Lawyers and tyrants and bears, oh my!

You may find yourself feeling sorry for real estate specialist Homestore.com (NASDAQ:HOMS). The company would have posted a quarterly profit last night if it had not been for a $7.2 million charge it took after the Delaware Chancery Court ruled that it was liable to pay the legal costs for a former executive charged with falsely inflating the company's revenues.

Ouch! Remember that business law case study of the shoplifter who slipped on a wet floor during his getaway and sued the store -- and won? Amend this to that. Yet Homestore has a history of attracting more lawyers than a "former Vioxx user" tattoo. Back in the second quarter, it also wedged in a $2.2 million charge to cover a pair of lawsuits. Last year? You got it. The company had to take the financial hit to settle class-action lawsuits then as well.

Spending more time in court than an NBA star is never a good thing for a company, yet maybe there's a twisted silver lining here. The reason: Between the company's checkered past and legally liable present there lies a distraction from the fact that the company should really be doing better than it is right now.

Third-quarter revenues inched just 1% higher to $56.1 million. It's not just a one-time fluke, as revenues are up by only 5% so far this year. Real estate prices have been soaring, and, as a result, so have realtor commissions. One would think that the company behind Realtor.com (among other related sites) would be milking the home hunters dry in this robust market.

Yet it's not happening. While one shouldn't expect the company to cash in on the boom as successfully as homebuilders such as Lennar (NYSE:LEN), D.R. Horton (NYSE:DHI) and Pulte (NYSE:PHM) have -- or home loan specialists such as Countrywide (NYSE:CFC) -- this is the time to shine.

Getting beyond the accounting irregularities and shady acquisitions wasn't easy. The company cleaned house with new executives, and perhaps they are still vacuuming the dirt that the old regime was brushing under the rug. But how ironic is it that the company is barely growing the top line? The real estate market is hot, and who knows whether higher rates and asset-allocation trends will end it all tomorrow?

Let's hope the next charge the company takes is a forward one.

Have you checked out Home Center? Looking to move or wondering what you can do to improve the value of your existing homestead? All this and more -- in the Building/Maintaining a Home discussion board. Only on Fool.com.

Longtime Fool contributor Rick Munarriz isn't looking to move from his home, but that never stops him from killing time by checking out some online real estate sites. He does not own any of the stocks mentioned in this story.