Websites and the influx of technology have been changing countless industries over the years, often cutting out middle men that cost consumers extra money. TurboTax and other tax preparation software eliminate the need to pay fees for someone else to prepare your taxes. Businesses like Uber allow consumers to bypass the traditional taxi service and often save fees on cab fares. The Internet has opened up a wealth of information that makes a do-it-yourself attitude not just possible, but thrive in many areas. In similar ways, the number of people looking to eliminate real estate agents’ fees and strike out on their own to put their homes on the market has grown over the past decade or so, with the help of websites that ensure their listing will get the same attention as one marketed by an agent.
The trend of empowered consumers is something Owners.com President Steve Udelson has noticed for years. That’s likely because he’s in the business of giving people a real estate alternative that saves people thousands of dollars in commission fees. Of the homes sold last year through the site, the company estimates that sellers saved an average of $9,500, normally by eliminating a listing agent’s commission. In a conversation with The Cheat Sheet, Udelson said that people who choose to sell their own home have two main options: They can go the “pure” DIY route and list it in newspaper ads and on various websites themselves, or they can sign up for services like what Owners.com offers. One in three homes sold in the United States last year were sold by one of these two methods, Udelson said, which shows that the DIY approach is gaining momentum.
On a website like Owners.com, “For Sale By Owner” transactions are listed on the same websites that realtors use to find listings for prospective buyers. They’re called a Multiple Listing Service, or MLS listing, and your home will appear next to the ones brokered by the fanciest real estate agent in your area, Udelson said. The only way to list your home on your local MLS site is to be a licensed real estate agent, or to go through a company like Owners.com that is a licensed broker.
When looking to sell your home, using a MLS listing is often the best way to ensure your home will sell quickly, Udelson said. “If you’re going to look to save on commissions, it’s very important to list the property on the MLS. That opens up all the exposure out there,” he said. In most cases, about 70% of homes listed in that way from individual sellers are sold within the first 30 to 60 days, tracking with the rate that professional realtors have, he said.
Owners.com differs from sites like Zillow and Trulia, mostly because they’re more than a listing site. You can find the estimated value of your home on those sites – although we’ve reported before that it’s not always 100% accurate. However, Owners.com offers others services rather than just coming up with a place for brokers and sellers to connect. The site offers a range of packages for selling your home, starting with a free 30-day trial listing. The most popular one, which includes a 6-month MLS listing and all typical materials like brochures and signs, costs one flat fee of $395.
Whether you’re looking to sell your home completely on your own or use a website that offers a MLS listing option, one of the most common downfalls of working without a realtor is pricing your home incorrectly, Udelson said. In many cases, that can mean the difference between selling your home within a few months or having it sit on the market for what seems like an eternity. “That’s kind of the kiss of death,” he said. “It’s just a really bad situation for homeowners.”
In some of those cases, a DIY seller who has priced their home too high won’t see any traffic for a few months, panic, and hire a realtor anyway. The only real value of an agent at that point, he said, is to be persistent enough to get the seller to lower their price. Plus, the seller will end up owing the commission they were trying to avoid paying in the first place. “You don’t want to pay for that,” Udelson said. “It’s much easier to do your homework today.” Udelson suggests researching the sale prices of similar homes in your area and doing the legwork to make sure you’re in the right price range. Then you can “claim” the full commission for the work you put in by taking photos, putting up signs, running open houses, and the other tasks that go into the process — by keeping that money in your bank account.
The recession did play a role in boosting the number of people seeking to cut out the middle man and save money anywhere they could, Udelson said. “Those commission dollars are real money,” he explained. But another key reason the For Sale By Owner movement is growing is likely because millennials and Gen Xers are maturing and starting to sell their own real estate, he said. Those age groups are accustomed to online services like tax software and other tools that cut out extra fees and give the seller a little more autonomy in the process, Udelson explained. “They have a much greater appetite for the way of doing business that we offer,” he said.
Owners.com was acquired a few months ago by AltiSource Portfolio Solutions, S.A., a marketplace and transactions provider for the mortgage, real estate, and consumer debt industries. Owners.com is at its strongest when it’s connecting home sellers with interested buyers, Udelson said, and it’s a unique opportunity to now be a part of a company that excels in all of the services that happen from that point until official closing. Udelson also works as the president of Altisource Online Real Estate, part of which includes auction site Hubzu. Altisource already provides all of the services necessary to move an auctioned home on the Hubzu platform to the point where the new owners get the keys, and the previous owners get the check. Using that platform, there’s no need to track down a lawyer for changing the title or anything else — it happens automatically with Altisource’s tools and a few clicks of a mouse.
Aside from the occasional rough patch in certain locations, Udelson said he’s optimistic about the housing market overall. Prices have generally bounced back from the recession, and one of the continuing advantages is that interest rates continue to be low. That could change, but for now Udelson said “it’s a pretty good time” to put your house on the market, barring any “catastrophic” changes.
Follow Nikelle on Twitter @Nikelle_CS