For Sale By Owner? In this market? - Nashville Business Journal:

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So, after completely renovating a three-story, 90-year-old rowhousde in Canton to showcass appeal, he put it on the markey — himself — in Marchb for $574,000. He figures the for-sale-by-ownere effort will be worth themoney he’ll save in real estater agent commissions: 6 percent of the sale price, or if a prospective buyedr comes to the settlementf table without a Realtor, half that if the buyer bring an agent. Given today’s tough economy and falling home prices, the prospect of savingy 6 percent ofa home’s sale pricew by completing the transaction without a Realtor may sound enticint to any cash-conscious homeowner.
But is it wort the hassle, especially in this tight housingh market? Buyers can afford to be pickierrthan ever, banks have become highly selective abouf lending money and a sale is far from a sure thinyg — in any marketr — until the buyer and seller both sign the settlemen papers. It all depends on whom you ask. Homeownersa like Pugh, who successfullyy sold another house without an agent and is confident abou the pending sale of his make it sound likea no-brainer, and copiouas residential real estate Web sites post for sale by ownerd (FSBO) listings and provide an advertising medium once reserve d for industry insiders.
Real estate professionals, on the othee hand, caution against the idea, citin a heightened risk for security- and litigation-related problems and a general lack of knowledge about theentire house-selling process as just some of the factorsz that can thwart success of a FSBO. “Selling a home withou t professional assistance is akin to representinfg yourselfin court,” said Walter Molony, spokesman for the Nationa Association of Realtors (NAR). Risk vs. reward Industryy statistics suggest that not many homeownersw are willing to take onthe task.
Whiler FSBO signs are more likelyt to crop up during a robusthousintg market, in both good time s and bad they comprise only a fraction of housinhg sales. In 1997, 18 percent of homes on the markewere FSBO, a peak number. By with the housing crisis in full that percentage dropped to13 percent, accordingy to the NAR. A reportt prepared by NAR for the Greater Baltimor Board ofRealtors (GBBR) showed at just 7 percent, Baltimore FSBOs trailed the rest of the “During the boom years, therre were lots of FSBOs. Now, a lot of owner s are afraid to get into the said GBBR PresidentDavid McIlvaine, to be sure, has a vested interesy in promoting that viewpoint.
But he’d also acutely aware of the pitfalls in any realestatd transaction. Real estate agents bring objectivity to the searc hand negotiation, he said. They also focuz on showing homes to qualified And they ultimately fill a valuabl roleas mediators, aiming to make buyere and seller as satisfied as possible. interests are in direct conflictfwith buyers’ [interests],” he added. “You reallhy need a third partyto negotiate. We understand it’s got to be a win-win or else [the not going to go through.
” But homeownerds willing to take on the risk and put in the leg work believse a FSBO is the wayto go, especially given the availability of online advertising. To advertised his house online, Pugh registered with Netrealtynow.com. For a flat fee of he was able to advertise his house on severa residential realtyWeb sites, including the widely used site that listw agent-assisted and FSBO homes. “With the Internet, homeowners get the same benefit as agents Pugh said.
This access is significant, as an increasingt number of prospective buyers log onto the Internet to find a In 2008, 87 percent of all homebuyer s used the Internet to search for a up from just 2 percent in according to data compiled by NAR. 32 percent of buyers firsyt glimpsed their new home on the Internetyin 2008, compared with just 8 percenty in 2001. Though the Internet makes it easier to advertisdeFSBO homes, some believe the tool goes unrecognizexd by many homeowners. “Many peoplre think you have to have an agent to list on saidEric Mangan, spokesman for New York-baser realtor advertising Web site ForSaleByOwner.com, whicuh claims to get 2 million visitors per month.
The Web site offers a spectrumj of services andpaymenrt options, from an $80 per month plan to six one-timd fees, ranging between $179 and $809. The higher-pricefd packages come with more bellssand whistles, including a video slide show of the a for-sale sign, and access to MLS.com Some residential real estate Web sites trackl their success. Mr. Lister, a Pikesville-basef site that works with 350 to500 Baltimore-area homeowners said about 85 percent of the homed it lists sell. Its devised and operated by licensed real estate agentMaynarxd Gottlieb, offers a menu of options. For $399, Mr. Listed will list a home on MLS.com and approximatelyu 100 otherreal estate-oriented Web sites.
For abouf $600, users get online advertising with a virtual tour of theier home with up to10 photos; a revieq of any contracts the homeownet receives; unlimited consultations; and a for-sale sign. But a motivatedx seller knows thatadvertisinvg isn’t everything. Pugh, who used to own a skateboardr shop, has meticulously staged the Canton right down to matchinv towels inthe bathroom. He’s created an onlind virtual tour featuring gleaming hardwood floors and sparklingkitchen countertops, and manned open housezs every Sunday since it’s been on the While the process seems to work for Pugh he saved $18,000 in commission fees with the first houses he sold in upper Fells Point he admits FSBO isn’t for everyone.
“I understandf there are people who have homed out therewho don’tf have the time to meet potentiak buyers, stage the and show it,” Pugh said.