Making itself at home in a few new neighborhoods, RealEstate.com is in the process of rolling out its online brokerage services in four metropolitan areas.
The IAC/InterActiveCorp (NASDAQ:IACI) subsidiary with the perfect generic domain has recently started offering brokerage services for homesellers in Portland and Denver. According to an interview with The Wall Street Journal over the weekend, RealEstate.com will expand to Seattle and Salt Lake City later this month.
It's a bold move for a company that's looking to expand its already prominent role as a prized referrer. IAC is all over the realty map. Through Lending Tree, the company guides potential loan applicants to paying lenders. Through Service Magic, IAC refers local home service providers to homeowners. Then you have RealEstate.com, a site that has served IAC well in generating leads for realtors (much like Motley Fool Hidden Gems recommendation HouseValues (NASDAQ:SOLD)).
Competing outfits like ZipRealty (NASDAQ:ZIPR) have earned consumers' fancy by discounting commissions, but RealEstate.com isn't looking to follow suit at first. If it's able to generate the same 6% nibble as many of the popular bricks-and-mortar players, it won't leave money on the table.
However, the industry continues to be tested by online sites like Google (NASDAQ:GOOG) Base and Craigslist, which offer free listings, while others like eBay (NASDAQ:EBAY) toss out a pretty wide net to traditional brokers for a relative pittance.
Don't get me wrong. I like IAC's move here. Thanks to new sites like Zillow.com, I've been worrying about the referral model that companies like HouseValues have been working with. This shift in the real estate brokerage industry may also affect key players like Motley Fool Inside Value pick Cendant (NYSE:CD) and Homestore.com (NASDAQ:HOMS).
IAC will probably find itself trimming commission rates sooner than it thinks in order to grow its business in a hurry. That's important, because the real estate model itself seems to be in a state of flux at the moment. RealEstate.com doesn't have the luxury to take it slowly.
In short, RealEstate.com may not be a distressed seller, but it really can't afford to be greedy at this point.
eBay was a Motley Fool Stock Advisor newsletter recommendation in June of 2002. HouseValues was a recent Hidden Gems stock selection.
Longtime Fool contributor Rick Munarriz isn't interested in selling his home, even if he recognizes that the once red-hot South Florida market is cooling off quickly. He does not own shares in any of the stocks mentioned in this story. The Fool has a disclosure policy. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
