Puget Sound area real estate agents and residential brokers have a particular interest in the trial of Stuart Wolff, the former Homestore chief executive now facing insider trading and securities fraud charges in U.S. District Court in Los Angeles.
Wolff served as Homestore’s CEO and chairman from 1997 to January 2002, when he resigned during an internal investigation. He co-founded the company (then known as RealSelect Inc.) that became the parent of Realtor.com, the official Web site of the million-member National Association of Realtors – the largest trade association in the United States.
In 1998, he had the entire residential real estate industry talking about Realtor.com. He was the brains behind the operation, and he knew it. One of his biggest frustrations was that the Northwest Multiple Listing Service was not buying into his deal of placing its property listings on his online system.
The Northwest Multiple Listing Service, owned by its member brokers, covers 18 counties, mostly in Western Washington, plus Grant, Kittitas and Okanogan counties in the central part of the state. It encompasses more than 2,000 companies with approximately 26,000 brokers and agents. Unlike many listing associations around the country, it is not owned by the local board of Realtors, and operates with a more independent mind-set.
Wolff was bubbling when he told reporters gathered for the National Association of Realtors 1998 convention in Anaheim, Calif., how consumers had viewed 1 billion homes on his site in less than two years.
“We have more than 450 multiple listing services nationwide placing listings on the Realtor.com system,” Wolff said. “We have 95 percent of all existing homes listed for sale in the country – that is approximately 1.3 million now.
“I call it a national resource, one that everyone can benefit from.”
Then, a couple of questions seemed to burst Wolff’s bubble.
“What’s it going to take to get all the major multiples to join Realtor.com?” a reporter asked.
“What do you mean?” Wolff asked. “We have more than 450. … Oh, I see, you’re from the Seattle area,” Wolff nervously laughed. “Things are a little skewed in your corner of the world.”
Wolff, who holds a doctorate in electrical engineering from Princeton, did not like things skewed out of his control. Despite his relentless efforts, he had a difficult time convincing the Northwest Multiple Listing Service to accept the official Web flag of the National Association of Realtors. For a time, Northwest Multiple was the only major broker-agent group in the country that did not subscribe to Realtor.com.
The nervous laugh was the indicator that someone just didn’t get it. Northwest Multiple was a great example. Wolff not only resented the fact that Northwest Multiple was not a player, it confounded him. Why would anybody not accept his self-made national resource?
“I don’t know what to do about getting those Seattle-area listings,” Wolff laughed. “I’ve been up there, I’ve sent two other guys up there … . It’s just one of those things.”
In five years at the helm, Wolff worked 12- to 14-hour days (“I think I’m making about 5 cents an hour,” he quipped) and his company had property listings in all 50 states. He often said results could not be better and that great things were ahead for the company.
The goal was to help agents market themselves and their products, while giving consumers content and information in a variety of home and loan categories. A year ago nearly to the day, the U.S. Securities and Exchange Commission and the Department of Justice said they would bring civil and criminal charges against Wolff and his former executive vice president, Peter Tafeen.
Since then, more than 10 former Homestore employees, including Tafeen, have pleaded guilty to a variety of charges. Another important player, John Giesecke, the company’s former chief operating officer and chief financial officer, pleaded guilty in 2002 to securities fraud.
Wolff definitely had his own way of doing things, beginning with his ubiquitous black-and-orange outfits to his never-had-a-bad-idea persona. He was bright enough not to depend solely on advertising revenue, which shot down many online companies. He often said no investment was risk-free, and that if something appeared to be, it was probably worthless.
What is curious is that Wolff’s attorneys now are contending in court that Wolff “was just a smart guy from Oklahoma” who initially did not see himself as a chief executive and definitely was a person who left the number crunching to his accountants.
He didn’t sound or act that way when his stock was on the rise and his personal stake in Homestore shares was worth an estimated $100 million.
Just ask the Northwest Multiple Listing Service. It heard his pitch.
Tom Kelly’s new book “Real Estate for Boomers and Beyond: Exploring the Costs, Choices and Changes for Your Next Move” (Kaplan Publishing) is available in retail stores, on Amazon.com and in local libraries.
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