RealTime IT News

eBay Buys HomesDirect

In a move that significantly bolsters its real estate offerings, eBay Inc. has acquired Pasadena, Calif.-based HomesDirect, a closely held provider of foreclosure-related auction services, for an undisclosed amount.

Real estate has done reasonably well for eBay, and this deal no doubt will be accretive to revenues.

"Through the tail end of 2000 and the first portion of 2001, a piece of real estate (has been selling) on eBay every 60 to 90 minutes," eBay spokesman Kevin Pursglove told InternetNews.com.

eBay launched its real estate category in August 2000 and at the same time established a strategic relationship with zipRealty.com to provide professional real estate services as part of the category.

Last November eBay formed an alliance with Homeseekers.com, which provides eBay users with Homeseeker's technical expertise, software packages and industry relationships.

San Jose, Calif.-based eBay said that HomesDirect will be operated as a subsidiary under its current name and with its current URL, and, eBay will add a new "foreclosures" link within its real estate category, which currently includes residential homes, land, commercial real estate and timeshares for sale.

The deal includes Tower Communications, a HomesDirect subsidiary, which is the company's government foreclosure arm.

HomesDirect operates an online marketplace for sale of foreclosed properties and last year, the company claims, it was responsible "for the sale of about 116,000 homes, all on the Internet and all via auction."

The site currently auctions all of the U.S. Housing & Urban Development foreclosure properties and the majority of Veterans Administration properties, and recently forged relationships with such lending institutions as Chase Manhattan Mortgage Corp., Option One Mortgage Corp. and Bank of America's Equicredit division.

The Tower Communications subsidiary handles all of the HUD foreclosure properties and the majority of VA properties.

"HomesDirect is a natural fit for eBay," said Doug Galen, general manager of eBay Real Estate. "They have demonstrated that online auctions are a viable model for buying and selling real estate, with a unique platform that helps homes sell more quickly and cost-effectively than traditional methods..."