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Tom Kelly
Tom Kelly
The Real Estate Adviser

March 20, 1998

HomeShark gobbles up Seattle-based HomeScout firm

  • Real estate search engine was a hot property itself

    • By TOM KELLY
    The Real Estate Advisor

    SAN FRANCISCO -- While representatives from that small software company in Redmond continued to assure real estate officials they had no intention of bypassing the agent in a residential sale, the most significant Northwest connection went virtually unnoticed.

    HomeShark, the Internet's huge real estate and mortgage services company based in this City by the Bay, acquired Seattle's HomeScout, the largest "open" real estate search engine with access to more than 700,000 properties for sale.

    The merger was announced at Real Estate Connect 98, an international workshop featuring 80 of the world's top housing, legal and technology experts including four department heads from Microsoft.

    The HomeShark-HomeScout deal will more than likely spark similar partnerships between companies seeking to provide one-stop-shopping sites for consumers and agents on the net. The alignments will provide more options for potential homebuyers who have traditionally relied on the automobile and telephone to do their home-and-loan comparisons.

    "With the acquisition of HomeScout, HomeShark is one of the first Web-based mortgage brokers to move to the next level," said Mildred Wulff, an analyst in the Digital Commerce Group at New-York based Jupiter Communications. "Maximizing customer convenience, savings and value is critical to the success of doing business on the Web. HomeShark is moving in that direction."

    Just how much home-and-loan business is being done electronically these days? Officials will tell you that only a small percentage of total business is now generated on-line but volumes are building by nearly 20 percent a month.

    "We did approximately $30 million in loans last month on the Internet," said Cameron King of Countrywide Home Loans. "But ask me the same question this time next year and that number will be huge."

    HomeShark (http://www.homeshark.com) is a Internet real estate and mortgage services company offering home listings, property valuation tools, national interest-rate quotes, agent referrals and discounted mortgages.

    "Both HomeShark and HomeScout are dedicated to making the home purchase process as convenient, cost-effective and streamlined as possible," said Ned Hoyt, HomeShark's chief executive officer. "We are very excited by the synergies and opportunities that this merger creates."

    HomeShark was not alone in its bid for HomeScout. In fact, there were five other bidders for HomeScout, a company located in Seattle's Belltown neighborhood. It was spun off from The Cobalt Group to concentrate solely on properties for sale. Although no terms were announced, HomeScout clearly found itself in an extremely attractive sellers' market.

    "The merger is a natural," said Seattle resident Patricia (Pat) Brown, HomeScout director who built the website into the most popular property address in fewer than four years. "Both HomeShark and HomeScout have a commitment to delivering convenience and building strong relationships with partners and customers. I'm excited that this combination will put our listing partners' properties in front of even more home buyers."

    HomeScout (http://www.homescout.com) brings potential buyers property information from more than 300 databases throughout the world. The term "open" search engine means real estate brokerages, multiple-listing services and properties for-sale-by-owner can submit listings at no cost. HomeScout's former parent company, The Cobalt Group, performs similar functions for yachts and automobiles.

    Real Estate Connect '98 was produced by Kevin Hawkins, the former Great Western Bank official who now is vice president of The Newsletter Group, Inc. a Bainbridge-Island based firm that provides Realtors and other housing professionals with consumer-based marketing tools. Hawkins, who also worked for Fannie Mae in the national's capital and then opened Seattle's Fannie Mae Partnership Office, assembled an impressive list of companies and speakers, including Gary Cooke, Microsoft's Industry Programs Manager for the Small Business Team.

    "We are not interested in entering the real estate business," Cooke told the more than 1,000 conference attendees. "We are interested in providing the tools to enhance the process."

    Brown's accumulation of information has become a valuable tool. She will return to her Seattle office for a few short weeks before relocating to HomeShark headquarters here. She will continue to recruit clients to a Website expected to draw nearly 500,000 visitors a month.

    "When we first started, Realtors and agencies were reluctant to give us their information because they felt the material was proprietary," Brown said. "But we actually asked for nothing more than what was already included in their listing. When they better understood that they could use it as a marketing distribution partner, it began to make sense to them.

    "We simply wanted to create one large site with as many listings as possible," Brown said, "including those consumers who wanted to sell for-sale-by owner."

    Pat Brown pulled it off, big time. Just ask the five companies who lost out in the bidding.



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