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Internet

Net house hunters get foot in door

Real estate agents have had a hammerlock on multiple house listings, but new Web services are allowing people to hunt for themselves.

    In the ongoing search for moneymaking opportunities on the Net, Stuart Wolff, chief executive of Realtor.com, is convinced he's found a pot of gold.

    While local content sites such as Microsoft's Sidewalk and newspapers such as the Los Angeles Times are busy mounting sites with real estate ads, Realtor.com is striking partnerships with online heavyweights such as USA Today and PointCast, Wolff said. (See related story)

    Whether Realtor.com or some other site ultimately will prevail is impossible to say. But David Locke, an analyst with Volpe, Welty, thinks Realtor.com has the right idea. "I think [online real estate] has the potential to be a hot market," he said, as promising as online stock trading.

    At Volpe, Welty, sites that sell real estate or single products, such as books, are called "infomediaries" (although Locke said they did not actually coin the word). "These new infomediaries are going to be among the primary profit opportunities on the Internet," he said. "I think there's going to be one in every vertical market."

    Traditionally, real estate agents have had a hammerlock on house-hunting information such as multiple listings. But with the advent of sites such as Realtor.com, which is a partner of the largest real estate association in the country, the National Association of Realtors, clients will be able to do the searching themselves.

    While home buyers will still have to go through an actual real estate agent, Realtor.com makes money by helping clients hook up with Realtors. As a partner of the National Association of Realtors, Realtor.com has total access to the multiple listings, Wolff said.

    While localized content sites often find themselves putting information in databases that can be accessed by users, Realtor.com doesn't have to do that much extra work.

    "I don't think anybody in any other category can say they have 80 percent of the [available] product," Wolff added. "The reason we can do this is multiple listing services are all computerized. I think we are now sitting on the largest vertical market database of anyone on the Internet."

    While many companies have been jumping onto the Internet commerce bandwagon by selling products such as software and books, the idea behind real estate ads is a bit different.

    Wolff said Realtor.com doesn't actually expect people to complete transactions online. Users may be willing to buy plane tickets or books over the Internet, but not houses or condos.

    Nevertheless, Realtor.com can make money from real estate agents willing to pay for advertising or prominent listings--in other words, those willing to pay for online real estate.

    Realtor.com sells home pages, ads, and email addresses to Realtors. It plans to launch a service in October that would allow the surfer to check out neighborhoods online.

    The upshot, Locke pointed out, could be that with easy access to listings, people might not be willing to pay high premiums to Realtors for the sale, just as people are not as willing to pay as much to stock brokers now that they can get investment information off the Web.

    Like other online services, Realtor.com's strategy has been to form partnerships with other sites that want its listings without having to invest in the time and energy to produce them.

    Partners include America Online's Digital City, Classifieds2000, and some newspapers.

    Digital City launched a new real estate feature yesterday that aggregates data from other sites aimed at house hunters and renters. Its other partners include NewHomeSearch and AllApartments are among the city guide's partners.

    Five years from now, Wolff predicted that finding a house online will be as common as finding one offline. He told a recent story about a couple that had to relocate and was searching for a new house. The two couldn't find anything, but when their 11-year-old son went looking on the Internet, they finally found a house, Wolff said.