Since 1999, HouseValues has carved a name for itself in the online real estate lead generation business. The company already is well known among agents and consumers who’ve used the service or seen its television commercials. And now, with its move to go public Wednesday, the company is set to continue growing.

Bellevue, Wash.-based HouseValues filed papers Wednesday with the Securities Exchange Commission in its first move to go public. According to the SEC documents, the company plans to raise $86.25 million in its initial public offering. HouseValues generated revenues of $25.1 million in 2003 and $20.5 million for the six months ended June 30, 2004.

With the majority of home buyers now starting their real estate research online, there’s no shortage of sales leads in cyberspace. In fact, enter the phrase “real estate” or “homes for sale” into any major search engine and the Web sites that appear in the highest ranked positions are online lead generators.

While all online lead generators are in the business of selling leads, they each have a unique business model and a different process for their broker and agent clients. HouseValues provides online marketing services to real estate agents through two separate operating brands, HouseValues and JustListed.

The first brand, HouseValues, provides home seller leads to realty agents who’ve purchased the territory where the prospect is selling his or her home. Home sellers log onto and enter their ZIP code to receive a free home-price valuation, which includes comparable prices for homes in their neighborhood and information and the name and contact information of the local real estate agent who prepared the valuation.

The JustListed service collects simple house needs and wants online from people who are interested in potentially buying a home. Prospective home buyers log onto and enter basic information about their desired home. That information is then forwarded to the agent who has purchased the territory where the prospect is home shopping. The agent then e-mails the prospect listings data about for-sale homes matching their criteria.

HouseValues and JustListed both 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, although agents can purchase either the seller leads or the buyer leads or both.

JustListed was launched late in 2003. In a May interview, HouseValues CEO Ian Morris said the service already was responsible for a “good chunk” of the company’s growth, with 3,000 total realty agent subscribers and close to 100,000 consumer requests each month.

Morris credits agent success for HouseValues’ success, and said that agents who use the service earn more than twice as much as the average Realtor.

“In the end, that is what fuels our growth,” he said.

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 percent to 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.

HouseValues also offers real estate agents a prospect management system called Market Leader, which helps agents build and maintain relationships with hundreds of prospective home buyers and sellers with minimal effort. In addition, the company offers personalized coaching and training for agent subscribers to help them build a long-term profitable business.


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