FSBO (FIZZ-boh!) Madness in Madison

by Alex Stenback on January 4, 2006

Fsbo_madisonWe usually make fun of our neighbors over in cheeseland, but let’s withhold the mock for a bit while we point out a piece in the NYT on a great little FSBO (For-Sale-By-Owner) enterprise put together by two Madison, WI women. [Hat tip to our man doodledee, who linked-up the article.]

Operating out of a spare bedroom, with a website – FSBOMadison.com – that "looks like it was designed by some high school student five years ago" (their words) they have managed to capture 20% (2,000 homes listed, 72% sold, in ’05) of the real estate listings in Madison.   

So why has FSBO Madison worked so well when other, flashier FSBO sites don’t even sniff this type of market penetration? The article suggests it’s partly the nature of Madison – smallish, with a stick-it-to-the-man ethos that runs deep in the long-time college town.  All true, but this quote really gets to the heart of it, we think (italics ours):

Most entrepreneurs want to quickly grab a piece of that $60 billion in commissions by offering a price lower than what most real estate agents charge to attract consumers. Ms. Miller and Ms. Murphy, working patiently, are focused on providing a place for buyers and sellers to meet and exchange information

"Meet and exchange information" – that’s it.  The simplest of markets, and they aren’t trying to monetize every possible aspect of it. It’s like a craigslist Ad with a yard sign delivered, for $150.00.  That’s why this has worked for them.
Owner’s Website Gives Realtors Run for Money [NYT]

{ 2 comments… read them below or add one }

FHA Loan Broker January 5, 2006 at 3:21 pm

Your absolutely right… also, with that kind of local signage, it’s a visual confirmation (to neighbors) of it working, just like top agents with lot’s of signage, they get alot of business from it. I love this quote from whom I’m sure is a great real estate agent “It’s a commission-avoidance scheme”… I’m sure there are tons of mortgage brokers, title companies and others who know a few realtors that have a “paying for lunch-avoidance scheme” since they have to take them to lunch to “earn” their business…

Sheyla March 13, 2006 at 3:36 pm

What do they charge for that?

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