By Laura Baverman
The Cincinnati Enquirer

Larry Whited has developed what may be the nation's first entirely Web-based real estate brokerage that has no home office. (Michael Snyder photo) | ZOOM |

When John McLaughlin put his Blue Ash home on the market on a Friday afternoon in July, he was amazed it sold 24 hours later.

He was also amazed that the sale could be made solely using technology - by e-mailing, faxing and phoning.

He also paid a relatively low commission to broker Larry Whited - 4 percent plus $500, compared to the usual rate of 6 percent to 7 percent in most real estate deals. (There also are 3 percent and 5 percent plans, depending on the level of service.)

Whited can afford these low commission rates because he doesn't need to pay the overhead of a real estate office. He runs his business, WebMLS.net, entirely via a company Web site, e-mail, a cell phone and fax. Since the November 2002 start of the company, Whited has grown from one agent to 18. He expects to reach 20 by the end of this month and 50 by the end of this year.

His real estate company is the only known one in the country to have eliminated the real estate office, the National Association of Realtors magazine reports.

HOW WEBMLS WORKS

Agents traditionally drop off commission checks to their home office. WebMLS eliminates this by giving each agent a box of deposit slips so they can deposit the checks directly into the company checking account. When the deposit appears on the bank Web site and Whited has received the file, he transfers the commission to the agent's "Commission Only Savings Account." Whited uses a WebFax system to turn incoming faxes into PDF files. That way, he can store the files on CD-ROM and eliminate the need for filing cabinets and storage space. Eliminating the office has given Whited the ability to hire agents without increasing overhead. Agents are responsible for their own equipment and desk space because they are independent contractors. PDF files can be e-mailed to clients to review and sign, then faxed back to WebMLS once completed. If negotiations are needed, the files can be e-mailed back and forth. This also gives the clients time to discuss an offer without an agent sitting in the room with them. Whited hires only agents with experience. He does not have time or facilities to train new agents. They are responsible for learning and knowing Whited's system.

Before he became a licensed real estate agent in 1972, Whited worked as a systems analyst, programming computers. Once he started in real estate, he realized the potential that computers and the Internet could play in the business.

"The biggest benefit of the Internet is reducing cost," he said.

He's pushed for lower commissions since he started. Now he has a realistic way of doing it.

"There is a price war in commissions right now. The consumer is demanding better value. Traditional companies cannot respond to that because they have huge overhead called real estate offices," he said.

"People like me are going to come to the front with a new business model that eliminates the largest expense and the most useless component of real estate sales."

Whited's agents, all independent contractors, work at their own pace and out of their homes. When they receive a commission check, they make deposits to the company account on their own. When they need to deliver a signed contract, they merely fax it to Whited's WebFax program, where the document is converted to a PDF file. This allows Whited to save all the files on compact discs and eliminate space required for filing paperwork.

"I tell everyone when I hire them, 'I'm not a day care, I'm not a rest home, I'm not a cheerleader.' You have to be self-motivated to join my company," he said.

Agents like this philosophy because it gives them flexibility in their work schedules and their negotiations.

"I like the concept of being able to add more black ink to my bottom line and to be able to provide a good-quality service to the consumer at a lower rate," agent Sherry Guess said. "It is kind of a win-win situation, and it has allowed me to gain more business."

She has 14 years of experience in real estate and joined the company from Re/Max in January. She says she has more time to spend on her business now because she's not running back and forth between an office and her clients' homes. Transactions are up 30 percent from last year, she said.

Whited expects his agents to sell 1,000 homes in 2003. He will sell 100 homes, up from 50 in years past, he said.

Jim Abele, manager of Multiple Listings Inc., said he doesn't see the traditional model going away, but acknowledges that Whited's concept is innovative and has the ability to change the industry.

"Larry has just got a unique marketing position, and I think time will tell. If he's right and it takes off, you may see other companies doing similar stuff," he said.

By the end of the year, Whited will provide licensing services in which Realtors can use his business model for a fee. The service is like a franchise but less controlling, he said.

He also hopes to take advantage of wireless Internet service.

"A couple years from now, I can run this company from a wireless laptop anywhere in the country," he said. "I hope to be able to spend that summer on the beach."

E-mail lbaverman@enquirer.com