Brian Lund, a resident of Orange County, Calif., has participated in real estate transactions but hadn’t tried the do-it-yourself route until he learned about a company called Iggys House that offers free multiple listing service exposure for sellers in 20 states.
His wife, Pam Tran, read a news article about the service, which was launched in April as a counterpart to BuySide Realty, a company that offers cash rebates to buyers in six states. “We hadn’t done anything by ourselves before. I wasn’t even aware there were services like this,” Lund said.
The Lunds were still mulling over whether to sell their home in Huntington Beach, Calif., when they learned about Iggys House, and Lund said that otherwise they “probably would have gone with a broker. It’s just one of those things — why don’t we give it a shot?” he said. They listed their home for sale with the Web-based service in April.
Iggys House allows consumers to post property information, photos and videos at the IggysHouse.com Web site and to enter property information in an MLS database that can be accessed by agents from other real estate companies. Many MLSs also forward property information they receive from participants for display at popular property-search site Realtor.com and other public Web sites.
The cost for an MLS listing, Web ad at the Iggys House and display at Realtor.com: zero. If the property sells, the cost is: still zero.
In cases where the free MLS listing service isn’t available, sellers can still post free information and multimedia content for their home at the IggysHouse.com Web site.
The company maintains an online store that sells items such as yard signs, brochure boxes, lockboxes and real estate forms. Also, the company has announced plans to roll out fee-based a la carte services and is considering whether to allow advertising at the IggysHouse.com site.
“I put both my e-mail and my phone number on (the Web site),” Lund said, and he and his wife personally fielded responses to the listing. “Eight to 10 people seemed like they were really serious … five actually came out to see the house.”
The Lunds chose to offer a commission of 2.5 percent of the sale price to an agent who represented a buyer in a sale transaction. Total real estate commissions typically range from about 4 percent to 7 percent of a home’s selling price and are divided among agents and brokers on the buy side and the sell side of the transaction, while the Iggys House model has no commission on the sell-side and allows buyers to decide what to offer — if anything — on the buy-side of the deal.
Lund said all of the buyers who viewed their home were represented by agents. “I wanted to have an agent at least on one side of the transaction,” he said, adding that a relative who has a real estate license did offer some assistance with the transaction, too.
The home sold eight weeks after it was listed at close to its asking price — Lund said there was “a minor adjustment when we got down to the negotiation.” Some other for-sale homes in the same neighborhood appeared to be overpriced, he said. “In my opinion, they were pricing very high and having to bring the price down a few times.”
After their home sold, the Lunds decided to work with BuySide Realty, a sister service to Iggys House that refunds 75 percent of the buy-side commission to the buyer. Both companies were founded by the creators of pioneering online stock brokerage company Web Street, which launched in 1996, went public in 1999 and was sold to ETrade in 2001. BuySide Realty is licensed in 28 states and offers services in California, Florida, Georgia, Illinois, Virginia and Washington.
BuySide does not allow clients to make an offer on a home listed under $200,000 — the company’s Web site states, “In order to pay our experienced, licensed agents a competitive salary and service-based bonuses while also passing a guaranteed 75 percent of our commission to buyers who find their own homes, we are currently limiting our services to homes that are listed for at least $200,000.”
BuySide Realty and Iggys House are affiliated with California-based BuySide Mortgage Corp. and Loan Concepts Inc., though clients of BuySide Realty are not required to use the company-affiliated mortgage services. The companies’ agents and loan coordinators are paid a salary rather than a commission.
“I know they have a mortgage company — they didn’t push me toward that,” Lund said, and he ended up choosing another company.
“I was nervous about not meeting an agent face-to-face,” said Lund, as both companies offer Internet-based services and he hasn’t yet met the company’s agent face-to-face even though his home-purchase transaction on a home in Costa Mesa, Calif., is expected to close this month. “There’s something about that actual connection that makes you feel better,” he said, adding that he has been “pleasantly surprised” about the transaction process.
“It was very seamless,” he said, and he expects the company’s business model to catch on. “It’s the way of the world now, with the Internet.”
Joseph Fox, CEO of IggysHouse.com Inc., the parent company for the affiliated mortgage and real estate companies, said that the free MLS service should expand to 37 states over the next few months. The service is now available in California, Colorado, Connecticut, Florida, Georgia, Illinois, Indiana, Kentucky, Maryland, Massachusetts, Michigan, Minnesota, New York, North Carolina, Oregon, South Carolina, Tennessee, Texas, Virginia and Washington.
Company officials researched state rules about service requirements for real estate professionals before launching Iggys House in order to make sure the business model was compliant, Fox said. Some states have passed so-called minimum-service rules, for example, that have drawn opposition from federal agencies because they can limit the range of real estate business models available to consumers by requiring real estate professionals to perform a specific range of services even if their clients do not want or need those services.
“We’ve exhaustively researched all of the different states where we are going to go in and where we are not going to go in,” he said. There are plans to launch a referral program that will offer sellers the ability to work with traditional agents, he said, and the company also has plans to offer a menu-based pay-per-service plan, Fox said.
“I truly believe this should be an a la carte industry,” he said.
While Iggys House does not charge for its services at this time, the company’s hope is that consumers who use Iggys House will also choose to use the company’s other services and affiliates’ services. The BuySide Realty Web site offers to prequalify consumers for a mortgage and to connect consumers with its loan officers who “work with leading national lenders.” BuySide Realty has a partnership with Chase, the home-mortgage unit of JPMorgan Chase & Co., to provide the preapproval services to BuySide clients.
Iggys House, Fox said, is “free exposure (for sellers) … in exchange for the ability to educate them” about other company offerings.
“We know what it’s like to change an industry, and it’s happening here finally. People are saying, ‘What the hell? The industry hasn’t evolved,’ ” Fox said, adding that the company’s business model could play a role in shaping the industry’s future.
Iggys House clients can terminate their listing at any time, he said. “It’s about as close to a no-brainer as you are ever going to have. If you start a process with us and end up deciding you need a traditional agent — go. We want you to be happy.”
Iggys House does not have membership in all of the MLSs in a given state, Fox said. He noted that there are dozens of MLSs in some states. “It is not efficient to be in all of them,” he said, adding, “the most important thing for the self-directed buyer is that you show up in Realtor.com.”
Nikhil Gupte, who posted information about a for-sale unit on West 84th Street in New York City at the IggysHouse.com Web site, said the site is “a good concept” though he didn’t receive any calls from the posting. He tried to register for the free MLS service but found it wasn’t yet available in his state, he said.
While the Web site design “is excellent” and there is “definitely a market for it,” he said he had trouble in his attempts to delete the for-sale information from the site.
***
Send tips or a Letter to the Editor to glenn@sandbox.inman.com, or call (510) 658-9252, ext. 137.
