ask me I think not paying people is VERY unethical.
    Mr. Cammarosano is very outspoken and seems to take every opportunity to criticize Zillow on blogs such as this but when someone points out his company’s shortcomings and legal troubles he says nothing. I don’t know about other agents but I will spend my marketing dollars elsewhere and will make sure my vast network of agents are aware of the lack of ethics at HomeGain.

27. Jason Doyle - GM - HOMES.COM | Aug 31, 2007 | Reply

    What a great debate! I’ve been working in this online real estate vertical since 1998. This topic has come up more than a few times. Do you build your business around the consumer or the broker/agent? I have learned over the years that if you want to build a business that generates revenues and is profitable (i know, sounds crazy ‘eh?), you have to achieve a balance between serving the consumer and advertiser. If you tip the scales too far towards one or the other, you’ll lose every time.

    If you choose to focus more on the interest of the broker/agent, you end up with a lack luster consumer experience. It could be argued that this is what you get on HomeGain. Going in this direction allows you to generate revenues and hopefully profits. However, your ability to sustain this model is strictly dependent on the company’s ability to control and maintain it’s distribution…or in the online world, consumer traffic channels. HomeGain has done a good job keeping a grip on their distribution points and has solidified that grip by joining a large Newspaper conglomerate. That’s still a long term risky bet though with consumers moving away from traditional information outlets in print and online (AOL, Yahoo, etc.). The minute they lose access to those distribution points or those distribution points themselves erode, they will have trouble.

    If you choose to focus too much on the consumer, you’ll struggle to continually grow revenues. Now let me clarify that because I know you’re thinking of all those business that have proven that statement wrong…Google being the main one. The online real estate space is a niche within the internet. One site can only generate so much traffic and by having a consumer centric site, you’re limited on the products you can sell to advertisers. The internet is a market place just like a flea market or a shopping mall. The marketplace makes money by charging the vendors/sellers to display their goods assuming the marketplace is in a good position to attract buyers. Not rocket science.

    Now for the irony of the “consumer centric” sites.

    Zillow lauched their site with property records data that they paid a pretty penny for in order to generate “consumer” traffic…don’t get that confused with “buyer” traffic. This created their marketplace of sorts. Unfortunately, the “consumers” coming to their marketplace were (and still are) largely homeowners curious as to what Zillow thought their house was worth and to see the neat birds eye view of their home. They were not attracting “buyers”. So you take a look at your house but really have no reason to come back or engage with a seller/vendor. Upon realizing this (and as their traffic dropped month after month), the Zillow guys (new to this space) realized they better get some real listings in order to attract buyers in order to be able to charge brokers/agents. So they began allowing “free listings”. Anyone ever question why they are “Free”? I mean after all, there has to be some value to posting your listings on a site that attracts consumers right? Well, they now NEED the broker’s listings to evolve their marketplace and to exist long term. The Irony is that as much as they want to be consumer centric, the brokers and agents now control Zillow’s ability to exist. That’s right…if brokers all decided to boycott them, they’d just be another for sale by owner site with limited data. Their bird’s eye view already lost its luster long term because most sites now have that mapping technology. Cyberhomes.com has trumped them on the AVM side so they are in an interesting predicament right now.

    Trulia is another “consumer centric” site where the brokers and agents now control their ability to exist. Whether brokers know that or not is a whole other question. Instead of going out and buying other data like Zillow did to establish a consumer marketplace, they created a program to crawl the web and rip-off listing data from other sites. Yes we were one of them. Not quite an above board business practice but they now had the attention of the industry. Big gamble, but because of the industry they did it in, it worked. After that, they apologized and played dumb even though they knew exactly what they were doing. They then said, well we’re here now so if you aren’t going to allow us to steal your data why don’t you just give it to us….after all, it’s Free and every little bit of exposure helps right? Brokers all over bought it hook line and sinker. Now they are turning around and playing the brokers off each other buy charging them for enhaced listing services. Gotta hand it to them.

    So again, the sites that will prevail are the ones that create a balanced marketplace. Just think of that nice new shopping mall versus the old run down one. They must have consumer centric products but they must also embrace the vendor/seller/broker. HomeGain is agent/broker centric but will continue to make money and be profitable as long as they control their distribution points. Zillow is a big question mark right now. If brokers and agents embrace them like they’ve embraced Trulia, they’ll be fine. Trulia has achieved a decent balance and is now getting brokers to pay but if their luster wears off and they experience a broker rebellion like Realtor.com did, they’re done.

28. Zillow Rules! | Oct 24, 2007 | Reply

    According to published reports, HomeGain’s revenues are between $30 to $40 million dollars per year (never above $42 million). This explains why they feel so threatened by the attention Zillow is achieving with their revolutionary service–Just look at the countless negative comments Louis Cammarosano, HomeGain’s General Manager has posted all over the internet against Zillow . I am betting Zillow will revolutionize on-line real estate and in the process demolish Mickey Mouse operations like HomeGain, HouseValues, Reply! and others. If operations like HomeGain were not afraid of Zillow they would not spend any time attempting to trash their service.
    Zillow has the managerial acumen to be the best. Go Get Them Rich Barton!

29. TexasAgent34 | Feb 14, 2008 | Reply

    Buying leads from homegain is a total waste of money. The say they send the leads out on average to 7 other agents. This is misleading because that is the average across the entire network. Any agent purchasing leads in anywhere near a metroplitan area is going to get sold leads that are going to hundreds of other agents. This is something homegain does not want you to know. They also do not qualify the leads in any way. Any bogus information that is filled out on the site from the “home evaluation tool” is then sold to agents for cold hard cash! Dont you love it when you get leads from “Screw off in Austin” and “yeah right in Dallas”. Such a scam.

30. Brett Waner | Mar 15, 2008 | Reply

    I just wanted to address the comment “only a realtor can know if a property is on a canal or golf course and therefore is the only one capable of properly valuing a property”. The regional website http://www.maprealty.com uses parcel level mapping which shows the exact location of the property so anyone can see if it is ocean front. The purpose of the site is to work with realtors as it creates leads similar to Zillow, Trulia, etc but it is also to provide the best and most accurate information available to the consumer. The site has all registry of deeds sales and assessing records and allows the user to easily compare similar properties. The parcel geography, assessing, and previously sold homes data is currently limited to Boston but expansion is in the works. Why shouldn’t the consumer have access to what other properties sold for per square foot and what the ratio of assessed value to sale price was? This helps the buyer/seller and honest realtors. I’m sure many realtors have been frustrated at losing a potential client because a competitor inflated the supposed value of a seller’s home. MapRealty rewards the honest realtor by showing the consumer that the inflated value is likely fictional. Obviously features within individual homes make one more valuable then the other but a good realtor can demonstrate this to a well informed consumer.

31. MARK Z. | Apr 23, 2008 | Reply

    Wow it looks like Homegain is moving up in the world very quickly. I know a lot of homebuyers love Homegain. You have to keep up with technology if you want to stay alive in this market.

32. Max The Monkey | Sep 27, 2008 | Reply

    HomeGain was purchased in 2005 by Classified Ventures for $100 million dollars. HomeGain revenues in 2008 are expected to be $24 million or less, a huge drop from 2 years ago when we had revenues of $39 million. Challenges in the economy are taking their toll on our business model. Help!

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