Home sales firm online

Homebytes designed to aid do-it-yourself sellers of houses

`We're a viable alternative'

Locals in industry question its impact in Baltimore area

July 30, 2000|By Gus G. Sentementes | Gus G. Sentementes,SUN STAFF

A new Internet company, geared to lure the for-sale-by-owner market, is breaking into the Baltimore housing arena, looking to take a bite out of local Realtor business. Yet, area agents and brokers say that Homebytes might not be able to deliver on all that it promises.

For a one-time charge of $499, the company, started in 1998 and based in Richmond, Va., will put a seller's home into the local multiple-listing service, the powerful databases that real estate agents use to find and sell homes.

Homebytes, which claims to have licensed brokers in every state, is gaining access to the 1,100 multiple-list systems nationwide at the rate of 30 a month, said Jeff Tuck, vice president of real estate services. A Homebytes seller would have his or her home posted on the company's Web site as well as Realtor.com, the Web site for the National Association of Realtors.

Homebytes provides local market data to help for-sale-by-owner clients (FSBOs) price their homes as well as a marketing kit, and offers unlimited advice over the phone from affiliated real estate agents operating from regional call centers.

The company had listed more than $33 million in inventory by mid-June, after initially rolling out in four markets - Raleigh/Durham, N.C.; Kansas City, Mo.; Dallas/Fort Worth; and Syracuse, N.Y. - in March.

"In the past, the FSBO's greatest disadvantage was no exposure and little advice," said David P. Clark, Homebytes president and chief executive officer. "The home seller who goes through a traditional Realtor gains advantages, but pays a tremendous amount for it. ... We're a viable alternative for the self-directed homeowner who wants to take control of the home sale."

Clark said he's not poaching clients from the traditional brokers and agents. Rather, he said, it's a business model that ultimately brings FSBOs back into the fold of real estate agents, since most Homebytes clients end up offering a commission - typically around 3 percent - to the buyer's agent.

But area real estate agents are casting a wary eye toward Homebytes, based on past experience with smaller real estate Internet ventures that cater to the FSBO market.

"The consumer is attracted at first because of the price, but they really want the expertise to make sure it goes fluidly," said John Evans, president and chief executive of O'Conor, Piper & Flynn ERA.

Problems arise, he said, when FSBOs expect a lot more service than an Internet or discount broker company is able to provide.

"I know people who specialize in representing FSBOs - their best clients are people who've tried to sell houses by themselves," said Mary Anton, executive director of the Maryland Association of Realtors. "They will tell you there's no one who appreciates better the value of a Realtor than someone who's tried to sell it by themselves."

Homebytes said their clients aren't on their own. But Hank Kucin, a former real estate agent who used the site to sell his Frederick County home, said the process is "not for the faint of heart."

"You have to do the legwork," Kucin said. "It's for some people who do have some background in the real estate industry and are interested in saving some equity from their home."

The marketing kit provided to sellers includes tips on how to market their home, yard signs, fliers and legal forms. They can also purchase an optional lock box that allows buyers' agents to gain access to the home when the seller is not around.

Still, independent home sellers often need more than a kit to help close a deal, said area real estate agents, pointing to potential perils in taking the FSBO-route, such as setting too low a price.

Any savings on agent commission might be wiped out when a below-market price is agreed upon, said brokers and agents.

"The seller doesn't get the expertise, the knowledge or the negotiating skills that a Realtor has, so they end up many times getting less money for the home," said Joan Solomon, sales manager for the Greenspring office of Long & Foster Real Estate Inc.

With FSBOs accounting for 16 percent of homes sold last year, according to the National Association of Realtors, many analysts said people will continue to look to the Internet to buy or sell their homes.

"Part of it is a function of the good [real estate] market, and part of it is baby boomers [who] have sold three or four homes, and they're more experienced buyers and sellers who think they can do it themselves," said Laurie Moore-Moore, editor of Real Trends, an industry newsletter. "Whether or not they can is another question."

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