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May 26, 2006

Newspapers + FSBOs + fee-for-service = consumer savings

Hot_stuff_3 When Jeff Jarvis of BuzzMachine wrote, "Tribune Company just bought ForSaleByOwner.com. That’s a bigger deal than it may appear in the rearview mirror" wonder if he was aware of these stunning statistics?  In less than a year, the online real estate section of The Boston Globe has seen pageviews rise from seven million to nine million per month, and property searches rise from one million to three million per month

Nearly as impressive, Boston.com's real estate section has over 150 user generated forum topics.  What that tells me is that newspapers, at least the one here in Boston, are trusted middlemen in the real estate industry.  Realtors would love to position themselves as "Someone You Can Trust," the title of one of their new spots in a $23.2 million television advertising campaign to enhance their brand name.

Unlike listing agents, who have a duty to offer a range of fiduciary services to their clients, the Tribune is going into the FSBO business -- not the brokerage business as Jarvis recommended a decade ago.  If smart FSBOs already advertise in their local newspaper, an obvious best practice recommended a year ago, how will that be different from placing an ad in a FSBO website owned by a newspaper?  My guess is that the newspaper owned-FSBO website will bundle a variety of financial incentives to consumers, and sell buyer and seller leads to brokers for a referral fee.  Otherwise how will they recoup their potential lost revenue?  Do the math:  ForSaleByOwner.com listing packages start at less than $90 per month, or $249 until the property sells.  Compare that to the cost of a print ad in The Boston Globe: it's nearly impossible to write a meaningful print ad for less than $150, and arguably it to be effective, it needs to appear weekly.

If there is a financial upside here for the Tribune, it appears to selling leads to the brokerage community, something newspapers traditionally have not done.  That's changing.  In July 2005, Classified Ventures, a joint venture of leading newspapers including the Tribune and Washington Post, acquired HomeGain.com,"the #2 leading website in the real estate industry" with 4.5 million monthly visitors.

But one needs to ask where is the financial upside for home sellers?  If Boston.com already generates three million property searches per month and delivers nine millon page views, do FSBOs really benefit from being sold to a full-service or flat-fee listing agency who will put them in the MLS if it costs them half or full commission?  Or is advertising on sites like Boston.com and purchasing advice "as needed" for an hourly fee from a new generation of fee-for-service real estate consultants a better value?

Bill Wendel | 09:35 AM in Change Agents, Commission Reform, Do-it-yourself, FSBO: Best Practices, FSBO: For Sale By Owner, Savings & Rebates, Unbundling the Commission | Permalink

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In reading this blog I would just like to add that there are other places on the web that you are able to post your property that are also getting major hits. emongoo.com is one of them that I use and have really been seeing some success. Check them out, or atleast check out my property on their site, property #12919.

Posted by: Heather | May 31, 2006 3:28:07 PM

The more eyes that land on a FSBO, or any listing, for that matter, the better - there's definitely some value in getting a house listed in MLS, unless you're lucky enough to live in an area where housing demand outnumbers supply.

Posted by: erin | Jun 1, 2006 4:03:29 PM

In January 2006 when we, emongoo, looked around we couldn't really find a standard marketing website for for sale by owners or fsbo's to market on. (thus why we started www.emongoo.com) Yes there is craigslist, the newspapers, forsalebyowner.com, byowner.com, owners.com, freefsbozone.com, fsbo.com ( the list goes on and on and on ) but there isn't one website that comes to mind for fsbo's to effectively advertise on.

If I need to find an answer on the web I more than likely will go to Yahoo or Goolge. If I am looking for travel I will go to expedia.com or www.travelocity.com, but if I am looking for fsbo real estate there are just too many options.

Now www.topix.net, The Boston Globe and more join the game, but really what good is it? Our clients (emongoo.com), will in some cases, have already placed their home on over 40 websites before they post on emongoo.com. 40 websites! That is nuts! We are seeing more and more people posting on emongoo as their first choice and we know that will only continue as our name gets out there, but the point is, shouldn't there be one or two top real estate (fsbo) websites out there?

I understand business and competition and I understand that emongoo.com doesn't have all the answers, but how does a newspaper or a classified ad website justify for 'the best real estate website'? Now Google and MSN are getting into the online fsbo mess, why? The answer is money. Look at what www.zillow.com did in less then 4 months. Zillow’s traffic is growing and growing fast which proves that people are interested in real estate in the millions. For businesses, millions of people equal millions of hits which translate to dollars. The fact is that the online real estate listing industry produces over 200 million dollars a year in just listing revenue alone and newspaper classifieds for real estate produce over 4.2 billion dollars a year. No advertising is figured into those numbers, so just add a lot more to it!

The money is there, the sites are there, the newspapers are there, but is it all working? If it is then why do over 70 % of all for sale by owners turn to a real estate professional and why do all fsbo’s average over $1300.00 dollars in marketing expenses and market in over 30 different forms of online or offline listing services? To put it bluntly it isn't working. All the fancy mapping websites, all the fancy new flash and all the high tech websites don't sell real estate (even though I think a lot of them have created some very ‘cool’ technology). People sell real estate. Whether it is the owner, the neighbor or the realtor, people sell real estate.

Now after that little speech you may wonder why I am in the online real estate industry, simple; to make a change. To change the way for sale by owners market their properties, to use people and simplistic, but powerful, technology to sell real estate. There needs to be a universal online portal for fsbo’s to market in. The realtors have the MLS, but what do fsbo's have other then 100's of sites to choose from? Maybe emongoo.com won't work, maybe I will be calling www.topix.net or craigslist for a job, only time will tell. There just needs to be a better, more well know option.

There is the business side and before you tear my post apart and say that craigslist and Google are the best 'free' for sale by owner websites out there let me say this; are they real estate? Is that all they do? Would you take your car to a plastic surgeon for body work? Maybe he could do it, but should he?

My mother is now in her late 60's (don’t tell her) and I have been trying to teach her computers for the last 15 years, so far not much luck. She has her Masters in health science, she is a well respected member of the community, owns her own business, but when it comes to web surfing, forget it. What is my point with all of this? Have you ever seen a first time or non-computer geek use some of the real estate websites out there?

I will get off the soap box now; I do however have more to say, but I will save that for an other post. Please don't take this post as 'emongoo is the best and we are the only website you should list with' (we are still growing and we have more and more we would like to do, but our clients are selling properties and that is the key.) Take this post as, ‘more and more people are saying they are a real estate listing website, when will it ever end!?'

Posted by: Wes Morgenegg | Jun 6, 2006 1:59:31 AM

Wes' comments are interesting and fun. As part of FreeFSBOZone.com, we recognize that people who choose to sell their own properties are at a competitive disadvantage and there are lots of websites out there anxious to take FSBO's money with tantalizing "Free" offers that expire or promises to sell "professional" information about product marketing. Many sites create leads for mortgage companies. FSBOs need to ask some basic questions: 1) Will your site ever charge me, and if so, what; 2) What amount of traffic will you drive to my listing; 3) How is the site going to make money - generally these aren't charitable endeavors; and 4) is your focus real estate or am I going to get lost in the shuffle of everything else that you do? It's not a problem that the websites want to earn money. It's just important that the FSBOs understand how it is made and what will be delivered.

Posted by: Eamon Strait | Jun 12, 2006 6:31:51 PM

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