eBay Adds HomeGain
January 4, 2002
Dot-com Partnership Aims To Give eBay-ers More Home-Selling Options
By Camilla McLaughlin
Inman News Features
Pasadena-based Internet auction giant eBay is adding new services to its residential real estate section through a partnership with Emeryville, Calif.-based online agent referral service HomeGain.
The partnership may seem a digression from eBay?s auction business, but Doug Galen, who heads eBay?s real estate operations, said the move is in keeping with eBay?s mission of creating electronic marketplaces.
"We?ve spent the greater part of 2001 thinking about how eBay should participate in real estate and how we can add value for the industry and the consumer," said Galen.
Focus groups of real estate practitioners, eBay customers and others pointed the direction for eBay?s expanded menu of residential real estate services.
"85 percent of sellers want an agent as part of the sale," said Galen. "But eBay users are also people who want to be involved in transactions. That is why they love eBay. All of these things suggested we should give our real estate consumers choices."
Home sellers as a result now have three options on eBay: They can choose a full-service real estate agent who participates in HomeGain?s agent referral network, select a limited service option also through HomeGain or simply use eBay?s real estate classifieds section to market their home on eBay.
Sellers who opt for a full-service broker start by completing a home profile online using HomeGain?s technology. HomeGain then forwards the property profile sans the seller?s identity to agents, who respond with a proposal and marketing plan, background information, sales track record and proposed commission using HomeGain?s password-protected agent evaluator service. The seller remains anonymous and pays no commission until the home sale is completed.
Sellers who select the limited service option pay $695 to hire an agent to list the home on the MLS. These sellers also complete HomeGain?s online home profile and receive personalized proposals for the flat-fee service from agents participating in HomeGain?s network. HomeGain?s property evaluation mechanism is available to provide prior-sales information to help sellers set a price for their own home.
"Since we have lots of customers who want to feel in control of the transaction, we wanted to create a scenario that gives the consumer a basic level of service, then allows the consumer and Realtor to see whether there are additional services the customer wants to purchase," Galen said.
HomeGain CEO Bradley J. Inman, who also is co-founder and part owner of Inman News Features, estimates that almost 90 percent of sellers who select limited service end up purchasing additional services. When HomeGain tested a flat-fee option last year in the Dallas market, a substantial number of sellers purchased additional agent services including pricing and sales contract negotiation, according to Inman.
Galen said HomeGain is a perfect fit for eBay?s real estate vision. "We needed an electronic way for consumers to connect with Realtors, and we needed lots of agents who wanted to offer this service. HomeGain provides both," he said.
Sellers also can choose to sell their home using eBay?s auction process or include the home in eBay?s roster of properties for a set fee that ranges from $50 to $200, depending on the service. Sellers must agree to advertise their home on eBay if they plan to choose any option other than the full-service package.
Real estate agents pay no additional fee to participate in eBay through HomeGain. They pay HomeGain a 20 percent referral fee on closed full-service transactions and $200 for a limited service transaction, but keep 100 percent of fees for additional services.
Galen said the HomeGain-eBay setup provides prequalified leads for real estate practitioners.
"Since the customer has already agreed to sell at eBay, we turn a no-name lead into a qualified lead of someone who has chosen a specific service," he said.
Jeffrey Bastress, owner of Backroads Real Estate in Boxborough, Mass., sees the setup as a new way of doing business. He said the fees HomeGain collects are offset by decreased spending on print advertising and increased word-of-mouth advertising. Bastress said using the Web has reduced his overhead costs and enabled him to work with more home buyers and sellers.
The HomeGain program was slipped onto eBay?s Web site this weekend, but is still in development and won?t be formally launched until mid-winter.
Copyright: Inman News Service