Originally published on May 22, 2000 and brought to you today as a time capsule.
Internet real estate company Homestore.com announced Friday that it has entered into an alliance with seven real estate industry players to streamline the process of purchasing a home online.
Homestore.com will team with GMAC Real Estate and GMAC Mortgage, WyldFyre Technologies, Fannie Mae, RE FormsNet, VeriSign, Prudential and RE/MAX to provide a new business-to-business (B2B) platform for ordering services, coordinating the closing process, and exchanging data and documents.
Over the next 12 months, the partners will reportedly invest a total of US$150 to $200 million to establish the system, which will be known as the Realtors Electronic Transaction Platform.
Software will be provided by Wyldfyre, a subsidiary of Homestore.com that manufactures listings management software.
The new venture is not intended to eliminate the need for a broker. In fact, the National Association of Realtors (NAR) has a substantial stake in Homestore.com.
To emphasize its continuing affiliation with NAR, Homestore unveiled the new B2B initiative at NAR’s midyear conference in Washington, D.C.
“We believe the result will be a more efficient, consumer-friendly digital transaction that ensures the realtor remains in the center of the transaction,” said NAR president Dennis Cronk.
Cronk also said he hopes the new platform will “leverage technology and save time for consumers and create tremendous value for realtors’ relationships with their customers.”
Fannie Mae emerges as a particularly significant player in this venture, since it is a mortgage finance agency chartered by the U.S. Congress to help finance mortgage lending and broaden home ownership. Its participation seems to signal the government’s continuing support for online commerce that directly benefits consumers.
The inclusion of VeriSign suggests that Homestore.com is taking a proactive approach to online security. VeriSign enables online authentication and digital signatures, as well as the processing of a number of payment types.
Both Prudential and RE/MAX — firms that intend to play significant roles in the venture in the future — have high visibility in the real estate arena. Prudential has more than 1,500 offices in the United States and Canada, while RE/MAX has 3,500 offices in 34 countries.
The real estate industry, with transactions that generate $90 billion in fees annually, is increasingly moving its operations online. Homestore’s announcement comes on the heels of a similar initiative that was unveiled in March by Microsoft, but Homestore remains the largest online real estate service.
Despite all the fanfare accompanying the launch of its new platform, Homestore is still looking over its shoulder as the U.S. Department of Justice (DOJ) watches its every move.
In April, Homestore reported that the Justice Department’s antitrust division had requested information about the company’s business practices. The NAR also revealed a similar request from the DOJ.
Earlier this month, Homestore reported a first quarter loss of $10 million, or 14 cents per share, compared with a loss of $17.2 million, or 31 cents per share one year earlier.