Sunday, August 20, 2006

Trend: Capturing FSBO RE sales commissions

Some estimates put the For-Sale-By-Owner (FSBO) crowd at about 15% of the market. Using NAR estimates of 6.6 million pre-existing units sold in 2006 for an average price of $231,000, yeilds a billion-dollar business. Consequently, a number of enterprising firms are out to aid FSBO sellers in an attempt to re-capture part of that revenue.

Earlier this month, ZipRealty announced a deal to list FSBO properties for a 2.5% commission. The company has a network of agents around the country, all of whom would have access to the FSBO listings.

But another firm may give access to FSBO listings to a much larger audience. Boca Raton, Fla.-based ByOwnerMLS.com announced that it would serve as a multiple listing service for these home sellers and give free online access to anyone searching for a property.

“We believe that the for-sale-by-owner industry is one of the most minimally exposed and fragmented components of the real estate market,” said Dominic Muttillo, chief operating officer for ByOwnerMLS.com. “A unified Multiple Listing Service is an important move towards giving consumers the same kind of access and resource that, until now, only Realtors could afford. ByOwnerMLS.com offers listing companies in this space an ability to have their sellers’ properties advertised in multiple locations on the web, giving each listing double exposure.”

However, this is not the same as the traditional real estate broker MLS systems. According to a press release issued by the company, ByOwnerMLS does not list individual properties itself but gives exposure to all its member sites. Still, ByOwnerMLS expects to bring together virtually every "for sale by owner" listing by acting as a real estate search engine.

This is putting pressure on real estate agents to market their services to homesellers more effectively. Greg Tracy, in his real estate blog, offers some good information on adding value.
Increasing value proposition is not about good service or being an agent who knows what you’re doing. It’s not about being one of the best in your field at negotiating or about how amazing your CMA looks. These things don’t matter because they are all expected. Read on: