As housing sales cool in many markets, a battle for new listings is heating up between traditional real-estate brokers and their discount rivals.

Full-service brokers, who generally charge 5 percent to 6 percent commissions, say their marketing expertise is needed more than ever to attract buyers in a soft market. Countering this are proponents of selling without an agent or with limited service, who say you can't afford to pay for a full commission now because your home isn't worth as much as you thought it was a few months ago.

Which side is right depends largely on your circumstances and ability to do some of the work ordinarily handled by agents. Still, both traditional brokers and discount operators aren't taking any chances and are adding a host of new services to get sellers to sign up. The new offerings could be a plus for consumers as they weigh strategies for selling their homes.

A number of full-service brokers are adding tools that allow sellers to better track buyer interest and other activity. Real Living Inc., a regional brokerage firm based in Columbus, Ohio, recently beefed up its Web site to enable sellers to see how many people have looked at their homes and what comments they made. Baird & Warner, a Chicago-based firm, reports to sellers how often visitors to the company's Web site clicked on their listing and how many competing homes were sold or came on the market. Prudential Real Estate affiliates, a unit of Prudential Financial Inc., recently began offering a similar service to its customers nationwide.

Discount operators, which typi-
cally offer fewer services than traditional brokers, also are adding more amenities.

Owners.com, an online marketplace for people selling their own homes, recently joined with RealEstate.com, a unit of IAC/Interactive Corp., to connect consumers with local real estate agents willing to provide sellers with an estimate of their home's value at no charge. ForSaleByOwner.com, acquired by Tribune Co. Monday, recently teamed up with Home Depot Inc. to provide consumers with yard signs, a brochure dispenser and a 14-day trial subscription to ForSaleByOwner.com's Internet listing service for $14.97. The company normally charges $89.95 for one month of its basic listing service.

The heightened competition comes as home sales are slowing and mortgage rates edge higher. Last week the National Association of Realtors said existing-home sales fell 2.1 percent in the first quarter from a year ago. Average rates on 30-year mortgages are 6.78 percent, according to HSH Associates, the highest since June 2002.

The cooling market is creating challenges for sellers. Mike Rothschild, a computer systems consultant, tried unsuccessfully to sell his four-bedroom home in Evanston, Ill., for $599,000 through a for-sale-by-owner Web site last year. In February Rothschild turned over the listing to an agent with Baird & Warner, who cut the asking price to $578,500, ran an open house for brokers and advertised the listing in local papers. The house sold for $548,000 in March.

The real estate industry's traditional commission-based sales approach has come under assault in recent years from an increasing cadre of discounters, many of which use the Internet as a tool for home searches. Some discount brokers put houses into a multiple-listing service for a flat fee, generally several hundred dollars, and leave it to the owner to show the home and do much of the other marketing work. Others offer a menu of services - such as negotiation of contracts, advertising and showings - from which sellers can pick and choose. Still others offer only the basics, such as yard signs and an Internet listing, for people who are selling on their own. Many sellers using these services offer to pay the agent representing a buyer 2 percent to 3 percent of the sale price, but they save the additional 3 percent or so normally paid to the agent representing the seller.

Roughly 70 percent of homeowners used a traditional broker to sell their homes, according to a September survey by Real Trends, an industry publication, down from 74 percent in 2002. The number of homeowners taking a for-sale-by-owner approach also fell in that period, to 12 percent from 14 percent. Instead, a rising number of sellers turned to alternatives such as fee-for-service, flat-fee discounters and flat-fee multiple-listing placement services, the survey found.

Firms that promise lower costs for consumers say they expect to benefit from a slowing market. "People are becoming much more concerned about what they're going to have left in their pockets after they sell," says Steve Ozonian, chief executive of Help-U-Sell Real Estate in Irvine, Calif., which offers varying levels of services for fixed fees. Listings are up 25 percent this year, he says.

Mike Mullins, a manager with a technology consulting firm, is trying to sell his $230,000 townhouse in Millbury, Mass., on his own and drew about a half dozen people to an open house last weekend. To boost traffic, he is considering signing up with a firm that would list his house on the multiple-listing service for a flat fee of roughly $500.

To underscore the case for using a broker, the National Association of Realtors, which represents licensed real estate brokers and agents, is spending $25 million this year on a television and radio campaign that focuses on the obstacles of selling a home on your own and the benefits of using a Realtor.

Coldwell Banker Real Estate, a full-service unit of Cendant Corp., launched a Web site that makes it easier for brokers to post photos of the homes they are selling. John L. Scott Real Estate, Seattle, added a feature to its Web site that allows home buyers to view and manipulate aerial photographs of homes for sale and surrounding neighborhoods. Cendant is rolling out the same tool on the national Web sites for its five real estate brands.

Firms are also using more traditional approaches. Philadelphia-based Prudential Fox & Roach Realtors is encouraging its agents to provide frequent updates to sellers, who may grow antsy as the time it takes to sell a house climbs.

Meanwhile, the number of sites aimed at do-it-yourselfers continues to expand. Lori Alden, an economist in Petaluma, Calif., recently launched FSBOPrimer.com, which provides advice for people who want to sell their homes. In June Eric Fuller, a consultant in La Jolla, Calif., plans to launch PropertyPig.com, which will offer listings of for-sale-by-owner properties.

Pat Rioux, owner of List For Less, a discount firm that provides $555 MLS listings in Massachusetts and New Hampshire, says her bare-bones service isn't suitable for sellers who don't have time to show their home and are uncomfortable with contracts and price negotiations. But others can save thousands of dollars by using her service, she says.

Source:
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