MARK FOREMAN – ‘More competition’

Homeowners who try to sell their homes without the help of a real estate agent now have another source to expose and advertise their properties. A free online multiple listing service, which is accessible to anyone who surfs the Net, was launched earlier this month.

The service, ByOwnerMLS.com, uploads home listings from existing for-sale-by-owner Web sites and provides links to those sites. Homebuyers and sellers can search the site for free.

“We started it because we saw that the for-sale-by-owner business is a very fragmented business. You can’t go to one site to find all of the by-owner properties,” said Dominic Muttillo, who along with his partner Greg Sullivan started the service in Florida.

“We decided to try to put everything together – to put it one central location so the user doesn’t have to surf on the Internet for hours to find a property,” he said.

The site currently features about 15,000 for-sale-by-owner properties (commonly referred to as FSBOs, pronounced “fizz-bows,” in the industry) from across the country – including about 85 from Connecticut.

Muttillo said he expects the number of listings on the Web site will grow in coming weeks as word spreads about ByOwnerMLS.com.

“That number will jump dramatically,” said Muttillo, who has been a real estate broker in Florida for 25 years. “I don’t think anyone really knows how many [FSBO] properties there are, but the number should be well over 100,000.”

ByOwnerMLS.com enables various member FSBO Web sites to upload their single-family home, condominium, land and commercial property listings for free. Web sites – like ForSaleByOwner.com and ISoldMyHouse.com – generally charge property owners a fee to advertise their listings online.

ByOwnerMLS.com does not post listings from individual homeowners.

“Many for-sale-by-owner sites have been talking about this [a multiple listing service for FSBOs] for years, but no one stepped forward to do it,” said Muttillo.

“In order for it to be a success, you can’t list properties with individual owners themselves, because you’re competing with everyone,” he added.

The majority of the service’s revenue will come from advertising, Muttillo said.

The site is similar to Realtor.com – the official Web site of the National Association of Realtors – which features more than 2 million homes throughout the country that are listed by licensed real estate brokers and agents.

“It sounds like they’re modeling successful aggregator information sites like Realtor.com,” said David S. Drinkwater, a Scituate, Mass.-based Realtor who is New England regional vice president for NAR. “Anytime that you can find a way to aggregate information for consumers, there is definitely a benefit to the consumer.”

Home listings on Realtor.com, which draws as many as 5.5 million unique visitors each month, are taken from multiple listing services that allow real estate agents and brokers to share information with each other about properties they are trying to sell.

Homeowners generally can’t search and post their properties on multiple listing services unless they are working with an agent or broker.

‘Really Excited’

Many Realtors try to capture the business of owners who try to sell properties without their assistance. ZipRealty, a national full-service residential real estate brokerage, recently launched a program that enables FSBO sellers to submit a description of their property online. The information is then shared by local ZipRealty agents with their registered buyers who are searching for similar properties. If a ZipRealty client buys the home, the seller must pay ZipRealty a 2.5 percent commission upon closing.

Most home sellers still rely on real estate agents and brokers to assist them. Thirteen percent of all home sellers nationwide chose to sell their properties on their own last year, according to information from NAR. In Connecticut, the percentage is slightly higher than that. According to the 2004 Connecticut Profile of Home Buyers and Sellers, which was conducted by the National Association of Realtors, 84 percent of sellers sold their homes in 2004 with the assistance of an agent, meaning that the for-sale-by-owner rate was around 16 percent. That study is the most recent source of such statistics for Connecticut.

While FSBOs have been more popular in Connecticut than nationwide, that trend may not last long. As the market tightens, it becomes more difficult to sell a home without the help of a real estate agent, according to Mark Foreman, president of the Connecticut Association of Realtors and founder of Cornerstone Capital Mortgage in Fairfield.

Real estate experts are expecting the number of FSBOs to drop because many more homes are available for sale and properties are lingering on the market longer, making it tougher for some homes to sell.

“As the market tightens, it becomes a lot harder to sell your house on your own,” Foreman said.

Statistics from NAR also have shown that homes sold by real estate agents garner a substantially higher price than those sold by their owners, he added.

“In a competitive market, which we are in now, as a seller, there’s much more competition for how many homes are listed on the market,” Foreman noted.

So the market likely will see fewer FSBOs in the future.

Those kinds of predictions aren’t troubling Muttillo, who said real estate is cyclical and while one region may be experiencing a downturn, another part of the country could be booming.

“I don’t think the entire nation is affected the same way,” he said.

He added, “We’re really excited about the site. It’s been very well received so far. Our growth over the next six months should be very rapid.”