Galen Ward faced a tough climate when he started seeking capital last fall for his online real estate startup, Estately. Housing prices were slumping and plenty of deep-pocketed competitors had already raised stockpiles of cash.

But the 29-year-old former environmental consultant-- who bootstrapped Estately with less than $20,000 -- convinced some investors that he had an offering that could beat the likes of Redfin, Trulia and Zillow.com.

"It was a little bit harder," admits Ward, commenting on the $450,000 in financing being announced today. "We had to convince (investors) that we could thrive in a down market. And that is something that we are really focused on. Our competition is very much focused toward huge growth, they have huge investments, and they have to ... spend a lot of money hard and fast to grow quickly."

Ward -- who founded the company with Douglas Cole in the summer of 2006 -- said Estately will remain small and lean. It will use the fresh capital to expand geographically, but it won't grow much beyond its five employees. Some of the money also will be used to add new services that cater to homebuyers looking for deals in a depressed market.

Since its launch in December 2006 under the name ShackPrices.com, Estately has focused exclusively on Western Washington. But that will change with the new funds. Ward says the company plans to start "cranking out" new markets on the West Coast in the next few months, possibly dabbling on the East Coast and Midwest later this year.

It has about 48,000 for-sale listings on the site, with a goal of hitting 250,000 by the end of the summer.

A real estate brokerage that makes money by passing leads to agents, it is currently talking with Multiple Listing Services about receiving data feeds in various markets. Ward declined to disclose the next market, though he said an announcement will be coming in a few weeks.

Adjusting to the new economics in real estate is something that Ward is hopeful he can pull off faster than the competition.

"There are a lot of houses that are overpriced and a lot of houses that are not going to sell quickly," he said. "We are trying to give people tools to figure out which homes are a good deal and which homes are negotiable."

For example, the company recently made it easier for homebuyers to receive e-mail alerts on specific properties each time the price drops.

Estately also is pursuing new revenue models, including the possibility of adding advertisements. For now, the company primarily makes money through its Agent Match feature that attempts to connect homebuyers who are looking for very specific home or neighborhood attributes with qualified agents.

A little more than 100 agents in Western Washington are working with Estately, most of which have more than five years of experience. For the leads that Estately generates, agents agree to pay 20 percent of their commission. That means if a buyer's agent received a 3 percent commission on a $500,000 sale, he or she would pay Estately $3,000.

"It is absolutely worth it for the agents because most agents spend 50 percent or more of their time marketing," said Ward.

He declined to disclose traffic (check out more on Compete.com), but he said Estately is doubling unique visitors every three to four months. For the most part, the site has grown through word of mouth, partly due to the mapping features that show nearby schools, parks and transit lines.

Ward also thinks the site has an inherent advantage over Trulia and Zillow, since they do not show every listing. And he thinks it holds up well against Redfin's discount approach, since consumers who participate in Estately's Agent Match program can spell out very specific terms of what they want to pay.

Due in part to the competition, Ward is trying to move fast and look to the future.

"This is such a dynamic industry, that in 10 years anyone's business model right now is going to be a disaster," he said. "So before your business model peaks, you need to start on the next version of it."