Iggys House

While browsing through the required blogs I came across a post discussing the recent launch of www.Iggyshouse.com, a real estate website giving homeowners the ability to list for free their homes for sales on the MLS(Multiple Listing Services). The MLS is a very large database and information system responsible for selling more than 70 percent of U.S. homes. Generally, this system was only available to homeowners if they listed their property through a real estate broker. However, in some cases homeowners could get access to a local MLS if they paid a fixed fee, which was generally about $500. An MLS is a very efficient information sharing system among real estate brokers representing buyers and sellers. Typically there are various commission sharing arrangements among brokers. MLS listing gives the property tremendous exposure to the public as well as to millions of real estate brokers representing buyers or those brokers wishing to partner with a seller's broker to find a buyer. The MLS listing feeds into Realtor.com, AOL,MSN, The Wall Street Journal and other sites popular with buyers search for a home. Generally an MLS listing has certain restrictions as to the amount of information included, however, Iggyshouse.com allows sellers to create elaborate websites with detailed information such as pictures of every room in the house, as well as a video tour. The parent company of Iggyshouse.com is also the owner of a sister company called BuySide Realty, which is an online real estate agency that shares 75 percent of the commissions it receives with the buyer. The parent company bases its business model on the assumption that all sellers will become buyers. They therefore direct sellers who use their free website to BuySideRealty in the hope that sellers will use this web site to purchase a new home. The article also states that there are 1.1 million people who try to sell their home with the services of a real estate broker as well as 400,000 people who pay a fee to be MLS listed.
My initial reaction to this article was that the services provided by Iggyhouse.com would be viewed negatively by real estate brokers and other real estate Internet sites because home sellers would not use real estate brokers as much and therefore commissions would decrease. For instance, as sites such as Buyowner.com, which helps homeowners sell their homes could lose business. However, after further considering the service to be offered by Iggyshouse.com I came to the conclusion that this new company will not have a significant impact on real estate brokers. Sellers who use a real estate broker only for the purpose of being MLS listed and today pay a fixed fee, and who decide instead to use the MLS free service by Iggyhouse.com might find this service attractive. However, those sellers who use a full service real estate broker today will probably not switch to Iggyhouse.com since they will continue to realize that the advantages of using a broker far outweigh the small benefit of saving the cost of getting the MLS listing for free. I do think this free service will hurt those websites catering to seller and which only offer sellers the opportunity to list their homes on their website but do not provide access to MLS. I think these websites will respond by also offering the MLS for free to their users. This I feel would diminish the competitive edge that Iggyhouse.com is attempting to achieve. Although Iggyhouse.com will provide additional exposure for those who want an MLS lisiting without having to use a broker I feel that these sellers will eventually have to deal with a broker if he wants to sell the house, for example he may have to deal with the buyers broker. And in the negotiations the seller will have to pay some or all of the commission to the broker. Notwithstanding anything else the main objective is still to sell your house, and if necessary sellers will still be willing to pay thousands of dollars in commissions to achieve that objective. Also, I feel that because real estate brokers provide many other services to sellers that most sellers will still not want to go it alone and that a free MLS listing will not induce them to forgo the services of a broker. However, for those sellers who today try to go it alone this I believe will be a valuable service. As for Buyside Realty, I feel this is an excellent marketing technique that will take full advantage of all the traffic that Iggyhouse.com will receive for its free service. What is unclear is whether enough business will be generated by BuySide Realty to compensate for the free services that will be offered by Iggyshouse.com.