An Internet boost for do-it-yourself home sellers
Spreading the word about a home you’re selling yourself just got cheaper.
Without paying a penny, sellers who go the FSBO (for sale by owner) route can add their houses to a Multiple Listing Service in California and 19 other states via a new online realty broker, www.iggyshouse.com.
The MLS -- the biggest, most encompassing listing database of homes for sale -- has long excluded those who try to sell their homes on their own, with few exceptions. The service remains important for sellers because agents routinely depend on its information, and Multiple Listing Services provide listings for many online sites, including the widely used www.realtor.com, which is owned by the National Assn. of Realtors.
The Realtors group has established guidelines for an MLS associated with its constituency -- member agents and brokers. Most agents are members. Privately governed, an MLS is not required to accept listings from nonmembers.
“It’s not a public utility,” said NAR spokesman Walter Molony. The result is that sellers who want their properties listed must either agree to pay an agent’s commission -- generally 5% to 6% of the sales price -- or patronize a business that provides an MLS listing for a flat fee or as a part of a package.
IggysHouse Realty Inc., can place listings, according to Chief Executive Joseph Fox, because the licensed realty brokerage firm is a member of Multiple Listing Services. He expects his approach to reduce the number of sellers who depend on agents.
“They are catering to owners who would like to sell on their own, but we recognize they need help,” Molony said.
“Our latest consumer survey of buyers and sellers shows that 83% of sellers use full-service brokerages, 9% use limited brokerages, including discount services and 8% use minimal services,” he added.
There are roughly 900 local and regional Multiple Listing Services throughout the U.S., and buyers have long had free Internet access to the information through online sites.
But IggysHouse, which expects to be in all 50 states by year’s end, Fox said, is the first Internet site to allow sellers to list on an MLS at no charge.
At online realty broker www.redfin.com, for example, home sellers pay either $2,000 upfront or $3,000 at closing to list a property in a local MLS in California or Washington state, according to Redfin company spokeswoman Cynthia Pang. That compares, for example, with $30,000 -- a 6% commission on a $500,000 house, split by traditional agents representing a buyer and a seller. For the flat fee charged by Redfin, sellers also receive a lockbox, yard and open-house signs, marketing fliers and additional Internet marketing, as well as full support in paperwork, negotiations and closing, Pang said.
Many sites sell MLS listings for less. At www.e-liststate.com, California sellers pay $249 for a six-month listing. At 4salemls.com, Californians pay $395 for a listing that lasts until the house is sold. At www.ihsrealty.com, they pay varying amounts by county; for a Los Angeles County listing, the amount is $399. At www.housepad.com, which also operates as www.valuemls.com, the charge is based on a community within a county. A house for sale in Eagle Rock, for example, would cost $179 for a listing on an MLS -- only one of the services the site offers.
IggysHouse is providing the service without charging a fee to consumers.
“How is he going to make any money?” NAR spokesman Molony asked.
Fox said IggysHouse is paying the nominal cost for the MLS listings to drive more business to www.buysiderealty.com, his company’s original real estate presence on the Internet. That site rebates 75% of the traditional commission received by an agent representing a buyer if the buyer finds his or her own home and works with the company’s salaried agents. The remaining 25% of that commission goes into the coffers of the company.
“Sellers are buyers,” Fox said, explaining that most homeowners who sell one house purchase another, and he wants those buyers. BuySideRealty’s online business is growing, he added, although he declined to discuss by how much. He did give some local examples. A buyer of a $2- million house in Beverly Hills recently received a $42,000 rebate, Fox said, and another who is in escrow on a $2.3-million house is scheduled to receive $48,000. California’s average rebate is $17,000, he said; nationwide, it is $11,000.
Like other sites that assist FSBOs, IggysHouse also sells “for sale” signs, directional signs and lockboxes. And, although there may be some money to be made in that area, Fox’s top goal is generating more attention to his other Internet business offerings.
Many websites offer services for homeowners intent on selling their own homes, among them www.forsalebyowner.com, which is owned by Tribune Co., parent company of the L.A. Times, and charges $399 for a six-month listing on the MLS and the Realtor site. Whether these sellers list on the Internet or simply buy a “for sale” sign at the local hardware store, their numbers are growing.