Chapter 13
IN THIS CHAPTER
Knowing what real estate–related websites can and can’t do for you
Making the best and wisest use of technology and the Internet to sell your house
Unlike the investment industry, which has numerous avenues for do-it-yourself investors to bypass securities brokers and their commissions, in the residential real estate industry it isn’t easy for property sellers or buyers to bypass real estate agents and deal directly with one another. Through multiple listing services (MLS), in which local associations of Realtors pool their property listings and restrict access to only member Realtors, real estate agents retain a lock on about 80 percent of all property sales.
However, some say that the Internet threatens to challenge agent dominance of the real estate world. In theory, at least, the Internet provides the public with a medium for direct and unfiltered exchange of real estate information. And, more and more home buyers and house sellers are turning to the Internet.
Real estate on the Internet has changed and continues to change the industry. The multimedia aspects of the World Wide Web are now being better utilized in the selling process. House listings on the web generally include color photos and a video or 3D virtual reality–like tour. More homebuyers are taking advantage of the Internet’s potential for researching and the grassroots exchange of real estate information. This chapter includes our tips on the best ways to use (or not use) your computer in the house-selling process.
Many property sellers would love to sell their houses themselves to avoid paying those commissions (amounting to 5 or 6 percent of the sale price) that real estate agents collect. The Internet offers for-sale-by-owner (FSBO) house sellers a potentially powerful marketing medium. Don’t think, however, that just throwing your house on the web is enough to sell it for top dollar.
The Internet is one of many ways to market a house. And, as we discuss in Chapter 12, online and print ads, For Sale signs, Sunday open houses, brokers’ tours, listing statements, and listings in the local multiple listing service (MLS) are primary marketing vehicles. This section helps you identify what the web can and can’t do for you to help you sell your house.
The web can be a great way to promote your house, but you need to make sure prospective buyers can see it and easily access it. Keep the following in mind to make sure your house listing gets ample hits on the web:
www.123MainStreet.com
). Please keep in mind, as we note in Chapter 7, that your selection of a good agent should be based on many important criteria, such as her experience and knowledge of the local real estate market and not simply her website.PowerSites’ Agency Logic (www.agencylogic.com
): For just $50, you get your own domain name (for example, www.yourstreetaddress.com
) and hosting for one year (for $199, they’ll build it for you). You can post dozens of photos, unlimited property descriptions, and links to useful information, such as neighborhood info, school info, and so on.
Having a dedicated website address can also save you money on print ads that you place for your house in newspapers and magazines. You can run shorter ads and put your web address in the print ad for folks wanting more information. Agency Logic submits your website to all the major search engines.
forsalebyowner.com
): This site proudly proclaims, “Say goodbye to 6% commissions. Reduce or eliminate listing commissions entirely,” and walks you through preparing your online house-for-sale advertisement. You get a one-month free listing and then pay $19.95 per month. Alternatively, you can sign on with one of its agents and agree to pay that agent 1.99 percent (and of course, if the buyer has agent representation, you’ll be on the hook to pay the buyer’s agent something too).www.craigslist.org
, www.trulia.com
, and www.zillow.com
as well your local newspapers’ classified ads and websites.To understand what FSBO ads can and can’t do for you, check out the next section for more info.
If you’re attempting to sell your house yourself, the Internet can be useful as a supplementary marketing tool. You can either create your own website or list your property through one of the online FSBO listing services. Although creating your own site allows you to go crazy and take full advantage of the web’s multimedia capabilities (you can post color photos of your property, include a floor plan, offer a video tour, and so forth), consider using a good FSBO listing service instead. Building your own site takes a great deal of time and money … and (sorry to say) you’ll probably get as much traffic as a small North Dakota town in January.
Most FSBO online sites charge FSBO sellers a modest fee to list houses for sale. Increasingly, sites like Owners.com (www.owners.com
), for example, offer a free FSBO listing. You can list your house for sale along with unlimited photos and property descriptions, a customized yard sign with a toll-free answering service, and a video. Why do these sites offer their services for free? Because they know that many FSBOs won’t sell their houses and will then be in the market for an agent, and that’s where they can make their money.
These types of websites have relatively few listings and — compared to the overall number of houses on the market — aren’t going to attract much traffic. Pat Low’s experience was typical among online FSBO listers we know. She listed her house on a FSBO site and had few online inquiries. “The more serious inquiries came through more traditional channels, such as newspaper ads, lawn signs, and open houses,” she said.
Websites such as www.trulia.com
and www.zillow.com
offer “tools” that purportedly help you value your house online. Simply enter your street address, these sites say, and you’ll be told what your house is worth. Before you spend any money or submit any personal information, understand that these sites can only do so much for you and most of them aren’t worth your time or money.
“Thank you for telling us about yourself and your real estate needs. You may soon get a phone call from a number you don’t recognize, if you fall within our service areas… . Because instant, online valuation can be off by as much as 10 to 20 percent (we’re talking tens of thousands of dollars here), we’ll put you in direct contact with one qualified local real estate professional who will give you the most accurate information you can get.”
This commentary is quite revealing in two respects. First, it demonstrates the true agenda for how these “free” online pseudo-valuation services make money — through referrals to real estate agents. Second, by their own admission, their accuracy isn’t good.
Whether you’re using a real estate agent or trying to sell your house on your own, don’t determine your house’s asking price this way! Such methods won’t work because
We’re not saying that website house valuation tools are totally worthless. Some of these sites enable you to find out what various properties in your area are selling for — information that’s even more valuable if you’ve actually toured those houses. But please don’t use these sites to value your house.
Whether you’re trading up to a more costly property or looking to downsize and you need to figure out whether to sell your house, you need to review your overall personal financial situation, especially your budget. You can rely on technology and the web to help make the decision.
If you need to crunch some numbers to see where you stand in saving for your retirement, check out Vanguard’s website (investor.vanguard.com
), or T. Rowe Price’s online tools at www.troweprice.com
.