You’re the boss, so get to work
Nancy Appleton sold her home “for sale by owner” 17 years ago by deploying her teenage children to distribute fliers outside a competing open house.
“That’s actually how I sold it,” said Appleton, who lives in Santa Monica.
And so it was without trepidation that Appleton gave the “by-owner” approach a second try in June as she endeavored to sell her Santa Monica condominium for $1.05 million, an effort with the potential to save her as much as $63,000 in sales commissions.
Saving money is the big appeal for many who choose to sell a home as a “fizzbo” -- the colloquial pronunciation of the acronym FSBO, meaning “for sale by owner.” But this is not like clipping coupons. George Devine, a California broker and author of “For Sale by Owner in California,” doesn’t think of FSBOs as saving a commission. Instead, he said, they’re “earning it.”
For owners flying without an agent, that means doing mountains of research, purchasing effective advertisements and baby-sitting those weekend open houses, an activity that should also include the assistance of at least one other person as a safety precaution.
Determining exactly how many homeowners sell using this method can be a difficult, as the parties that track such numbers have a stake in the answer.
One recent study released by the National Assn. of Realtors purports that by-owner sellers represented a record low 13% share of the market last year.
Yet there is no shortage of websites that provide services to people selling their own homes, including EBay and CraigsList.org. Others, such as Socrates.com, sell the contracts and forms necessary to complete a sale. ForSaleByOwner.com has sought to define itself as a one-stop shop.
ForSaleByOwner.com, purchased this year by Tribune Co., which also owns the Los Angeles Times, said its client base has nearly doubled every year for the last several years. The site logged 24,299 listings in 2003, more than twice that the following year and 108,022 in 2005.
Its chief operating officer, Colby Sambrotto, said the two main concerns sellers should have is properly pricing the property and being ready at a moment’s notice to show it to interested buyers.
That magic number
Proper pricing will depend on how well the seller researched the local market. In addition to using Internet sites that list recent sales data, including the public records made available by the Los Angeles County assessor at assessormap.co.la.ca.us, sellers such as Appleton say it’s important to visit other open houses in the neighborhood to see the prices at which similar homes are being listed.
And sellers should be prepared for naysayers.
Devin Leonard, who’s handling the sale of his four-bedroom home in Newbury Park for $848,000, said many different real estate agents cited the same warnings to him after he put up his home for sale in May. Included in the cautions was a reminder that the failure to use an agent exposes the seller to future lawsuits.
But author Devine, who is also an adjunct professor in the School of Business and Management at the University of San Francisco, said he thinks such fears aren’t realistic. There are ways buyers can minimize the possibility of getting sued, such as by disclosing any issues the property might have.
“You can never completely protect yourself against being sued,” he said, “and that’s true of all the transactions involving real estate.”
Those who have waded into the market on their own say owners intent on following in their footsteps should expect to hear from legions of agents trying to convert them to commission-paying sellers.
Maria Lesseos, an investor who always worked with agents in the past, decided to try going solo with her residence. During the first three weeks that her four-bedroom home in Fullerton was advertised at $1.3 million, she received 30 to 40 calls from agents.
One man called repeatedly and used different names, Lesseos said, even though he had a distinctive voice and accent. He called to inquire about listing the property, about providing financing for buyers and then showed up at her door peddling appraisal services, she said.
After a month, the appeal of saving a 6% commission of $65,000 waned and Lesseos listed with an agent: “It’s worth my sanity and my ulcers to have someone else deal with it.”
Sandra Costa, an interior designer in Los Angeles, came to a similar conclusion after going it alone in January on a three-bedroom home in Woodland Hills priced at $779,000. She lugged half a dozen large signs around each weekend, baked cookies to make sure the home smelled inviting and even lighted candles.
“I put a lot of time and effort into going back and forth,” said Costa, whose residence in Los Angeles is a 40-mile round-trip from Woodland Hills. “After eight weeks of arriving every Saturday and Sunday morning ... I still didn’t have the expertise in how to close a lead. And then, I would lose them.”
Having the right tools of the trade can be another stumbling block. Some purchase a key box, a small combination-lock container that retails for about $30. It can be helpful to share the combination with a prospective buyer on those occasions when the seller is unable to show the home, but it’s only advisable in situations where the home is completely empty of belongings, and after the buyers have submitted identification and proof of preapproval for a home loan.
Key or lock boxes can also be helpful when coupled with an advertisement on the local Multiple Listing Service, which is accessed by real estate agents representing buyers. Some sellers might feel more comfortable sharing the key-box combination with an agent.
But getting an effective MLS listing can be tricky. Access to the MLS is limited to its member agents and brokers, so sellers wishing to list their property on the local service have to purchase a listing from a member, or a service with whom a member has contracted.
Making it into the MLS
Prices and the type of listing can vary, said Leslie Young, a broker and owner of E-ListState.com, a Volcano, Calif.-based company that sells local MLS listings statewide.
Young, for example, sells a package for $249 that includes a six-month listing on the local MLS and on Realtor.com. Other companies sell bundles of similar services for $700 or more.
But the member agent who will be entering the listing will be the contact for the property, so the seller will be dependent upon that agent to forward calls and e-mails in a timely manner.
An MLS listing generally involves paying some commission, if the listing has a prayer. Offering nothing gets an ad effectively ostracized by agents, Young said. “You’d be ignored.”
Whatever choice sellers make with regard to marketing, Devine said they must be patient. Agent or not, the quick sales of the last few years are no longer the norm.
In Appleton’s case, since her summer plans also included a visit to Mongolia, she was prepared to list with an agent if a buyer didn’t materialize within four weeks. And she enlisted the help of a friend who distributed fliers at competing open houses, just as her children had done 17 years ago.
From the first day her house was for sale, Appleton contended she was its most qualified saleswoman. Who else would know to point out the handmade Mexican tiles in the kitchen, the glass block in the bathroom or the rounded interior corners throughout her spacious 1,750-square-foot condo?
“I just feel I can do it better than anybody else can,” she said.
Appleton sold her home to a buyer who walked through during the second Sunday open house. He paid cash for a bit less than her asking price. Escrow lasted 12 days and closed on the day she left for Mongolia.
“Isn’t that the perfect fairy-tale story?” she said. “I’m glad it had a happy ending.”
T.J. Sullivan’s e-mail is email@example.com.