INTERVIEW: Lenn Harley of Homefinders.com

I interviewed Lenn Harley of Homefinders.com, a buyer’s brokerage in Maryland and Virginia (DC suburbs). Lenn is one of the true pioneers in online real estate brokerage. She figured out the power of internet marketing for real estate services while redfin.com’s Glenn Kelman was marketing data servers and zillow.com’s Lloyd Frink was convincing Bill Gates to get into the travel business.

I bring this up not to discredit Messrs. Kelman and Frink but rather to highlight the gutsy business model Lenn pioneered. If Time Magazine dubbed 2006 as the year of “YOU”, then Lenn Harley has been one of “YOUR” facilitators for the past thirteen years.

Lenn, why don’t we start off with a recap of your career. You mentioned that you built your business on “in-house relocations” at a big brokerage then struck it on your own when you discovered the power of the internet.

I was an analyst with the government specializing in FOIA review. Following that, I operated a title company in conjunction with a local law office. When I started real estate practice, I found that I preferred working with buyers, contrary to the 1980’s mantra of list, list, list.

In 1994, I left the mega-broker to practice buyer’s agency. I generated sufficient business for a comfortable income but I was missing the relocation buyers because I didn’t have a “relo” connection. Then, one day with the TV in the background, I heard an interview with an attorney who had a “website”. It was like an epiphany. I thought, “THAT is the way to appeal to relocating home buyers.”

I started to “study” the Internet in mid-1994. In early 1995, I took a few “Introduction to the Internet” courses and by March of 1995, I was ready. I interviewed web design companies and hired one to design a web site for me. I had my first Internet settlement, a civilian army employee relocating from Germany to Andrews AFB in Maryland by the end of the year.

So, it worked?

Brian, I just “love it when a plan comes together”

Were there fears or trepidations or were you confident in your strategy?

There was never any doubt. I never had any fear or trepidations because I was NOT “trying” anything.

Explain that, Lenn.

I was executing a plan based on solid research and investment. I was completely confident that the strategy, “Internet advertising”, would work, although I will admit now that I didn’t quite understand “how”. I knew that if my understanding about advertising and the broad reach of the web sites was accurate, it WOULD work.

Your site, www.homefinders.com, is very “sticky”. You also confess to be a map-phile. How have your maps helped your business?

The domain, Homefinders.com, is completely fortuitous. When we researched domain names on Internic.com (the predecessor to NetworkSolutions.com) in May 1995, it was on the short list of domain names that I wanted. It was available and I bought it. If I’d known then what I knew later, I’d have purchased some domains for investment, but that was before there was a market for domain names. We were not permitted to “park” domains like you can do today.

The maps are just some of the numerous images I use to add color, interest or humor to my web sites. I also use photos for color or illustration. Google images has about a hundred photos or images indexed. My “Maps and Facts” pages are the 2nd or 3rd most viewed pages on my web sites following “Search Listings”.

Let’s look into the “wayback machine” at the evolution of www.Homefinders.com. Can you think of any specific updates or changes you made to your website that made it more successful to attracting buyers?

YES! ! I added IDX in 1997 or 1998. It meant access to view current listings for home buyers. Prior to that, I simply put up lots and lots of photos of homes. The website was simply an evolution. I made extensive changes when Google came along because it was pure “search” and not directory based.

Homefinders.com, the web site and domain, were actually off the Internet for almost 2 years while I was fighting a lawsuit by a former broker. He claimed that since my real estate license was with him when I went on the Internet that he owned the domain, the web site and all of the business I had gotten from it since the day I left. The lawsuit lasted about 2 years.

During that time, I had other web sites on line that produced sufficient business.
The expense of defending the lawsuit cost me about $75,000 and was time consuming. I won in the end and reactivated Homefinders.com. I concentrate on that URL because of the “magic” of the word for a buyer’s agent.

So, your saying that you are a buyers agent, Lenn?

I LOVE working with buyers. My years with listing brokers demonstrated to me that the industry was literally “stacked” against the interests of home buyers. Buyers had no representation and were pretty much “on their own”. Undisclosed dual agency was rampant in Maryland and Northern Virginia. When statutory agency disclosure was finally required, it opened up an entire new focus on buyer’s needs and rights. Statutory disclosure of agency relationships and property condition reports have turned real estate practice on it’s ear. When a buyer is represented well, they will have a fair contract, receive a home in good condition (or not overpay for a property inferior in condition), will get a fair shake with financing, and enjoy a smooth transaction. In fact, with an experienced buyer’s agent, buying a home can be fun. That is my goal.

I do not consider the Internet a good resource for listing advertising. Sellers look for neighborhood agents. Buyer’s agents can go where the buyers want to buy. The Internet was a resource for me to go OUT of my area and bring relocating buyer to me. That’s why it works so well.

How important is the power of the social networking to vendors? I’ve read some of the funnier posts you’ve made about alien lenders cold-calling you. Can a vendor capture Lady Lenn’s business through interaction on a social network?

No. I would not refer a home buyer to any lender simply because of a friendship or relationship developed on a blog. The way I meet new lenders is really very easy. Buyers contact me for my services as a Buyer’s Agent. More than half of these buyers are already connected with a lending entity, either through their credit union (NFCU or USAA) or they have found an Internet lender. I have met some very good lenders through buyers. I’ve also met some very bad ones.

I just settled on Wednesday with a buyer who had been pre-qualified with an Internet lender. He had been taking advice from an online mortgage transparency “guru”. It was a disaster. They lender gave him a GFE that underestimated title insurance by about $900, then sold him on a title company affiliate that overcharged him transfer and recordation taxes by $2,900. It took me two full days to get him to understand that either they didn’t know what they were doing or were scamming him. He finally realized that was the case and saved about $3,500. They corrected the figures when I told them we’d be making a complaint with the Insurance Commissioner. Funny how those things happen. Still, this buyer still swears by this online mortgage transparency “guru”.

I wouldn’t recommend a lender to a buyer simply because I knew the lender. For me to recommend a lender, they first have to demonstrate their value.

Tell us about your copyright compliance policy.

I’m not sure what you mean by “policy”. I do not violate copyright laws. I develop or write all of my own material.

I should have said your copyright enforcement policy.

If you are referring to real estate agents, brokers or lenders who infringe on my copyrights, my policy is “take no prisoners”. I proceed against ALL persons who steal images from my web sites, ALL.

OK, Lenn…what’s next for you and homefinders.com? I read that you’ve divorced yourself from any employed agents. How do you intend to keep the electric bill paid? Will you just be a one-woman show? Won’t you waste all of those good potential buyers by going it alone?

Goodness ! Where did you get the idea that I am going it alone? No such thing! I’m simply turning over agent management to other brokers or referring directly to agents that were with homefinders.com who now have their own broker’s license. I’ve trained some very good buyer’s agents over the years. Let them grow and run their own business. We work together. I bring the buyers to market and the agents help them find homes and manage the transaction. It works.

My forte is in business development. I want to spend time on bringing buyers to Homefinders.com, qualifying them, analyzing their needs and letting someone else do the sales and agent and brokerage management.

How do you do that with no agents?

I have referral agreements with 8 local brokers who review buyers and buyers’ needs with me almost daily. We have a team approach to making sure that the buyers have the best qualified agent for their needs.

The only thing that has changed is that the agents are under another broker’s license and not mine. Agent supervision and case management was too time consuming. But, to get my buyer referrals, which are superior to those that most brokers or agents self-generate, the brokers are must have the agents in their employ.

But you still sell, right?

As for selling myself, I’ve taken two buyers out this year and sold two homes. Sure, I’ll sell a few homes, but my Internet strategy is a full time job. Not a single buyer is wasted. At the same time, I don’t take just anyone who says that they want to buy a home. I accept or refer only ready, able and serious home buyers. We sell a very high percentage of the buyers who come from my Internet sites and they have to get through me to get to an agent. When I contact a broker with a referral, they know that it’s a good buyer.

My understanding of the Internet and how Google works is the key to getting the buyer traffic. Without that, I wouldn’t have the referral business that I do. Homefinders.com is not just a web site, it is a lead machine.

Lenn Harley is a rainmaker, not a lead aggregator. I’ve looked at “online brokerage” models, relocation models, internet lead sources, and loose affiliations. None of those can compare to getting a pre-qualified buyer referral from a real estate BROKER.

Thanks, Lenn for a great interview. It is a privilege to share your journey, from its original inception to the powerhouse it is today, with our readers here at Bloodhound Blog.