The article Owners’ Web Site Gives Realtors Run for Money [NYT] talks about for sale by owner or FSBO web sites [Google] but specifically FsboMadison.com.
This quirky site has been surprisingly successful, but don’t be misled. Apparently they are not doing it for the money…they get about $150 per listing. Their site sees more web traffic than the local MLS and have earned about $300,000 since the beginning. If they collected a full commission, they would have amassed $17.3M.
Madison is home to the University of Wisconsin and a city where the percentage of residents who graduated from college is twice the national level. It is also a hotbed of antibusiness sentiment, which turns out to be the perfect place for a free- market real estate revolution. Bucking the system is a civic pastime here.
Interactive Map of Sold Homes by FsboMadison.com, created by the Center for Real Estate, University of Wisconsin-Madison.
And Now…Discount Real Estate Brokers
I’d say that discount real estate brokers, like discount stock brokers, are here to stay and serve a niche. I am doubtful that full service brokers have much to worry about because they service a different market altogether. As we enter a more challenging real estate environment, I suspect that order takers, like Foxtons will see their growth cool more sharply than full service companies.
In fact, brokers that will do well in the changing environment will be those that actively market and sell the properties that they represent. There won’t be a lot of room left for order takers. Foxton (formerly YHD) changed their commission structure from 2% to 3%. Perhaps the services demanded from clients could not be provided at 2%.
UPDATE: Another variation on the discount brokerage theme is the flat fee commission with a la carte service. Once such company is (can we come up with a better name?) Help-U-Sell [North County Times].
Webmaster’s note: I remember visiting the Madison campus (from a rival school), to go to college football games, dining on Bucky Badger Dip at Jocko’s Rocketship before kickoff…but I digress.