DAVID DRINKWATER
‘Greater competition’
Homeowners who try to sell their homes without the help of a real estate agent now have another source to expose and advertise their properties. A free online Multiple Listing Service, which is accessible to anyone who surfs the Net, was launched earlier this month.
The service, ByOwnerMLS.com, uploads home listings from existing for-sale-by-owner Web sites and provides links to those sites. Homebuyers and sellers can search the site for free.
“We started it because we saw that the for-sale-by-owner business is a very fragmented business. You can’t go to one site to find all of the by-owner properties,” said Dominic Muttillo, who along with his partner Greg Sullivan started the service in Florida.
“We decided to try to put everything together – to put it one central location so the user doesn’t have to surf on the Internet for hours to find a property,” he said.
The site currently features about 15,000 for-sale-by-owner properties (commonly referred to as FSBOs, pronounced “fizz-bows,” in the industry) from across the country – including about 115 from Massachusetts.
Muttillo said he expects the number of listings on the Web site will grow in coming weeks as word spreads about ByOwnerMLS.com.
“That number will jump dramatically,” said Muttillo, who has been a real estate broker in Florida for 25 years. “I don’t think anyone really knows how many [FSBO] properties there are but the number should be well over 100,000.”
ByOwnerMLS.com enables various member FSBO Web sites to upload their single-family home, condominium, land and commercial property listings for free. Web sites – like ForSaleByOwner.com and ISoldMyHouse.com, a Danvers-based site that has been aggressively advertised in Massachusetts in the last two to three years – generally charge property owners a fee to advertise their listings online.
ByOwnerMLS.com does not post listings from individual homeowners.
“Many for-sale-by-owner sites have been talking about this [a multiple listing service for FSBOs] for years, but no one stepped forward to do it,” said Muttillo.
“In order for it to be a success, you can’t list properties with individual owners themselves, because you’re competing with everyone,” he added.
The majority of the service’s revenue will come from advertising, Muttillo said.
The site is similar to Realtor.com – the official Web site of the National Association of Realtors – which features more than 2 million homes throughout the country that are listed by licensed real estate brokers and agents.
“It sounds like they’re modeling successful aggregator information sites like Realtor.com,” said David S. Drinkwater, a Scituate Realtor who is New England regional vice president for NAR. “Anytime that you can find a way to aggregate information for consumers, there is definitely a benefit to the consumer.”
Home listings on Realtor.com, which draws as many as 5.5 million unique visitors each month, are taken from multiple listing services that allow real estate agents and brokers to share information with each other about properties they are trying to sell.
Homeowners generally can’t search and post their properties on multiple listing services unless they are working with an agent or broker.
‘Really Excited’
Many Realtors try to capture the business of owners who try to sell properties without their assistance. ZipRealty, a national full-service residential real estate brokerage, recently launched a program that enables FSBO sellers to submit a description of their property online. The information is then shared by local ZipRealty agents with their registered buyers who are searching for similar properties. If a ZipRealty client buys the home, the seller must pay ZipRealty a 2.5 percent commission upon closing.
Most home sellers still rely on real estate agents and brokers to assist them. Thirteen percent of all home sellers nationwide chose to sell their properties on their own last year, according to information from NAR. In Massachusetts, 11 percent of all home sellers went the FSBO route in 2005, compared to just 5.9 percent a year earlier.
Local Realtors attributed the jump in FSBO activity in Massachusetts to a variety of factors – including the increase in the number of so-called limited-service and entry-only companies that charge a flat or discount fee to provide only a specific set of services.
Drinkwater said some home sellers who rely on such entry-only companies – paying a fee to an agent to have their property posted in the multiple listing service – might consider themselves a FSBO.
Massachusetts Association of Realtors President David Wluka isn’t surprised that the FSBO activity increased in the state, given that a once strong seller’s market has disappeared. Many home sellers are unrealistic and price their homes too high, not heeding the advice of real estate professionals but instead basing their prices on how the residential real estate market performed a year or two earlier, according to local Realtors.
“Consumers are reaching out for answers wherever they can,” Wluka said. “Sometimes they’re unsatisfied with what they hear from Realtors. They think they can do better because they’re looking at what their neighbors got [for their homes] three months ago.”
But real estate experts are expecting the number of FSBOs to drop because many more homes are available for sale and properties are lingering on the market longer, making it tougher for some homes to sell.
“I think that people are going to try to it on their own but I think that the rate of success is probably going to be less than it was,” said Drinkwater, who is president of Grand Gables Realty Group with offices in Scituate, Cohasset, Duxbury and Marshfield. “It’s going to be tougher for for-sale-by-owners because there’s greater competition out there.”
Those kind of predictions aren’t troubling Muttillo.
Muttillo said real estate is cyclical and while one region may be experiencing a downturn, another part of the country could be booming.
“I don’t think the entire nation is affected the same way,” he said.
He added, “We’re really excited about the site. It’s been very well received so far. Our growth over the next six months should be very rapid.”
