A friend of mine forwarded along this article this article on the Madison market:
http://www.nytimes.com/2007/06/08/business/08home.html
Here's why I don't think this is a model for the national market:
- Like politics, all real estate is local and Madison is a very unique community. Here is the key line in the article: "FSBOMadison.com, the subject of a January 2006 article in The New York Times, charges $150 for an ad on the site and a yard sign. Taking advantage of antiestablishment sentiment in Madison, which has a highly educated and liberal population, it quickly grabbed a market share of roughly 20 percent." Sounds a lot like the place I call home, Burlington VT, which I promise you is not like the rest of the country!
- Selling your own home successfully requires two things: free time & financial sophistication. Most people I've met who are financially sophisticated don't have a lot of free time, and vise versa. Furthermore, many of those who are knowledgeable enough to successfully sell their own home can make more money in their day job then spending the time, effort and emotional energy selling their own home.
- Real estate is all about information. While I can certainly make the case that the national patch work of MLSes is far from perfect, FSBO information sharing is even worse. It's all a numbers game: the more visibility a home receives the more likely it will find a buyer that will pay the asking price. The MLS (in conjunction with IDX) provides a lot more exposure for a listing then a FSBO site can ever do.
Thoughts? Comments?
Ted
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