For years the real estate community has worried that the Internet would turn out to be an electronic paradise for self-sellers, a heaven from which brokers would largely be excluded and their services devalued.
It hasn't happened that way. While more and more people go online to find both houses and realty services -- and although there are lots of nifty tools, forms, and huge volumes of information on the Web -- brokers continue to handle the overwhelming majority of property transactions.
(According to the 1997 edition of NAR's Home Buying and Selling Process, only 15 percent of all owners sold by themselves. This compares with a similar survey done in 1991 which showed that 19 percent of all sales were by owner.)
There have always been self-sellers, there will always be self-sellers, and there will surely be self-sellers online now and in the future. Indeed, the best possible case for self-sellers on the Internet has long been Owners.com, a highly-regarded site and service which has now allied itself with Prudential California Realty to offer everything from FSBO help to full-service brokerage options.
Owners.com was established in May, 1996 with properties valued at more than $500 million. Since then it says it has handled 250,000 homes nationwide worth more than $30 billion. Prudential California Realty originated from a company established in 1887, making it one of the oldest real estate firms around.
At first glance it might seem that an old-line realty company and an online site devoted to furthering self-sellers (or FSBOs, short for "for sale by owner") would have little in common, but such an alliance is both natural and perhaps a suggestion of things to come.
It's too early in the development of the Internet to suggest how it may impact the realty marketplace, but to this point it's fairly clear that the Web has not evolved into a FSBO utopia nor have online tools and data proved to be a match for local brokers. The result is that sites for self-sellers are out there, more will be developed, but they seem destined to represent only a small portion of the marketplace.
Why has self-selling not blossomed online?
- National online sites need a huge volume of property listings so that consumers can make meaningful local comparisons. Owners.com, with 20,000 listings at this time, is a great success in terms of attracting FSBO listings, but such volume is a fraction of the 1.3 million properties which can be viewed on Realtor.com.
- The pure FSBO model -- selling a home without any broker involvement -- is less attractive for owners than in the past, despite Internet growth. Why? Because property transactions have become preposterously complex during the past decade as a result of more and more consumer and environmental issues as well as increased seller liability. At the same time, a wider array of brokerage services has become readily available -- traditional brokerage, menu of services firms, consulting, etc.
Owners.com says that "Prudential California Realty is Owners.com's first nationwide partner, providing agent services locally and nationwide via its national relocation network." You can see two points in this sentence: First, brokers have assets in place which have great value. Second, Owners.com expects to partner with other brokerage firms. Both ideas make sense.
Brokered and FSBO properties now co-exist in newspaper classified sections, so why not with online sites? In essence, consumers are now finding Internet offerings exclusively for self-sellers, classified sites that carry both broker and FSBO properties, and broker-only sites as well.
The irony, of course, is that assorted futurists, seers, consumerists and others have long predicted that brokerage activities would decline with Internet growth and that the value of realty services would be forced down. Instead, what we see is that brokers in the online era have benefited from increased demand and growing market share.
The Common-Sense Mortgage
The latest edition of The Common-Sense Mortgage -- in its second printing since September -- is now available in bookstores online and off. In print for nearly 15 years and widely recognized as the standard consumer guide to real estate financing, it's described by syndicated columnist Robert Bruss as "an encyclopedic, detailed summary of just about everything real-estate investors, agents, lenders and borrowers want and need to know about mortgages."
"On my scale of one to 10," says Bruss, "this superb book rates a 10."
"This continues to be the most, lucid, comprehensive treatment of the subject on the market," says The Real Estate Professional. "If you want solid, reliable information about residential real estate financing, written in a thoughtful, convincing style, this is your source."
For additional information, press here.
Question Of The Week
Q I'm a successful salesperson who offers an array of services and fees to consumers. My broker, acting on the complaint of several competitors, has asked me to narrow the scope of my business activities and eliminate several of the service options I offer. What should I do?
A As a salesperson you work under the authority of a broker. The broker has the right to establish the policies and procedures for the firm. You, as an independent contractor, can accept the broker's rules, move elsewhere, or become licensed as a broker and start your own firm.
However, you don't work for your competitors, and you have no obligation to them which requires you to become less competitive or productive. For others to complain about lawful and ethical activities conducted within the scope of your engagement with your broker raises a series of questions best discussed with legal counsel.
Weekly Resource
Interested in online home appraisals? There's a good discussion regarding such services on the Appraisal Network along with a collection of useful links.
Editor's Note: This article reflects the opinions of Peter G. Miller only and not necessarily the views of this or any other publication, organization or Website owner.
New Combo Site Reflects Online Realities
