A Do-It-Yourself Philosophy
Slouched side by side on a bench, cousins Mary Clare Murphy and Christie Miller look like many other low-key moms in Madison, Wisconsin. You would never guess the two women had cracked the National Association of Realtors’ monopoly on house sales by launching FSBOMadison.com, believed to be the country’s largest for-sale-by-owner Web site.
Self-described Luddites who missed watching their own CNBC interview with Maria Bartiromo because neither has cable, Murphy, 52, a former nurse, and Miller, 39, once a social worker, run their hectic, seven-day-a-week operation from a cramped bedroom office in Miller’s house. Their business rationale goes like this: NAR agents typically earn about 6 percent commission on each sale, "creating fees that add up to tens of thousands for the seller," Murphy says. And, she adds, "They don’t even clean your house for showings — you have to do it." For just $150, FSBOMadison (pronounced fizz-boh) will list a house, manage the online traffic, and throw in a teal yard sign. Judging by the success of the site — which now lists almost 15 percent of all houses on the market in and around Madison, and gets more Internet traffic than the multiple-listing service operated by area agents — it’s clear that they’ve tapped into a revolutionary new way to sell real estate.
The eureka moment came in 1997, when both women had just left their jobs to care for infant daughters. Murphy and her husband were having problems selling their home, and when an agent annoyed Murphy by claiming that he made more money than her husband, she said, "There is no way we are going with an agent." Murphy had sold a house once, so she knew that putting an ad in the paper was hit-or-miss. When her husband, a kidney specialist, suggested creating a Web site to advertise their home, Murphy asked Miller whether she wanted to help her launch it. Miller’s husband, a tool and die manufacturer, whipped up a prototype yard sign while Murphy and Miller contacted people who were advertising their own homes in the local paper and offered them a free ad.
On February 28, 1998, they launched FSBOMadison with 10 listings. The speed with which their signs mushroomed around town, cropping up on the lawns of modest bungalows and million-dollar Tudors, took them by surprise. "That first year, we expected to list 100 houses, charging $75 per listing," Murphy says. Instead, they posted 333 and more than doubled that number to 777 the next year. Today they upload listings for 2,000 houses and earn almost $300,000 annually by charging just $150 for each.
In some ways, the college town of 208,000 people seems ideally suited to a for-sale-by-owner market. Madison was a hotbed of antiwar protest in the 1960s, and locals, true to their rebellious reputation, tend to be wary of any slick commercial enterprise. Murphy and Miller’s lack of airs went a long way in building trust. "They are two nice ladies who wear Birkenstocks, and that’s what Madison loved," says Francois Ortalo-Magne;, a real estate professor at the University of Wisconsin. FSBOMadison was also a great fit for the women, who split the work. Miller, the quieter of the pair, describes herself as "the grunt" who plows through administrative tasks — such as uploading property descriptions for people without computer access — and she says her chatty cousin is the PR person. When Murphy hears of agents trashing FSBOMadison, she has been known to take action in defense of the business, like the time a Realtorfiled a complaint, claiming Murphy and Miller were selling real estate without a license, and an investigation concluded that FSBOMadison was legitimate.
However, thanks to their previous careers, Miller and Murphy say, they’re both good at recognizing when sellers need professional expertise. "If people come to us with a million questions or they seem to be emotionally attached to their properties," Murphy notes, "we say, ‘This isn’t for everybody, and this probably isn’t for you.’"