When Mark Wall of DeForest decided to put his house on the market in early March, he listed the home on FSBOMadison.com, which has the highest sales volume among for-sale-by-owner Web sites based in the Madison area. Wall said he wanted to save on real estate agent fees.
Five days after putting the home on the Web site, Wall said he held an open house that attracted six couples. He received a purchase offer the next day.
Such a quick sale may be unusual. Nevertheless, home sellers who use FSBO (For Sale By Owner) Web sites instead of real estate agents can save thousands of dollars in commission fees. But they also have to do all the work necessary to sell their homes, including handling paperwork, attorneys, inspections and other matters.
FSBOMadison.com has the most Web traffic, listings and sales. MadCityHomes.com is a hybrid company that also lists homes with the South Central Wisconsin Multiple Listings Service (MLS), a central database used by real estate agents. WhosHome.com is exclusively a FSBO site and is the youngest of the three companies.
The total number of FSBO sales is difficult to track, but industry estimates say they account for about 15 percent to 20 percent of the national real estate market.
FSBO Madison's home sales listings have risen steadily since the company began seven years ago and its Web site generates more hits than the primary Web site of the local MLS (www.wisconsin
homes.com), according to David Zwiefelhofer of FSBO Madison.
Saving on commissions
The main factors in choosing between FSBO and real estate agents are how much work sellers want to do themselves and how much commission they want to save.
"We're strictly for people who want to be in charge of it," said Christie Miller, a co-founder of FSBO Madison. "It is work to sell your home and some people are too busy to do showings or uncomfortable."
But she added, "We've had an incredible number of people who use Realtors and then come to us."
FSBO isn't a new idea. More than 20 years ago, a spokesman for the National Association of Realtors described owners trying to sell their own homes as beginners "skiing straight downhill. It's strenuous and hair-raising."
Since then, real estate agents generally have made peace with the FSBO movement, said Rick Staff, attorney for the Wisconsin Realtors Association. He said FSBO Web sites help widen the overall home-selling market.
Staff said real estate agents at first were wary of FSBO Web sites, but he said he views them as providing a marketplace for people who don't want to use an agent. Without a real estate agent's assistance, Staff said, people who sell their own homes need to hire real estate attorneys to draft the documents.
"What very often happens is the seller needs professional assistance to close the deal," he said.
Hiring a real estate attorney usually costs hundreds of dollars instead of the thousands of dollars sellers pay in real estate commissions.
Real estate agents may have made peace with FSBO companies, but that apparently doesn't stop some agents from trying to undermine them.
Although they liked their house in the Midvale Heights neighborhood, Becky Mitchell and her husband, Jim Thoreson, decided to sell their home last fall using FSBO Madison after researching the market for about six months. Mitchell and Thoreson wanted to take advantage of the opportunity to build a home in Cross Plains. Their Madison home was sold in about 10 weeks.
"We had a half-dozen Realtors stop by and use almost scare tactics that I wasn't anticipating," Mitchell said. "One Realtor said we shouldn't do open houses because people were going to come and case our house" for a possible burglary later.
Victor Barger, president of WhosHome.com, said his company sold 84 homes worth $21 million last year.
"The whole idea of for-sale-by-owner is to avoid paying commission," he said. "As soon as you list your home on the MLS (multiple listing service), you're committed to paying some sort of commission."
Still, the MLS, provides an extensive list of homes for sale that can be accessed by all real estate agents in a market area. Stuart Meland, who works for MadCityHomes.com, taps into the MLS list. Meland posts homes with MLS for a flat fee of $399 instead of charging a commission.
Last year, MadCityHomes.com listed 210 homes with sales valued at $34 million, according to Meland's wife, Sheri, co-owner of the business. She said the average home stayed on the market for 62 days. So far this year, the Web site has listed 45 homes.
"The advantage of the MLS is huge," said Sheri Meland. "Most homebuyers in Madison know about FSBOMadison.com, but if you live in California and are relocating here, have no idea about the site."
"The thing that sets these guys (MadCityHomes.com) apart is when you sign on with them, you sign a contract that you will give the (buyer's) Realtor 3 percent," Brown said. "On FSBOMadison.com, there's really no protection for the Realtor."
Starting a Web site
Mary Clare Murphy and her cousin, Christie Miller, started FSBOMadison.com in early 1998.
"We were trying to sell our own house in Middleton," Murphy said. "It was sort of the cusp of the whole Internet tidal wave. We decided that the timing was right and we really wanted to sell the house."
After listing the house on the Internet, she said it was sold in six weeks to a young computer-savvy couple.
Murphy said the FSBO Madison Web site offers an option for sellers to accept buyers from real estate agents if they agree to pay the commission.
She said the Web site listed 7,000 homes during its first six years and has about a 75 percent success rate of selling them.
Deb Polacek said she and her husband, George, put their Sun Prairie duplex up for sale on a Monday at MadCityHomes.com and she said they had an offer by the end of the next day.
"The person we sold to did not have a Realtor, but found the MLS listing," Deb Polacek said. "It was very nice because we had offers from people with Realtors and without Realtors."
Brian Ziegler said he was happy with the services offered last year by WhosHome.com in selling his home on Madison's North Side. He said he had an accepted offer within four weeks of posting it.
Barger of WhosHome.com said saving real estate fees is the biggest incentive for FSBO sellers.
"Our packages start at $95," he said. "With a potential commission of $20,000 vs. $95, I think it definitely makes sense for everybody to try FSBO first."
\ Contact reporter Marv Balousek at email@example.com or 252-6135.