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Just because it's not `for sale' doesn't mean you can't offer

September 03, 2006|Gayle Pollard-Terry | Times Staff Writer

Every so often, Payam Zamani receives a letter from a real estate agent who has a buyer interested in his two-story Mediterranean home in a San Francisco suburb.

There is no "For Sale" sign in front of his four-bedroom, four-bath, mountain-view home. But he just might part with it for the right amount.

"My wife and I love the home. We love the view," Zamani said. "But we think, 'Wouldn't it be great to get another house like this with the kids' bedrooms closer to the master bedroom?'

"We're not actively listed, but if we got an offer and could sell it immediately," he said, he would be tempted.

How many people who fall in love with a house that is not on the market are willing to make an unsolicited offer? Zamani is betting that thousands will.

His website, Reply.com, launched a new service Aug. 23 that allows consumers to make a bid on just about any house in the United States.

The site won't sell the names of buyers who use the new feature to its network of 15,000 real estate agents, according to Zamani, although Reply.com makes money by generating leads.

"As a consumer, you do your research on our website, and you select the homes that you are interested in making an offer on," said Zamani, who is the founder, chairman and chief executive of the Walnut Park, Calif.-based company. The data provided by the site -- ranging from valuation to square footage to past sales history -- are based on public information.

"You select one or as many as you like," he said. If a prospective buyer is unsure of how much to offer, he or she can indicate a price range.

"At some level, this is a game of numbers. If you truly want to buy a house, the chances are in the ZIP Code that you are interested in, out of thousands of homes there are 20 homes that meet your specs," Zamani said. "You send offers to 20 homeowners, engage with four or five homeowners and you will essentially find a home."

For $24.95, the website will send the offer by Priority Mail to the homeowner. (There is a volume discount after the first nine offers.)

The owner can respond on the site, using a special code that will allow the prospective buyer to retrieve the information.

Of course, that homeowner could ignore the offer, but Zamani believes 20% to 25% will respond one way or the other.

That's much more optimistic than the 5% rate of response predicted by another Internet entrepreneur, Glenn Kelman.

His site, Redfin.com, plans to offer a similar service by the end of the year to its current markets -- Seattle and San Francisco -- and possibly all of California.

The "First-to-Know" feature will allow consumers to bid on unlisted properties, and like Reply.com, Redfin.com will send those offers by Priority Mail for an as-yet-undetermined fee, said Kelman, president and chief executive of Seattle-based Redfin Corp.

The online brokerage allows consumers to find, buy and sell homes on the Web. It makes money from commissions and refers users to in-house real estate agents who handle the details of the deal. It does not generate leads for money.

First-to-Know also will build in some safeguards.

"We are going to make sure the person is pre-approved, and do a basic criminal check to make sure the person hasn't got a history of nefarious dealings.

"Having gathered all that information, we will provide a profile of this person in a letter, and the homeowner can decide if he or she wants to meet the potential buyer," Kelman said. "People have legitimate questions about inviting a stranger into your home."

With today's market flooded with houses that offer plenty of choices to prospective buyers, Kelman expects two types of buyers to use First-to-Know:

"An investor may feel an entire neighborhood is gentrifying and may want to take a block," he said. And "a dream-home buyer -- somebody who says, 'I've always wanted that house. It's very beautiful. If you decide to sell it, please tell me first.' "

Homeowners may respond to an unsolicited inquiry for a number of reasons. Until an offer arrives, they may not know that they could get $1 million for a house that cost $27,000 decades ago, because they haven't paid attention to the housing market.

Others already are contemplating selling because they want to cash out, trade up, get more space, live near better schools, downsize, relocate for a new job or retire.

Still others may fear that prices are about to drop and that they are about to lose some of the equity they have acquired during the spectacular run-up in value over the last five years.

"Essentially, if we know how much money we can currently gain from an asset, we are more likely to sell it.... People fear regretting 'holding on too long' and riding the price back down," said Dr. Richard L. Peterson, a psychiatrist who is the managing partner of San Francisco-based Market Psychology Consulting. "Psychologically, the pain of a potential loss is twice as large as the pleasure from a gain."

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