Maybe we are entering the age of the Jetsons. Not only can we electronically control our home security systems, appliances and air-conditioning systems, but we can even buy the house itself online. Just a few clicks of the mouse, a few keystrokes to enter the criteria and voila, the house of your dreams at a price you can afford in the neighborhood you want.
That, at least, is Richard Janssen's vision.
The president of RealSelect Inc., which operates from San Diego and Los Angeles the relatively new home-buying Web site, Realtor.com, Janssen pushed past the financial problems generated by a subsidiary of the National Association of Realtors (NAR) to create a viable home-buying tool for consumers and Realtors alike.
In doing so, he broke a long-standing taboo by making the coveted Multiple Listing Service of homes for sale in a given city available to the public as well as real estate agents.
The principle behind Realtor.com (www.realtor.com) is simple. Combine the resources of the NAR, including listings in the Multiple Listing Service (MLS), with cutting-edge graphic, search engine and database technologies and deliver comprehensive descriptions and photos of millions of homes for sale across the country to individuals surfing the Internet. "Our job is to help individuals search and sift through (the offerings) to come up with homes that meet their requirements," said Janssen. "This helps them be far more specific with their Realtor than they were in the past. It saves both the Realtor and the consumer time and improves the quality of the purchase in terms of satisfaction." Janssen, 48, has been working with computers since college. Raised in Los Angeles, he attended UCLA, first taking up studies in physics. In his junior year, however, he decided he didn't like the subject as much as his friends seemed to so he switched over to economics. It was the late '60s and UCLA had just initiated a computer degree. Janssen decided to check that out as well.
"I knew nothing about computers at that point," he recalled. "In the late '60s computers were in big buildings with raised floors. Even electronic calculators were only available in my senior year. But I enjoyed the analytics of computers. I'm fortunate to have a business background mixed with computers. What I do is solve people's problems using technology." With a joint major in economics and math/computer science, Janssen graduated with his bachelor of science degree in 1971 and went to work at the L.A. office of Deloitte & Touche, a CPA firm. He stayed for six years, combining auditing assignments with work on computer software. Then he formed his own company, Delphi Information Systems Inc., which specializes in developing software and automating systems for independent casualty insurance companies.
"I formed Delphi because the CPA firm decided to transfer our function to New York and I decided not to go with it," Janssen explained. "I took advantage of a paradigm shift in the computer industry with the development of mini-computers. Up until the mid-'70s, small companies couldn't have computers; they'd have to rent time from a mainframe. With mini-computers, small- to medium- sized business could take advantage of the technology. When I left in 1993, we were the largest company automating in that field." Janssen took Delphi public in 1987 and when he retired six years later, the company was earning revenues of more than $50 million. It was clearly a success but, for Janssen, no longer any fun.
"We had acquired several of our competitors," he said. "It was no longer the start-up entrepreneurial company that I enjoyed, so I decided to go off and do something different."
So began Janssen & Associates, a strategic consulting firm. It didn't last very long. One of his clients, a high school buddy, asked him to look into an idea he had to automate MLS listings. Janssen did the market research and told his friend that he didn't think it was a good idea. But then he started interviewing Realtors.
"They told me they were frustrated," Janssen recalled. "The consumers were uneducated and misleading them -- from their perspective. They'd say they wanted X and ended up buying Y. The Realtors weren't being rewarded for listening to their customers and the customers were frustrated that Realtors weren't listening to them." By that time, Janssen's client and friend had decided that the venture wasn't something he was interested in. But the idea intrigued Janssen, who saw it converge with yet another paradigm shift -- the ability of computers to process both pictures and text.
Having listened to the Realtors, Janssen concluded that people needed to be able to window-shop for homes without tediously driving around from community to community. At best, he figured, you could only hit three or four houses in a day by car. Being able to check out 10 or 12 in an hour would be a huge improvement for home buyers.
What Janssen came up with was the HomeSelect kiosk. He rolled it out in May 1994 with San Diego as the test market. The concept was to place a computer with a touch-screen in public areas; he chose Longs Drug Stores, military bases and shopping malls. Consumers would be able to look up homes from the MLS, apartment communities and new communities. The offerings were limited but within them you could get detailed information, a black-and-white photo and contact information.
"We were getting about 40,000 consumers a month, which was pretty good," Janssen said. "In some malls, like Fashion Valley and Parkway Plaza, we put in two kiosks because there were times when there were lines. We got good feedback from consumers but the problem with only 42 kiosks was we couldn't get to as many consumers. Also, some people, who would spend between five and 15 minutes looking up homes, felt self-conscious with people waiting behind them. But that's when the Internet came in." In March 1995 he sat down with Walt Baczkowski, executive vice president of the San Diego Association of Realtors, and discussed the Internet and its possibilities. It could be an ideal opportunity for Realtors or a threat if someone unfriendly got into it, he pointed out to Baczkowski. Janssen had already decided against competing with Realtors when he started up the kiosks. After all, the Realtors had the inventory and the experience in servicing the consumer through all the mystery of buying a house. That held no interest to Janssen.
But accessing the MLS remained a challenge. "Realtors always felt that a proprietary MLS was necessary to their success," said Janssen. "We had to convince them that consumers were going to demand access because of the technology. It did take some convincing and we don't give out everything. We don't give the names of owners and other private information, just a subset of information -- the size of rooms, price, things that consumers need to know to be able to buy."
In September 1995, San Diego became the first community to have the full MLS up on the Internet. InfoTouch, the corporate parent of HomeSelect, initially brought up the MLS under an agreement with the Realtor Information Network (RIN), a subsidiary of the NAR. Gradually, they brought up more cities around the country.
But there was a growing problem. RIN's primary focus was developing a Windows-based desktop tool for Realtors. According to Janssen, RIN ran into financial problems.
That jeopardized the Internet part of the business, which, said Janssen, was succeeding. So last summer, InfoTouch underwrote the entire process of bringing additional cities into Realtor.com, even though the company wasn't being paid by RIN.
"We believed in the project and were putting together capital to buy the marketing rights," said Janssen. "InfoTouch had a contract for the technology but not for marketing, promoting and selling the site. With that we'd be far more successful."
Last December, Janssen and his company signed a long-term operating agreement with the NAR to operate the site, which led to the creation of RealSelect, formed simultaneously with the signing.
Stuart Wolff, a vice president for business development at TCI Interactive (the country's largest cable operator), had considered making an investment in the project but had backed away as RIN's problems grew. But he was convinced that the technology had tremendous potential, Janssen said. Together, the two men raised $7 million to carry on operations for Realtor.com and Wolff came on board as chairman and CEO of RealSelect. Those who log on to Realtor.com find categories such as "Find a Home," "Real Estate News," "Home Ownership Tips," "Mortgage Information," and "Why Use a Realtor." Click on "Find a Home" and you begin a journey to the region you're interested in, complete with maps. You then can focus on the type of home and its features, such as square footage, number of bedrooms, fireplaces, size of the yard and whether there is a view. Enter the price range and if there are matches, you'll get a photo of each house, the features and a link to the Realtor representing it. You'll also run into some banner advertising (which is, of course a significant part of RealSelect's income. The rest is from Realtors who pay to add their name and resume to the site. The real estate ads themselves go up for free to keep the number of homes available as high as possible). Currently RealSelect has 50 employees: 12 in San Diego, a few in Los Angeles, where Janssen lives with his wife, Luci, and their three children, and about 20 salespeople scattered around the country.
Realtor.com, which updates the listings weekly, is adding about three new cities a week, said Janssen.
The network also creates customized sites for various online media organizations around the country, including America Online, USA Today Online, NBC-IN and the Union-Tribune's SignOn San Diego Web site.
"This is a way that Realtors and newspapers can work together," said Barbara Costantino, new product development manager at the Union-Tribune, which launched Homebuying Net online and with a monthly print counterpart in November 1995.
"We were looking to offer more services to Realtors and increase our own advertising opportunities. We created a partnership with the local MLS (provider) SANDICOR. Our agreement with them allows Realtors entering a listing into the MLS to also order an ad for that property both in print and on the Internet. When SignOn San Diego viewers pick `Find a Home,' they're actually being linked to properties on Realtor.com but only those that Realtors have asked to appear through ordering their ad." Costantino said that she and the Union-Tribune are interested in working with RealSelect to further the partnership, perhaps by introducing the concept to other Copley newspapers.
The Realtors themselves seem pleased. Paul Guess, with Prudential California Realty in Encinitas, thinks online listings are a boon in terms of marketing even if consumers aren't usually buying the home they see online.
"To be perfectly honest, very seldom, no matter what the medium is, does someone contact you about the ad and that's the home they want," said Guess.
"You get an idea for what they like visually. The Internet is good for that. The thing that's absolutely incredible about it is that since January 1995, when I started my Web page, I get five to six e- mails a day. In just a few years I can imagine it will be the single greatest source for real estate in the world."
Janssen has had some doubters, people who say he inflates the number of homes (one million by late August) he has online. But, said Janssen, the company went through a full audit on behalf of the NAR by Ernst and Young and can verify that the number of listings reported is accurate. Now that he's tasting success with Realtor.com, Janssen has some other plans for the service. "At one time we thought we might get into other kinds of businesses than real estate," he acknowledged, "but we now want to expand our current services. There's a lot of work to be done to create a perfect site. People want a better handle on schools, commute times, financing. You'll start to see more and more tools to help explain how well a neighborhood fits your unique requirements." CARON GOLDEN is a San Diego free-lance writer. is