“Owners.com has been making encouraging progress in demonstrating that a better consumer real estate model based on technology and service may be viable,” William Shepro, Altisource’s chairman and chief executive officer, said in a statement.
“However, as we continue to work to simplify Altisource and focus on our larger opportunities, we concluded that closing Owners.com is in Altisource’s best interests given the time horizon and level of additional investments needed in order for Owners.com to operate independently,” Shepro added. “I am proud of the very talented and dedicated Owners.com team and want to thank them for their contributions.”
Earlier in the year, Owners.com had multiple job postings for salaried agents, which signaled a shift in business operations. The shift came a year after Michael Lissack, a former contractor, filed a complaint in the state of California that claimed independent contractors were being treated like employees.
Lissack told Inman at the time that he believes the move to hire salaried agents is a direct response to his July 2018 complaint filed with California Labor Commissioner’s Office. He told Inman Tuesday that his complaint, and two others, are set to be heard sometime at the beginning of 2020.
When reached by Inman on Tuesday, Lissack said the problems were threefold.
“They mistreated their agents who were subjected to micromanagement but never properly compensated,” Lissack said. “They incorrectly assumed homes sold themselves and thus the role of the agent as a trusted advisor could be ‘replaced’ by an app and they failed to recognize that this is a relationship business and instead focused on short-term time horizons, transactions and a willingness to make ethically questionable decisions.”
“This was compounded by having senior management from outside the real estate space whose ignorance proved fatal,” Lissack added.
Altisource, a portfolio company that also owns online real estate marketplace Hubzu, sold off its financial services business in July for $44 million and also closed the sale of the majority of its remaining short-term investments in real estate to Lafayette Real Estate for approximately $39 million.
During the first two quarters of the year, Owners.com generated $3.8 million in revenue and reported an $8.1 million loss before income taxes. The company said it will recognize a $5.9 million non-cash goodwill and intangible assets impairment charge in the fourth quarter of 2019, as well as additional wind down and severance costs.