Reasons why SOLD is overvalued IMHO1.) Cyclical Market SlowdownWe are coming out of one of the most activereal estate markets ever and an extended period of historically low interest rates. Over 30% of agentscurrently in the business are expected to leaveand many that remain will go from full-time to part-time finding other work (same for mortgageloan officers). A part-time agentis not going to spend the money on marketing likeyou may imagine. Full-time agents will continueto spend on marketing but are going to make sure they get the most for their money. HV has burnedbridges with some of these agents and new competitorsare coming into the market. 2.) Downside Pressure on Real Estate FeesThere is downside pressure on real estate fees.... particularly on the sell side (listings). This reduced compensation is going to cut into money available for marketing AND make agents more resourceful in their methodsof advertising. HV is very expensive and you can getmore bang for your buck elsewhere. Agents will paygood money for referrals or leads that are genuineand that close in a relatively short period of time... but... according to many of thier customers, that is not what they are getting.3.) MLS and Data FeedsHV homepages site appears to use MLS data feedsand info from H&L Magazine. There is a growingmovement by agency owners to take control of the MLS outof the hands of local Realtor boards and put it into thatof agency owners. The MLS is not one system, but a seriesof about 900 seperate units that all operate independently.IDX, VOW and (IDL) products have transformed the way datais shared among agents and the public... but reforms are comingthat are going to greatly restrict data feeds and cut offinformation flow to people and businesses other then thoseparticpating agencies (already happening). Homes & Land datatends to be old, and without up-to-date data... homepages.com is toast. Additionally when brokers learn that H&L is sellinginfo to homepages and others, they will probably force them to stopselling info all together. If HV can somehow maintain their datafeeds their costs will most likely rise.4.) Alienation of CustomersIt is important to note that many agents & brokers aregetting fed-up with 3rd party lead aggregators thatdo no work and sell poor leads. All it will taketo put HV out of business (and all the otherlead aggregators) is for agents to say "no".. werenot going to pay that or buy non-active leads anymore... and take matters into their own hands. The big 3 franchises are already doing this and others have plans. 5.) CompetitorsNew competitors are coming into the market everyday andHV is not the first to offer lead generation services.The uniqueness of thier "get the value of your home" and "just listed" concepts is waining (everyone is doing that now) and they appear to be trying to maintain sales volume with their homepages and loanpage products. They'realso going after other "lead" sale business either directlyor as an affiliate. Add all this up, give HV some benefit of the doubtregarding projected sales figures, and the value of their stock should beabout half what it's trading for.No hype, no hidden agenda. There is value here... but not what the marketmakers want you to think there is.
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