August 24, 1998 Real estate site aims to make a home sweet home on the Internet Hans Koch is either the bravest or the most foolhardy of Internet-commerce entrepreneurs. He's competing against not only Microsoft, but real estate agents nationwide. It's hard to imagine a more entrenched set of competitors. But Koch's Abele Owners' Network site (http://www.owners.com) stands a good chance against them, because Koch is offering his customers a chance to make as much as 6 percent more when they sell their homes. That's the commission that real estate brokers charge when they help you sell your home. If you sell it yourself (which is what Owners.com aims to help you do), you pocket the difference. On a transaction that amounts to hundreds of thousands of dollars, 6 percent is no chump change. One of the big disadvantages of traditional "for sale by owner" home sales is that, without a broker, your house doesn't get listed in the exclusive property database used by all the real estate agents in your area. This multiple listing service, or MLS, contains information on all the houses for sale in a particular area, along with details about each house, asking price, and pictures. The MLS is a staple of modern real estate -- it's a storehouse of inside information that gives real estate agents an advantage over ordinary people and makes these agents worth hiring. Selling your house yourself keeps you out of the local MLS and cuts down dramatically on the number and quality of prospective buyers. What Koch's site does is offer a public property database on the Internet, thus making an end-run around the MLS cartels. Owners.com's database is free for anyone to browse, and anyone can place his or her own for-sale listing in the database. A listing without pictures is free, and Owners.com charges $65 to $115 for packages that include online pictures and physical yard signs. This year, Owners.com will list about 200,000 properties -- a relatively small number. Koch's success hinges on whether he can grow that number while increasing traffic to his site through partnerships and aggressive marketing. Like many I-commerce ventures, Owners.com needs to reach a critical mass of customers and site visitors before it begins to exert "gravitational pull," and attract customers on its reputation alone. Meanwhile, Koch faces a host of competitors. Most are aligned with realtors, rather than consumers. The competitor with the deepest pockets is undoubtedly Microsoft, whose recently launched HomeAdvisor (http://homeadvisor.msn.com) seeks to be a one-stop source for everything related to home sales. HomeAdvisor is a remarkably well-designed, well-organized site, and it provides a wealth of information for prospective buyers, including financing information, local home sale information, and general guides for getting started and understanding the language of real estate. HomeAdvisor, like most online real estate ventures, is working in close cooperation with real estate agents -- it's not trying to use the Internet to sell homes in a new way. Instead, HomeAdvisor's listings come straight from MLSes, and prospective buyers are referred to brokers when they find a house they're interested in. Microsoft is taking the safe route in this market -- and, given the heat that Koch has taken from realtors, that may be a smart move on Microsoft's part. But Koch still has that 6 percent advantage, and, over time, that will draw customers to his site. The efficiencies of the Internet make it certain that someday, someone -- maybe Owners.com -- will make a successful end-run around the brokers, or force brokers to reduce their commissions. Dylan Tweney (dylan@infoworld.com) has been covering the Internet since 1993. He edits InfoWorld's intranet and Internet-commerce product reviews. Previous columns by Dylan Tweney Comparison shopping takes the punch out of online branding game August 17, 1998 No mere bookstore, Amazon.com wants to be an online retail giant August 10, 1998 Sex scam points out lack of safeguards in online business August 3, 1998 Every column since August, 1997