Your points are well thought out and it seems you are an experienced investor. I happen to agree with your prediction as far as HV in this market, company value, unreasonable short position (seeming to have stemmed from Stock Lemon article� do you think the major short position is retail investors?) and acquisition opportunity.
HV business model will continue to develop. I think they see the changing landscape of the industry and might even be a few steps ahead of what most here believe.
Remember cell phones back in the start when they dropped calls every other call, MSFT Windows would crash 5 times a day, Email systems that would not allow attachments, 20 meg hard drives....things evolve and the folks at the company are the key ingredient.
With that said, at this time, as is, I believe HV is worth quite a bit to a few different suitors in this market space...
Sorry, didn't see this post before I posted my last one. It might be a big impact on Housevalues' revenue, if the leads are better they might sell the a smaller amount of agents with a much higher price... you never know. In fact, it may actually be in Housevalues best interest to advertise Zillow on their website. Maintaining leads, payments and all that for less agents while selling their product at a higher price means less operational overhead.
If people truely used HouseValues.com as a way to request a CMA from a Realtor, then yes the leads would be of higher quality but there would be less of them. HV would need to change their business model and sell fewer leads at higher prices. I don't know how you'd handle all the existing contracts you aren't able to honor lead guarantees for though. Do you refund or extend the contract with free months until you deliver the leads (like they do now). Either way, it's a big impact on HVs revenue.
>True, but that means that the leads Housevalues generates will be better qualified (they will be more likely to actually want to sell right away), does it not?
I totally disagree.
What is the main heading when you come into the HV.com site?
"Your Home's Market Value Online". No mention on this page of any Realtor being involved.
It's not until the bottom of the 2nd page hidden under a divider graphic that it mentions that the request is being forwarded.
They are not getting what they advertise: "Your Home's Market Value Online".
The awareness around Zillow will only help to educate people that when they fill out a form on the HV site, it's sold to a Realtor. The only way HV has to combat this, is to increase their advertising.
Free CMAs have been advertised by Realtors for years. HV didn't invent anything. They just do advertising with the promise of an online home valuation. If their radio ads said "Come to our site, fill out the form, and we'll forward your info to a local Realtor to do your CMA" do you really think that as many people would fill out the form?
Zillow and other online services that give INSTANT information will reduce HV.com's lead flow. The only question left in my mind is how much and how quick it will happen.
True, but that means that the leads Housevalues generates will be better qualified (they will be more likely to actually want to sell right away), does it not?
Would this not make Housevalues a better place to get leads for agents?
I don't know whether or not they know (it seems apparent on the site, it says that it will be forwarded to a real estate agent), but I am suggesting that for about six years or so Housevalues has gotten a lot of people to fill out those forms, they've gotten CMAs and that system (of agents doing CMAs to get business) is not going to change anytime soon. Do you disagree?
Please quote where I said I didn't expect them to solicit me for business.
If you go to a car dealership and the salesman brings you a cup of coffee are you unethical if you don't buy a car from that dealership? What if I decide they don't have cars I like? What if I decide I can't afford a car? What if, when I went to the dealership I didn't know if I would even want a car?
I don't think it's unethical to accept something that is offered to you freely. I would have no problem with the salesperson asking me if I want to buy a car and never said that I would.
Your posts do have some good stuff in them to prove why Zillow is a big threat to HV.
If you may not sell for a year or two, you aren't that serious at the moment. You'd probably be happy with Zillow and you'd get a CMA when you were closer to selling.
So you say you are going to do a free CMA on their house because:
1) The person very well may want to sell their property.
(o.k. - that's the main reason people ask for one at which case agent will do them... because they are trying to get a listing)
2) The person may have friends or family who want to sell their property, or who want to buy property.
(nope. Why would an agent do this? More likely in this situation the actual conversation would go something like... I'm not interested in selling my property, but my friends or family might want to sell or buy property: and you as an agent would say: Well, so I should speak with them.
3) The person may want to sell in one, three, nine months or in two years. They very well may call me rather than look in the phone book at that time.
(o.k. again there is an expectation of getting to make a listing presentation. If a consumer said to you... I'm not looking to sell for nine months or two years... you're going to do a formal CMA only if you expect to be able to make a listing presentation in the future.
4) The person may want to buy a rental property.
(so the reason for doing a CMA on this one is why?? to see how much equity they have?? If you did a CMA then there is an expectation that you want to be considered for helping them find rental property.
In each case there is an expectation of potential business in return for service.
So if you think you can get a CMA for free from an agent without an expectation of potential future business... and feel that it's your right to receive one and expect agents not to solicit you for business.. you need an ethics lesson.
Sure, you can find an agent that will work for free thinking there is a 10% chance of getting some business. If you know the agent has ZERO chance, then you are a jerk. There's no law against it but that doesn't make it right.
I've never asked someone to do a CMA with no intention to sell (using them as the agent) ever. I tend to agree, that would be pretty obnoxious (though I wouldn't go so far as to call it "theft" or that they are "pond scum"). Extending my analogy, this would be like a woman accepting a date knowing that she would never, under any circumstances, date the person. Is it obnoxious and lacking in class? Yes. Should she probably just not go out? Yes. Is she obligated legally or morally to date the person after that? No. That's my point. Most of the time I've been pretty upfront and told agents I may not want to sell for a year or two, I have yet to see someone turn me down and there have been instances where I have indeed used them later, or I've given their name out to friends.
Overall my point is that people will continue to do this, and the system is not going to change anytime soon. People will not pay for a service to get a CMA when, in the worst case, they can simply tell a real estate agent they want to sell and get a CMA for free. The doom and gloom scenario that this will fundamentally change is something people have been saying for a long time, but it never happens. That's why I've said it before and I'll say it again, agents doing CMAs will not go away anytime soon.