Raise your hand if you've heard this one before

"We are creating an alternative to the MLS because we think there needs to be a new model, and because we thought you should be able to list for free. We don't walk both sides of the fence. There are hybrids and discounters, but we are a fresh start. We wiped the slate clean and started a 2nd national database - only this time it's free and intended for the by-owner community."

That's from the "About Us" page of a new online service called Choice A, which as you might have guessed is taking aim at the real estate industry, hoping to circumvent the MLS and give consumers the option to buy and sell real estate without paying broker commission fees.

True, consumers deserve choice. But to declare this is something new shows a lack of research into the current market. There are dozens of national for-sale-by-owner Web sites out there, including ForSaleByOwner.com, Owners.com, ByOwner.com, and at least one brokerage model has lived outside the MLS for decades (Assist2Sell).

Many of these FSBO sites were created in the late '90s, which means they haven't really lived through a downturn, similar to many real estate agents who until recently had only worked in booming housing markets.

What happens to the FSBO market during a downturn? Two possibilities are arguable: 1) it grows larger because more owners are getting stuck with less equity and in some cases it's not enough to even cover the costs of using an agent; and 2) it becomes moot in many areas where sellers are willing to pay top dollar to have someone working night and day to sell their home at the best price as fast as possible.

Unfortunately, there's not a lot of data to support either hypothesis.

With the way things are currently going, it wouldn't be surprising that many owners who bought with no money down and need to get out would need a commission-free alternative. But will it result in a deal fast enough to keep them from foreclosing?

Would love to hear what's happening in readers' markets. Drop us a comment here.

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