How can you make sure buyers use a web-platform for large purchases?

March 3, 2013 1:53 PM

I am advising on the creation of a web portal for the sales of homes. One of the concerns is that buyer and seller will find each other via the site but then carry out the purchase on their own, cutting the site out of a potential "intermediary" fee. Does anybody have any ideas / experience on how this can be addressed?
posted by BigBrownBear to computers & internet (5 answers total)

The major site that does this here charges sellers a fee for listing, ranging from 700 to 1000 depending on the package you buy. There is no cut of the sale price, because people are choosing to go without an agent to avoid paying a percentage of the sale price.
posted by jeather at 2:00 PM on March 3

Freelance sites such as freelancer.com combat this by providing an escrow service and other mechanisms that enables trust and facilitates financial transactions between parties. Basically the parties involved stick to the intermediary because the mechanisms minimize fraud.
posted by Foci for Analysis at 2:15 PM on March 3

I agree with jeather. Don't disincentivize people finding success on your site. Charge upfront for the service you provide. It feels and works better than setting out a trap hoping to snare someone's transaction.
posted by the jam at 2:45 PM on March 3

Yep, listing fees are the way to go. They're going to have to a lot lighter, but they'll be collected every time a listing is made, not just when the house sells. One of the complications here is that a) there's too much precedent for how real estate is listed and paid for because it's just too difficult to enforce and b) no one's going to give you what amounts to an exclusive agreement to pay you if the house sells, regardless of how. There's too much chance in real estate that the house will sell by some other means (someone driving by a sign, local word of mouth, efforts of local realtor) - unless you mean to keep the house's status as being for sale some kind of secret, and that's not gonna happen.

When I listed my house for sale or rent on a military rent/own site, for example, I paid a flat $80-90 for a "deluxe" listing with pictures plus some yard signs to be mailed to me. You can list on this site for as long as $40-50, IIRC. And if they had tried to tie me up with an exclusive, there's no way I would have used it.

Also, if the site developer thinks he or she is going to collect commissions at the level of real estate agents just for providing site listings, he or she will have to think again, unless there is some real secret sauce here.
posted by randomkeystrike at 5:46 PM on March 3

FWIW, this company is a large company that has lasted a long time (15+ years) -- it provides help choosing the sale price, it includes a photographer with high quality photos, there are lawyers on staff, marketing advice, lots of information given, etc -- it's a really full service company, which I would trust to sell my place if I were selling. I would not be giving some new company hundreds of dollars for the same thing.
posted by jeather at 7:07 AM on March 4