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HouseValues is having problems March 10, 2007

John VanharaJohn Vanhara

Instead of telling homeowners how much their homes are worth, the market is letting HouseValues (Nasdaq: SOLD) know how much it thinks the company is worth.

The answer? Not much. Less than twice the value of the cash on its balance sheet, and it could get worse. Last night’s fourth-quarter report showed a continuing slide in the company’s Realtor lead generating model. Revenue fell by 15% to $21.5 million, as real estate professionals bailed out of the HouseValues.com site, and those who stuck around spent less.

Read the whole story from MSNBC here. My opinion? If HouseValues business model works agents will be paying even more now when the market is very difficult. All agents need more business. If housevalues bring business  to agents then they will be earning more and didn’t have problems. That’s my guess. I don’t their leads generation model is working. Their concept is flawed. They could be making 10x times more than they do if they take referral fees instead of upfront fees.