Owners' Web Gives Realtors Run for Money

NY Times ^ | January 3, 2006 | JEFF BAILEY

[ncountylee]

MADISON, Wis. - Across the country, the National Association of Realtors and the 6 percent commission that most of its members charge to sell a house are under assault by government officials, consumer advocates, lawyers and ambitious entrepreneurs. But the most effective challenge so far emanates from a spare bedroom in the modest home here of Christie Miller.

Ms. Miller, 38, a former social worker who favors fuzzy slippers, and her cousin, Mary Clare Murphy, 51, operate what real estate professionals believe to be the largest for-sale-by-owner Web site in the country.

They have turned Madison, a city of 208,000 known for its liberal politics, into one of the most active for-sale-by-owner markets in the country. And their success suggests that, in challenging the Realtor association's dominance of home sales, they may have hit on a winning formula that has eluded many other upstarts. Their site, FsboMadison.com (pronounced FIZZ-boh) holds a nearly 20 percent share of the Dane County market for residential real estate listings.

The site, which charges just $150 to list a home and throws in a teal blue yard sign, draws more Internet traffic than the traditional multiple listing service controlled by real estate agents.

Madison is home to the University of Wisconsin and a city where the percentage of residents who graduated from college is twice the national level. It is also a hotbed of antibusiness sentiment, which turns out to be the perfect place for a free-market real estate revolution. Bucking the system is a civic pastime here.

[ncountylee]

Anything that hurts MSM (advertising here) is a positive. IMO

[garyhope]

I didn't use a real estate agent to sell my parents home (after they passed). I guess I was lucky it was in the "right" area. There were people leaving notes on my door and in my mailbox begging me to sell it to them.

[Paleo Conservative]

But who'd want to move to Madison, Wisconsin?

[ncountylee]

If the model works it will be copied.

[Herakles]

Not to many people remember that the last time a flat tax was discussed, the group that came out against it, and pretty munch killed it was the Realtors. Everything for them is a write off, so that 6% is pretty much tax free: and that is why they did not want tax reform for the rest of us!

Soon, I hope, people will realize that asking for 6% (or greater) of their nest egg is too much to ask. It's my opinion, from what I've seen here in central Pennsylvania, that the Realtors have so much control that they, not market forces, dictate prices. I am bewildered why the government does not consider this industry a Trust.

[Texas_Jarhead]

"Soon, I hope, people will realize that asking for 6% (or greater) of their nest egg is too much to ask."

I banged out a whole screed about how overpaid Realtors are but tossed it in the circular file. I mean 6% of the value of your most valuable asset for a couple man days (if that) of work. Needless to say I completely agree with your comments.

[sittnick]

The realtors here in Rockford, Illinois like to ask 7%. Worse, the Rockford Area Association of Realtors takes some of that money, and puts up billboards and buys radio time to shill for every school tax increase that gets proposed. Some of the commission also goes to radio spots warning people about the problems of FSBO. (I figure FSBO must work, or they wouldn't advertise against it.)

Nothing against Realtors in general, everything against the local realtor's association.

I am building a home without a realtor, and I will sell my present home without one.

[Graymatter]

Ebay's the way. I got 200 inquiries, people begging to be first in line to send deposit. Sold the house for twice what I paid for it---in one week. Would do it again except I didn't enjoy answering 200 emails in a week. That was rugged.

[alnick]

I have a contract on my non-flooded home in an area hard hit by Katrina. I listed by owner, and I have a waiting list of people who want the house should the contract fall through.

I've even had real estate agents contact me, hoping to work a deal whereby they get some sort of commission.

[CurlyDave]

Alternative listing services would need to reach a combined 50 percent to 60 percent of a market to topple a multiple listing service, Steve Murray, an industry consultant, guessed.

I doubt that.

Here in CA, realtors are advertising 5% comissions, and lower is on the way in many places.

If a FSBO site gets up to 20-30% of the market, there is going to be serious price pressure on the 6% comission.

[Graymatter]

I'm in central PA. See post #9. Ebay fee $100. No realtor. Sold the house sight unseen, never showed it even once.

Realtors in this area seem very strange to me, a native of NY-NJ. Here it's hard to get them to come out on a Sunday. In NY they will leave their dying mother's bedside to show you a property. In NJ they'll offer you an option on her house too.

[alnick]

Realtors have so much control that they, not market forces, dictate prices.

They're trying that down here in Louisiana where non-flooded houses are selling at a premium. They're trying to use guilt to get people to sell at pre-Katrina prices, advising sellers not to be greedy.

The fact is that in my town where large areas were completely devestated, other large sections of the town didn't flood. We all got varying levels of wind damage, but the entire nearby parish of St. Bernard was completely under water, and they're migrating over here. Our population is higher than ever, and the inventory of livable houses is extremely low, which does change the value of the property. It has to.

[crz]

I wouldnt P(*s on the best part of some of those crooks.

I know of but just one that might fit the tee for a human and he is an elderly fellow who wont lie through his teeth to get a sale.

Around here they are selling houses with contaminated wells and not saying one word about it to the potential buyers.

[alnick]

Ebay's the way. I got 200 inquiries, people begging to be first in line to send deposit. Sold the house for twice what I paid for it---in one week. Would do it again except I didn't enjoy answering 200 emails in a week. That was rugged.

I wish I'd have read your post two months ago.

[Tunehead54]

BTTT! ;-)

[Choose Ye This Day]

E-bay? Really? That's amazing. I never would have thought of listing--or looking--there.

Good for you.

[dannyboy72]

I've been developing websites for real estate brokers and agents for nearly a decade and I can tell you that Realtors are still not aware of the coming changes to their industry. While technology has been a boon to the industry and consumers, it is also going to be the bane of the industry - especially with people like Brad Inman (Homegain.com and Inman.com) championing the destruction of the independant agent, and websites like this one offering a viable alternative to straight percentage payoffs.

If you're an agent today, you need to be prepared for the future and begin planning new strategies for your business to employ once the trends begin to move toward FSBO and non-commissioned sales people. Any freepers who might need help with this or have real estate related questions, feel free to Freepmail me or use my company's website for help at www.julysix.com.

[bertmerc1]

I am building a home without a realtor, and I will sell my present home without one.

Just out of curiosity, why would you need a realtor to build one?

[oldironsides]

Law prevents realtors from fixing a fee. The homes listed by real estate companies at a lower fee are shunned by the large real estate companies. They deny it. Unless the buyer sees a sign driving past the home and tells the realtor about it your home listed as a FSBO or with a cut rate fee realtor will never be mentioned. The buyer must realize the extra fees involved using a big time real estate company? They also sock sellers for things a smaller operation would never charge them for at all. They always considered it part of earning the fee. Now they get you for many things that keep them in these large corporate buildings and plush surroundings. They also have a political action fund. They will fight these cut rate fee places off pretty quick.

There are many pitfalls in dealing with a buyer or seller without someone guiding them through the process. There are many sellers that will not place the home with a realtor because they do not want to fill out a disclosure info sheet. We even have some really wonderful offspring and relatives that sell property out from under an aging owner or infirmed owner. Be careful out there. Sometimes a realtor or real estate lawyer is well worth the money. You can easly find a realtor that represents buyers only. That is often a good deal.