For Sale by Web
It's the spring home-selling season, and Colby Sambrotto might be the only one in the real-estate industry hoping for a slowdown. Sambrotto runs ForSaleByOwner.com, and when sales are sluggish, listings usually pick up. After all, if a homeowner has to cut the selling price, an easy way to preserve the profit is to cut out the middleman, or real-estate agent.
Over a crab cake and soda at the Four Seasons in Washington, D.C., Sambrotto charts the history of the website he helped launch back in the Internet's salad days (1999) after a career in financial services. Sambrotto and his partner did not go the venture-capital route, so when the dot-com meltdown occurred, there were no investors clamoring for payback.
Running the business on a shoestring out of offices in New York's Silicon Alley proved no barrier to success: He says revenues have doubled each year since 2001, though the privately held company doesn't disclose its numbers. Last year's listings topped 50,000, still small, of course, compared with the multiple listing service of the nations Realtors. Sellers pay $250 for a six-month listing, a yard sign, and a slide show on the website.
The service has expanded across the country, but it hasn't been easy. Independent agents sometimes removed ForSaleByOwner.com's signs from front yards. And organized agents groups pushed legislation requiring online listing services to get a real-estate agents license. ForSaleByOwner.com sued to overturn a California law and won in 2004. "We were out of business in the largest state in the union for about a year," Sambrotto says.
More success has come recently, with Sambrotto's firm making a deal to have a sign, listing, and CD-ROM tutorial package on sale at all Home Depot stores. And the company is branching out, with mortgage loans and foreclosures now a part of its overall Web strategy. "I am amazed at the transformative power of networked intelligence," Sambrotto says.
This story appears in the April 24, 2006 print edition of U.S. News & World Report.