The seller as salesperson FSBO: Doing a "For Sale By Owner" transaction may save the seller money, but even those who succeed say it's harder than it looks.

November 29, 1998|By Brenda J. Buote | Brenda J. Buote,SUN STAFF

After watching friends sell their house on their own, John and Janet Selway decided that they could do the same and jumped into the market without using a real estate agent.

The couple put an advertisement in the newspaper and planted a "For Sale" sign in the front yard. And then they waited.

One month passed.

Another month went by.

Then, it was 90 days.

Finally, after four months they found a buyer.

Each year, about 15 percent of the 4.5 million people who put their homes on the market try to complete the transaction without an agent. Like the Selways, they often discover the process takes a lot of hard work.

"It takes a lot of time and dedication," Selway said. "Be prepared to give up your weekends, every weekend, for as long as your house is on the market."

On average, it takes about five to six months to sell a home in the Baltimore area, according to statistics compiled by Metropolitan Regional Information Systems Inc., the multiple-listing service for Realtors. The Selways held an open house almost every week for 16 weeks before getting a contract in January.

And the price they got for their two-story Colonial in Idlewylde?

L "Let's just say we got what we asked for," John Selway said.

As the real estate market enjoys one of its most robust years in memory, sales like the Selways' are causing some sellers to question the need for an agent. Some homebuyers prefer to take on the burden of selling their home -- becoming a "FSBO," an acronym for "For Sale by Owner" -- rather than pay a real estate agent the traditional 6 percent or 7 percent commission.

On a $200,000 house, that's a savings of $14,000.

Sounds like a good cost-saving strategy, especially for those who can't afford to pay an agent, have little equity in their home or haven't seen it appreciate greatly.

But remember that sellers such as Selway and experts in the real estate business -- and not just the agents and brokers, who have sales commissions at stake -- say selling a house involves a lot more than a sign in the yard and a few well-placed ads.

You must also be prepared to do your homework. "Selling a home isn't just a matter of putting an ad in the paper and boom, it's gone. It does take work," said Bruce Hahn, president of the American Homeowners Foundation, a national nonprofit consumer group in Arlington, Va.

"What you need to do, to get the price you deserve, is a lot of research," he said. "You've got to figure out the right price for your home and then develop a good marketing plan. Most importantly, you must have a bent for negotiating."

That might mean reading a book or calling friends in the real estate business for tips -- and then taking their advice. It also helps to have a relative in the real estate business. Selway's father is a builder who offered his son "lots of good advice," Selway said.

It takes a lot of work to sell a house. If you're a double-income family, or if you've got a lot of other responsibilities, "you may want to think twice," Hahn said, or at the very least, consider other alternatives.

Several real estate agents offer a smorgasbord of options, from basic consulting services to incentive programs that allow homeowners to forgo paying their sales agent a commission if they use the same agent to buy their new home.

In Severna Park, Dave McCollough has operated a Help-U-Sell franchise since 1992 and says his business has grown 60 percent through the years. McCollough said Help-U-Sell is a "full and complete service" that is based on a fee for services.

Owner shows property

"The only distinction is that the owner shows the property," said McCollough, a member of the National Association of Realtors. Although fees vary from franchise to franchise, McCollough said he charges anywhere from 1 percent to 6 percent of the sales price.

"The more choices we give the seller, the better they like it," he said.

However, the professionals say hiring an agent may be a good idea, especially if your home is in the upper price ranges.

"People who are in the market for a $600,000 house don't want to deal with amateurs," said Nathalie Mullinix, president of Realty Universal Inc. in Owings Mills, a non-traditional real estate firm that helps people sell their homes with -- or without -- an agent.

"In high-end transactions, a FSBO can really be hurt because the buyers may be the better negotiators," said Mullinix, who has been in the business 13 years. "That's where a good agent can help you."

About 675,000 people sold their homes without an agent last year, according to the National Association of Realtors. "For Sale by Owner" transactions have remained constant for the past decade, accounting for 13 percent to 16 percent of the market, said Jeff Lubar, the association's spokesman.

"But of the number that do sell on their own, more than half say they wouldn't do it that way again -- that the hassle just wasn't worth it," Lubar said.

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