Bellevue, Wash.-based online real estate company HouseValues has filed papers with the Securities Exchange Commission for an initial public offering.

According to the SEC documents filed today, HouseValues plans to raise $86.25 million in its initial public offering. The company generated revenues of $25.1 million in 2003 and $20.5 million for the six months ended June 30, 2004.

HouseValues provides online marketing services to real estate agents and has been growing steadily since its inception five years ago. The company has been profitable, with positive cash flow since the second quarter of 2001. In May of this year, HouseValues raised $14.5 million in investment funding from William Blair Capital Partners.

In May, HouseValues CEO Ian Morris said HouseValues’ map for success encompasses four key parts: the fact that every home buyer or seller request goes to only one agent; the company’s prospecting management tools that help agents automatically cultivate relationships with consumers; the coaching and training provided to agent subscribers; and the flat subscription fee model that enables agents to keep what they earn on every deal.

“That’s our secret sauce,” he said.

The filing with the SEC identified its competitors as HomeGain,, Homestore, ServiceMagic and IAC/InterActiveCorp and its LendingTree business, which includes and

“In addition, consolidation driven by online service providers involved in the real estate industry and Internet media companies could create more potent competitors,” reads the filing. “For instance, IAC/InterActiveCorp recently announced an agreement to acquire ServiceMagic, an online home services marketplace. Increased consolidation among online service providers in the residential real estate industry could result in additional competitors that have significantly greater resources or greater brand recognition than we do, and that are able to provide a broader and more attractive suite of products to real estate agents than we can.”

The company has two separate operating brands. The first, HouseValues, provides home seller leads to realty agents who purchase the territory where the prospect is selling their home. The company in January launched a second, separate service for buyer leads,

Prospective home buyers and sellers who sign up for the services receive free home price valuations or for-sale listings information from participating real estate agents. Their contact information is forwarded to the agent who purchased the region where they are either selling their home or plan to buy.

Last year HouseValues purchased SOAR Software Solutions, a technology company that specializes in auto prospecting e-mail products and virtual office Web site applications. SOAR is available in about 65-70 percent of the country. The company has vendor agreements with MLSs to facilitate agents’ use of SOAR software with the MLS data.

The JustListed service includes a free subscription to a SOAR Solutions product that sends automated e-mail messages with listings data from the agent to the buyer prospect. The SOAR component is included only in areas where the local MLS is equipped to facilitate the agent’s use of the SOAR technology. Agents in other regions can still use JustListed, but they have to use another automated system or a manual search-and-compile system to retrieve and send the listings information to the buyer prospects.

Morris joined HouseValues as EVP of marketing and business development, was soon named COO and was promoted to CEO after his first year with the company. The Harvard Business School graduate is a longtime pioneer in the online real estate space. He joined HouseValues two years ago after seven years with Microsoft, where he most recently was general manager of the company’s real estate business.

HouseValues and JustListed are sold on a territory basis. Price points start north of $100 and average several hundred dollars per ZIP code or neighborhood per month. The prices vary depending on how many leads the territory is likely to generate and the company guarantees a minimum number of leads to the purchaser. All the leads are exclusive.

The company’s services for agents also include a complete Market Leader leads management system, training and coaching.


Send tips or a Letter to the Editor to or call (510) 658-9252, ext. 133.

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