I'm Going Online First

Posted by: Chris Palmeri on August 14, 2008

logoFSBO.gif
Avoiding Realtor commissions might seem like a good idea now that home prices are falling and many people owe more in mortgages than their homes are worth. Free sites like Craigslist.org certainly help that approach. Forsalebyowner.com was among the first sites to facilitate such sales online. It charges a fee of from $90 to $900 for advertising on its site. That’s a lot less than a 6% commission.
Data from the National Association of Realtors shows that fewer people are finding the homes they buy through agents. Last year 29% of all home buyers found their home on the Internet first versus 34% through their agent. Ten years ago those numbers were dramatically different. Half found their homes through an agent and only 2% through the Internet.
Those are the home buyers though. I’m sure the agents don’t mind that home buyers are doing some of their work for them. I’d like to see data on how many people try to sell their homes on their own first and then call an agent.

Reader Comments

Tommi Crow

August 14, 2008 2:32 PM

Infotube.net accepts Free home for sale listings and low flat fee MLS listings in an effort to help seller's in market their home on the web or from the street.

Infotube.net, a database of homes for sale by owner and builder, is a subsidary of Crow Erickson, Inc, the manufacturer of The InfoTube and InfoBox outdoor brochure holders sold at Lowes's, Home Depot and major retailers since 1989.

Julia Foster

August 15, 2008 7:04 AM

There's an alternative to Forsalebyowner.com - Fizber.com offers to list for-sale properties on a multiple listing service for a $349.95 flat fee, to submit property ads to a variety of property search engines for a $299.95 flat fee, and a package of both services for $499.95.

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August 15, 2008 11:43 AM

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George

August 16, 2008 12:56 AM

My neighbor sold a $600,000 home through a realator and the Internet. The realator listed the sale and the buyer, a US Government Employee overseas, using only the Internet, purchased this home in the Virginia suburbs of Washington, DC. One caveat - the buyer knew the area (but not the home) from having lived there a few years ago.

Having sold an auto the same way to a USG employee overseas, I would recommend that home sellers be sure that their home is being made available for sale on the Internet, thus widening your area of possible buyers.

dwight and dottie boss

August 18, 2008 7:51 PM

need to sell my home at 1570 arabian ave rifle colo.

David

September 4, 2008 8:42 PM

The commissions demanded by Realtors will quickly evaporate - they no longer have a monopoly on market data and most don't seem to have much common sense, either. Adapt or perish.

You can get pretty good ideas of what is happening locally from sites like Zillow, while you can also hire a professional appraiser for around $300 if you don't know what your house is worth. The closing attorney will cost you $500 to $1000 for a normal closing and is doing 10 times the work the agent will do. And, working directly with the attorney keeps you from the trouble of having a disinterested agent misrepresent the property to hook a buyer.

In this world, it is pretty hard to save yourself $20,000 for a few hours work and a little effort. Think about how many hours you will spend on the next Girlscout cookie drive - to produce a few 10's of dollars of revenue. For that sort of work, you could be putting a 5-digit check in your bank account (or the Girlscout's...)

We have reached the tipping point - either Realtors get their act together, offer some innovative services at a better price, or they should start asking directions for the unemployment office.

I have bought/sold 3 homes. The last one was FSBO and was by far the most pleasant of all the transactions.

Salty

June 7, 2009 9:23 PM

From a Buyer's perspective, I don't know what a Realtor brings to the table other than the key to a listed house (and often that is not even necessary). Usually, a person can walk through a perspective house without a Realtor.

In Florida, you can get all the relevant information online. The amount paid, the amount borrowed, Seller's financial trouble (if any), similar properties, MLS Listing websites, etc...

Real-Estate contracts in Florida are standard templates. Fill in the blanks...

Why on earth should an independent Buyer's Realtor get 3% of the sale price when they are not even needed?

If a Buyer looks after his own affairs, why doesn't the Buyer get the amount that would have otherwise have gone to the Buyer's Realtor, had there been one? Here I refer to the situation where Buyer does not use a Realtor for any reason (viewing the house, preparing the offer, or anything else)?

Realtors- you should chime in. I really want answers to these questions.

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About

BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.

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