When buyers are looking to purchase new homes, they often employ Realtors to help them search, and/or they use a number of techniques, such as driving through favorite neighborhoods, attending open houses, and shopping on the Internet. In a tight market, buyers will use every means at their disposal to find the homes of their dreams, including avenues not normally pursued by their agents And that includes looking at FSBOs.

For agents looking to sell (and possibly list) real estate, a better understanding of what search means are available to buyers could be an important tool in doing business. You need to know what consumers are doing and what kind of success they are having, so you can be better prepared to sharpen your services to compete.

Although FSBOs don't pose a major threat to the industry, they do indicate that there is a significant segment of the population that clearly doesn't understand the services a Realtor can provide. And the number of FSBOs is growing on the Web every day.

Gaining popularity in buyer search methods is, of course, shopping for homes on the Internet, where buyers can view homes at their leisure and then call their agents for assistance once they have narrowed their selections. Thanks to home searches such as Realtor.com and CyberHomes, as well as directories such as Realty Locator, buyers can get a good idea of homes available in the areas where they want to live. Some of these sites, such as HomeScout, include a broader database with For Sale by Owner (FSBO) homes in addition to MLS standard fare.

Then there are FSBO specialty sites, which do not have MLS-listed homes in their databases. Instead, these home-search sites rely on information from home sellers who pay an advertising fee to be listed on the site. A brief investigation shows that there are a number of differences in service and quality between many of the FSBO-search sites and those that are MLS- or multiservice based.

When buyers search for homes on an MLS-based site, they enjoy a number of features, including photos of homes; a clear description of each home's selling features; a map pinpointing the exact location of each home; the selling price; and agent contact information. The only thing missing is the exact address of each home, so that they may be looked up on a Mapsco and driven by in person. Instead, a mapping feature stars the general area in which the home is located, so further information -- such as schools or employer proximity -- may be ascertained before buyers contacts their agents.

By comparison, a quick browsing through several FSBO-oriented sites, including Owners.com, A House For Sale, and Buy Owner produced mixed results.

Among the findings:

1. Some photos took too long to download. Although it was more enlightening and enjoyable to see two or three views of the same home -- a feature not available on MLS online listings -- many photos took too long to view. Web home-seekers want to scan quickly, as they may scan hundreds of homes in a city at one sitting. Photos are helpful, but they need to be faster.

2. Listings are far too sparse. On A House For Sale, we typed in "Dallas," and incredibly, there were no listings at all! We plowed on and found only one home listed for the state of North Carolina and one for California. Owners.com only offered two in the median price range, $145,000 to $155,000. These are three of the hottest relocation destination markets in the country, so there is either something wrong with home sellers in those states or something wrong with the site's pricing and/or advertising model. Individual Realtors, brokers, and industry organizations advertise constantly to raise consumer awareness of marketing strategies -- how are the FSBO sites competing? Do they contact FSBOs and ask them to list, or are they just waiting by the modem?

3. Content is not competitive. The large MLS-based sites have maps and school information which make the home search more well-rounded. By comparison, and with the exception of Buy Owner, several FSBO sites had an unappealing start-up, shoestring-budget feel. If a home-search site is going to run with the big dogs, it needs to provide competitive services.

4. Navigability is lacking. Having a bunch of homes with addresses from all over a metropolitan area is meaningless to buyers without being able to narrow their searches to homes near employers, schools, family members, etc.

5. For Sale by Owner presentations are not zippy enough. Buy Owner features an organized MLS-type search with a quick-loading single photograph by On Line Realty, a division of Texas Ad Group, Inc. This site most closely approaches the comprehensive information which can be found on Realtor.com, et al. Aside from that, the information on most FSBO sites was pretty much "fill-in-the-blank," with little merchandising to be found. (See HomeScout presentations on how to do it more effectively. Agent News especially liked the way homes were listed with the search means credited to the side, so you know if you are looking at a MLS home, a Buy Owner home, or another network.)

The bottom line is you do get what you pay for. But some home sellers may still need convincing.

Published: April 27, 1998

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