David S. Drinkwater
Changing role
Advertisements by companies promising to help people sell their homes without a real estate agent are becoming more visible these days, but Bay State Realtors aren’t convinced they’re pulling customers away.
Realtors in various regions of the state report a busy spring season and said they have not seen a jump in so-called FSBOs – homes that are offered “for sale by owner.” Local Realtors argue that the majority of home sellers who try to sell on their own eventually turn to a real estate agent after they fail, despite technological advances and Web sites that make it easier for sellers to market their properties.
“It hasn’t affected us at all on the North Shore,” said Realtor Jay Burnham, referring to the Internet sites that assist sellers.
Burnham, a residential agent with The DeWolfe Cos.’ office in Beverly, estimates that as many as 70 to 80 percent of the sellers who attempt to sell on their own eventually contact a real estate agent for help.
Realtor Maggie Tomkiewicz said she recently had a customer who tried to sell his home through a well-known Web site and was unsuccessful.
Tomkiewicz, owner of M. Macdonald Real Estate in South Dartmouth, said people who are putting their homes up for sale without the help of a real estate agent are doing so because of the strong real estate market – not because technology and Web sites make it easier for them.
“They’re more inclined to try to sell their homes on their own because of the market,” said Tomkiewicz, explaining that buyer demand is still outpacing the supply of homes on the sales market. “Sellers know they can put out an ad and people will bang down their doors. When there’s more inventory they’re more inclined to change their minds and go with a real estate agent.”
The most prominent advertisements that have run recently on the radio, in newspapers and on the Internet are from East West Mortgage Co., which operates a Web site called isoldmyhouse.com.
The company’s Web site features home listings of people who are trying to sell their own homes but does not include the seller’s address and phone number. Instead, interested buyers are directed to call East West Mortgage to get pre-approved for a mortgage before being allowed to contact the seller or see the home.
David S. Drinkwater, president of the Massachusetts Association of Realtors, said while he has seen a lot more advertising by companies like East West Mortgage, he doesn’t believe that Web sites like isoldmyhouse.com or other technological vehicles are having much of an effect on sellers.
In fact, Drinkwater wonders if Web sites like these are just a passing fad.
“I think technology has provided a lot of information to consumers in a way they didn’t have before,” he said. “But information is not the only thing that consumers need to have in order to make the best decision about selling or buying real estate.”
Buyers and seller need consulting and advice to help them interpret the information they do receive while doing their own research on the Internet, he said.
“The role of the Realtor has changed from one of information provider to one of information interpreter and has helped crystallize the need for a Realtor,” he said.
According to the most recent survey about FSBOs released by the National Association of Realtors, the most popular method used to sell a home is a yard sign.
Sixty-nine percent of the survey respondents who sold their homes without a real estate agent said they used a yard sign, and 50 percent said they got help through friends, neighbors or relatives.
Some 23 percent said open houses helped them sell, while only 12 percent said they went online.
The same survey, however, shows that buyers are using the Internet more to search for a home.
Back in 1995, for example, only 2 percent of survey respondents used the Internet. By 1999, 37 percent of buyers surveyed were using the Internet in their home search.
Still, most respondents – a full 80 percent – said they used a real estate agent in their transaction.
Even though local real estate agents contend that business hasn’t been affected by FSBOs, they still keep their eyes on FSBO newspaper ads and yard signs.
Tomkiewicz, who is the secretary-treasurer for MAR, said agents in her office call sellers and ask them if they are interested in speaking with a Realtor. The agents also ask sellers if they are familiar with contracts and the dangers of letting strangers into their homes.
Some real estate practitioners try to explain the pitfalls of not using a Realtor. It helps that national ads done by NAR promote the benefits of using a real estate professional. One of those ads, for example, contrasts a seller struggling to sell his house with a successful seller who used a Realtor.
While advertising a home and drawing interested buyers may seem easy, that’s “just scratching the surface,” said Drinkwater.
Sellers must understand the market, and know how to price their homes and negotiate, he said.
“These are skills that Realtors hone over the years,” he said.
Sellers who advertise on their own and aren’t successful ruin their best chance of getting the highest price for their home, he said, because the most excitement and buyer urgency occurs when a home is first listed.
“If a property has been on the market for two months the sense of urgency is gone,” he said.
Most sellers mistakenly believe they will save money by not using a real estate agent because they won’t have to pay a commission, said Burnham. But what they don’t realize, he said, is that their home usually isn’t priced right, so they end up selling it for less and losing out. It’s the buyers who ultimately save.
“So it’s like the seller pays the commission without getting the services,” he said.
