FSBO to Realtor system?

I have just run across an article about a strange new website called hungryagents.com. The idea behind hungry agents is that if your are looking to sell you list your home on this site and Realtors are supposed to bid on your listing. With the number of Realtors in most markets I am not sure why this service would be necessary but anyway here is an article that talks about the service.

Home sellers caught in the current ebb in real estate sales can’t help getting a bit discouraged after putting up a “for sale” sign, only to see few prospects look at their property. It’s a trend that has vexed Realtors who’ve been fighting a vicious circle that has seen interest rates go up while home sales go down. About the only way to sweeten a deal without chopping the purchase price would be to negotiate the 6 percent to 7 percent commission paid to real estate agents.

An online service, HungryAgents.com, offers home sellers the option of doing just that, often netting home sellers a commission rate as low as 3 or 4 percent.

In Elgin alone, about 80 Realtors currently are bidding on 38 properties registered at the site.

Tony Wiszowaty, a veteran of 21 years in real estate sales and a long-time agent for RE/MAX Suburban, has used HungryAgents for more than a year. He enthusiastically endorses the service, which he said generated four Elgin-area home sales in only his first month as a participant.

“It’s been good for my business,” Wiszowaty said. “I think it’s been great for homeowners, because they can find some competitive rates with good companies that are out there,” he said.

He suggested HungryAgents has been a godsend for a lot of homeowners who are desperate to sell their home but are either unwilling or unable to pay prevailing commission rates. He scoffs at suggestions that a participating agent may unwittingly label his realty a discount broker.

Wiszowaty points out that preliminary negotiations between agent and seller are done online and are completely anonymous until the seller decides he wants to make contact with an agent. The number of agents is pared down to three, who then meet with the seller in person and bid for the listing by offering bare-bones commission rates and a description of what services will be provided.

After a home seller signs with a Realtor and the home is sold, HungryAgents collects a $795 fee from the seller, irrespective of the sale price of the home. Wiszowaty dispels any notion that Realtors working in his office — or at competing real estate agencies, for that matter — might resent participating agents for raking in sales generated by their acceptance of reduced commission rates.

“Nobody in the multiple listing service knows that a listing is taken by a HungryAgents Realtor,” Wiszowaty said.

The only place the amount of the final commission appears, he said, would be on a closing statement.

Wiszowaty said there is no stigma attached to agents who accept lesser-priced commissions. He said commission rates are kept confidential to preclude other Realtors from refusing to show listings obtained through HungryAgents.

Vince Rizzo, a real estate broker and a co-founder of the St. Louis-based company, emphasizes that HungryAgents is not a real estate agency. Rather, he explained, it’s sort of an online “dating service.”

With the home-selling season now in full swing, Rizzo noted, HungryAgents is concentrating efforts in the suburbs, which he described as hotbeds of real estate activity.

“Obviously, Elgin is one of them,” Rizzo said. “There’s an awful lot of agents out there who are looking for business — even if they have to take less of a commission.”

He expressed optimism about the future of the company after launching the company’s Web site about a year ago. Even with limited advertising in Chicago, Indianapolis and Kansas City, the results, Rizzo noted, surpassed company expectations. “They really weren’t expecting to be in all 50 states for a least a couple of years,” he said. “They bypassed that goal in about six months.”

Rizzo also brushed aside suggestions that participating Realtors jeopardize their operations by accepting bargain-basement commission rates.

“If you’re an agent, you’re not going to put a sign in your window that suggests you’re selling homes at 3 or 4 percent” commission, Rizzo noted.

So now that you see how this system works it seems that there are people willing to let a company charge them $750 to get into the middle of a regular early part of the real estate tranaction process.

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