Real Estate Revolution Online
By Linda Rawls
Palm Beach Post Staff Writer
BOCA RATON- The idea is snowballing. Yourigloo Inc., a "click and bricks" real estate company in business less than a year, has listed more than $100 million worth of homes nationwide and sold more than $43 million worth. The key to the company's success could revolutionize the real estate business: Yourigloo has saved home sellers $1.7 million in listing commissions.
It's done so while other Internet companies- including its chief competitor, Homebytes.com of Richmond, Va. - have failed.
"We are a real estate company and they were a Web company, "President Ron Gellert said from yourigloo headquarters in Florida Atlantic University's Technology Business Incubator. "We use the Internet to make our discount real estate services available," Gellert said.
Originally called yourigloo.com, the company targets its services to "FSBOs," pronounced "fizzbows"--"For Sale By Owner" homes whose sellers don't want to pay real estate companies commissions to list their houses for sale.
For a flat $298 fee, the yourigloo client gets a listing in the local multiple listing service, which traditional "for sale by owner" homes can't get. Clients also get a "For Sale" sign for the front yard and pricing advice from an affiliated agent in a local office -- hence the "bricks" part of the operation.
The MLS listing leads to posting on other Internet sites such as the powerful Realtor.com, whose 1.3 million listings come only from the MLS. Realtor.com puts sellers and buyers directly in touch, eliminating the listing agent--at a considerable savings for sellers.
A real estate commission, paid by the seller, is about 6 percent of the sales price and generally is split 50/50 between the listing agent and the agent who finds the buyer.
If yourigloo clients find their own buyers, their only cost is the original $298 listing fee. If a real estate agent finds a buyer, then the yourigloo seler pays a 3 percent sales commission, with .5 percent going to yourigloo. The percentages can vary.
The yourigloo concept is new and is still being debated in the real estate community.
They're trying to find a cheaper way, but it's not always a better way," said Ken Duke, chief executive of the Regional Multiple Listing Service in Lake Park. "A contract might not be done properly, and sellers may open themselves to liability."
For sellers Maressa Rivera in the Heathrow development of Lake Mary, yourigloo offered "just what we were looking for."
"This is a gated community and you can't put up signs,"Rivera said of her Semonole County golf course community near Orlando. "So you have to have somebody marketing your house for you. Yourigloo came to our rescue."
Rivera and her husband, Sam, both 40, listed their four-bedroom, three-bath house for $234,900. They had a signed contract for $227,000 two days later.
The company with the unlikely name, considering its South Florida origins, has listed 480 houses nationwide since August, and has sold 203.
The average listing price is $260,000, the average selling time 37 days.
"We thought we would be attractive to the $150,000 and below seller," company President Gellert said. "But we found that a homeowner's desire to save money isn't related to the price of the house."
Yourigloo expanded to Tampa, Orlando and Jacksonville in December, and opened offices in 27 markets outside of Florida. After South Florida, which has accounted for 200 listings, yourigloo's biggest market has been Chicago, followed by Atlanta.
The privately held company employs 12 people and expects to reach operational profitability by July or August, CEO Elliot Koolik said.
In October the company plans to open offices in 30 more cities, with a goal of 177 markets and 75 employees by 2003.
The company offers mortgages services and plans to add title services soon.
In July, yourigloo will open a call center that will give customers access to yourigloo listings around the clock, Koolik said.
"You can call and get information on a listing 24 hours a day, seven days a week," Koolik said. "You can't get that at Arvida."