Condo.com leverages lucrative niche to become a market leader
By Nancy Dahlberg, The Miami Herald | |
McClatchy-Tribune Information Services |
Condo.com was started by Internet entrepreneur
Swerdlow was a public finance lawyer at
Then Swerdlow went to work in the family business -- his father is well-known
Remember 2005 when people were camping out for pre-construction condos? Swerdlow and a partner were driving back and forth from
US Condo Exchange, the first iteration of what would later become Condo.com, launched in 2006.
The idea behind the original site was that condos were trading almost like a commodity, thus the name. The online marketplace would make money from developers' advertising, but there was a problem with that business model.
"We got to a point where we couldn't scale the business model," Swerdlow said. "We needed a lot of bodies on the phone to make sales calls. [Developers] would only buy on credit, so we ran up receivables, and we got hit when the market fell out."
But in 2007, Swerdlow began talking to the investors behind
Condo.com was generating a lot of traffic, yet condos at the time accounted for 10 percent of the overall housing stock. That means there were a lot of single-family homes -- so eRealEstate Holdings bought Houses.com. Later the company bought Property.com and Properties.com.
"I never begrudge a person who overpays for a good domain asset," said Swerdlow, who says he paid more than
Soon the business model crystallized into a lead-generation business, in which agents and brokers get notified immediately when someone responds to their listing or information so they can follow up with the potential client. Swerdlow has since grown his network of partnering real estate agents and brokers, leaping from 5,000 to 35,000 in the past year.
"The overriding reason to exist and the consciousness of our company is to help people. If you help people and you connect the buyer and the seller, no one begrudges us for making a small profit," Swerdlow said, adding that 95 percent of buyers begin their searches online.
Revenue streams include subscription-based advertising -- for instance, agents can become the experts of their buildings, communities or ZIP Codes -- as well as broker fees, display ads, listing fees and affiliate revenue on related services from mortgages to moving.
Today, Condo.com overwhelmingly dominates the eRealEstate Holdings business, carrying about 5 million property listings -- for sales, for rents, foreclosures and vacation rentals -- at any one time. The site attracts about 1.2 million unique visits a month, across a broad spectrum of demographics.
The site includes property listings as well as sales history for every building. "We have a whole curation team; we're curating over 150,000 buildings, adding floor plans and images, site maps and videos," Swerdlow said. Because a condo building is very much a community, Condo.com also rolled out a reviews platform about a year ago. "Is the building good for young people, old people, singles, is it quiet, is there nightlife nearby? Those reviews are valuable and we are becoming the Yelp of condos," Swerdlow said. The site has attracted about 4,000 reviews so far.
That's the type of content that makes an investment in an exact-match domain name worthwhile, said
Condo.com does just that for
"It's the No. 1 site in the world for condos," said Brinker, who just closed on a condo rental for a client he met a few years ago through a Condo.com lead. Brinker said he has "tried all the competitors" including
Houses.com and Property.com are smaller businesses. Houses.com, with the lowdown on more than 250,000 housing communities, is dedicated to single-family homes, but it's really all about the deals, Swerdlow said. The deals program, to be rolled out by the end of the year, will offer savings on mortgage and title services, closing costs, insurance and legal, moving fees, furniture and more, he said.
Property.com, with 500,000 commercial property listings, is evolving into a dedicated all-in-one site for commercial property and related services. One of the services will be an investment portal for crowdfunded commercial real estate deals powered by
The latest acquisition was Location.com; the eRealEstate Holdings team is still formalizing a plan for that site. Swerdlow expects all the portals combined to attract 20 million unique visitors this year.
Swerdlow would not release revenues, but said the company has been profitable for three years. It has 15 full-time employees plus dozens of contract and remote developers and content providers, he said. eRealEstate Holdings forms strategic partnerships, including one with Bayview Asset Management in the mortgage industry.
"We play in two big spaces -- real estate and the Internet advertising business, an
Yet, unlike those well-capitalized competitors that are advertising driven, eRealEstate Holdings also participates in the trillion-dollar annual residential broker commission business because it is also a licensed broker in 30 states, Swerdlow said. "Real estate is the top of the food pyramid in terms of size of transaction."
Follow
eRealEstate Holdings
Business: An online marketplace for real estate.
Headquarters:
Founder and CEO:
Domains: Condo.com, Condos.com, Houses.com, Property.com, Properties.com, Location.com.
Traffic projection: 20 million unique visitors in 2014.
Employees: 15 full time, plus dozens of contract workers.
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