The traditional real estate brokerage community has a love/hate relationship with the For Sale By Owner, or “FSBO” home seller. On one hand, FSBO websites are the happy hunting ground for agents seeking new listings. It’s a widely known fact in the real estate business that FSBOs have a horrible sell-through rate. Home owners selling their homes themselves often haven’t a clue how to sell a home. They often overprice their homes and wonder why they don’t sell. Others simply stick a For Sale sign on their front lawn, and walk away. The predicable result is most FBSOs fail, and end up listing with a full commission, traditional broker.
On the other hand, what agents fear about tech-driven FSBOs is that they, like others, will be disintermediated. In other words, digits will replace agents. Anyone seen a travel agent lately?
There are a number of FSBO tech firms listed below working hard to save buyers and sellers money while turning real estate agents into Dodo Birds.
ForSaleByOwner.com was the first successful online FSBO company. Founded by Damon Giglio in the early 2000’s, ForSaleByOwner.com has the largest market share in the FSBO category. They were purchased in 2008 by the Tribune Company who saw their classified real estate print advertising migrating from their newspapers to the web. The solution: buy the guys who are stealing ad revenue.
ForSaleByOwner.com is a virtual money making machine. They don’t get into the middle of the time consuming and expensive details of the transaction. They simply post classified ads online for several hundred dollars a pop. That’s why so many others are trying to make it in the online FSBO space, its money hanging from low lying trees.
Owners.com, founded in San Francisco, is the #2 online FSBO company. It's a tech-enabled real estate brokerage that handles all key aspects of the home buying and selling process. They provide sellers the support of professional agents and flexible listing packages that enable them to list their home on the MLS to be syndicated across other major real estate portals.
They offer savings through right-sized commission structures, digital tools and personalized service from local agents. Most important to their parent company Altisource is the mortgage leads they get through Owners.com, as Altisource is a large writer of home mortgages.
This startup, like other online FSBOs, offers sellers a free home listing on their website. The problem for sellers is traffic to the Fizber site is miniscule. This free offer is just a marketing tactic which gives them the opportunity to upsell to fee-generating products like their flat-fee MLS package which costs $295 and allows sellers to list their property on the local MLS.
However, some may find the he MLS package worth the price, as it also gets the seller postings on Zillow, Realtor.com, Redfin and Trulia.
Years ago, USRealty.com started life as an FSBO called Private Sale Partners. That failed, and new management was brought in which tested various other models such as fee-for-service and 3% commissions. Today, USRealty.com is offering sellers a free posting on the MLS. Their hope is to market other products and services to the seller like lawn signs and consultations which charge healthy fees.
USRealty.com actually makes most of its money through a company they own called HousePad. This online broker is a member of hundreds of MLS’s in over 40 states, a feat few can claim. They charge national online brokers and FSBOs like Owners.com and ForSaleByOwner.com a fee for listing a home on the MLS in a state where these company’s do not have MLS membership. It’s quite a lucrative business because it’s expensive and time consuming to become a member of so many MLS’s across the U.S.
Goldenkey has changed its name and its model a number of times. At one time it was called SoloPro. They were a fee-for-service model which offered sellers a menu of services, each charging a fee.
Today, GoldenKey is taking a page form OpenDoor and Zillow’s Instant Offers where home owners are given an opportunity to sell quickly – in 3 days with OpenDoor – for what is usually a below-market price. However, GoldenKey does not charge the seller a commission or fee, but instead, charges the buyer – or “investor” as they call them – a technology platform fee. Sellers place their home on this “private market” using either a listing agent – which would be crazy – or they can do it themselves.
This U.K.-based tech startup launched their successful model in San Diego two months ago. For a flat fee of $3,200, they will list a seller’s home. Buyers get $1,000 if they buy through Purplebricks. This company is all the rage in the U.K., as it upended the traditional commission model in Britain. Quite simply, their stock is going through the roof. In the summer they raised $60 million to launch in the U.S.
They do have salaried agents, so technically, they don’t quite fit into the “no agent” category, but because they do not charge a commission, they were put onthis list. Purplebricks is definitely a market disrupter. Their hope is to radically alter the U.S. commission-based system. So far, however, things aren’t ramping up at a blazing pace. During their first 6-weeks in business in California, they listed just 12 homes, but let’s give some time.
As their name implies, USFlatFeeListing.com charges sellers an annual fee to be put on the MLS. The charge is $79 a year, or so it says on the landing page. However, once you tap the home page, you are taken to a page titled “our packages” where there are three: $99 a month MLS listing, $195 for six months and $499 for “maximum exposure”.
As you move up the price latter, you are given more benefits including postings on Zillow and Trulia. So, which is it? $79 a year, or $99 a month? It's admittedly difficult to tell.
This Texas-based company was founded by a former real estate agent who thought brokers were charging too much for the services they offered home sellers. Door straddles the FSBO/flat fee category. They are technically an online broker with real estate agents. However, Door is no different than most flat fee, non-agent tech models except that they can give real estate advice and not run afoul of the state regulatory real estate boards, which often forbid non-licensed persons from giving advice about real estate.
Door charges a flat fee of $5,000 to list a home. They claim that is about a $15,000 savings vs. using a broker. However, the seller is on the hook for the 3% buyer agent commission, if there is one, which there usually is.
With a name like FSBO.com, there’s no mystery what their home selling model is. Their slogan is “Do It Yourself…Do It FSBO”. They are a typical FSBO tech model with few bells and whistles.
They have an online store where sellers can buy things like lawn and directional signs. And they have two packages, one for $99.95 and the other, which puts the seller on the MLS, Zillow, Trulia and others, for $399.95.
This FSBO claims they have sold almost 82,000 homes. 4SaleByOwner, one of the biggest names in the FSBO sphere, can lay claim to one of the most established business models amongst a sea of competition.
They too have two packages, one at $299 for an MLS listing, and the “Super Seller” for free (it was, they note, once priced at $399).
These are just 10 of the countless tech driven FSBOs on the market today. Besides the group above, most are small, “mom and pop” operations. What they all have in common is that they are driven by technology.