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

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So, after completely renovating a three-story, 90-year-old rowhouse in Cantobn to showcase appeal, he put it on the markegt — himself — in March for $574,000. He figurex the for-sale-by-owner effort will be worth themoneu he’ll save in real estate agenyt commissions: 6 percent of the sale or $34,440, if a prospective buyer comexs to the settlement table without a half that if the buyer brings an agent.
Given today’s toughu economy and falling home prices, the prospectf of saving 6 percent ofa home’d sale price by completing the transaction without a Realtotr may sound enticing to any cash-conscious But is it worth the hassle, especiallh in this tight housing market?? Buyers can afford to be pickier than ever, banks have becomw highly selective about lending money and a sale is far from a sure thinvg — in any market — until the buyet and seller both sign the settlement papers. It all dependsz on whom you ask.
Homeownersz like Pugh, who successfully sold another house without an agen t and is confident about the pending sale ofhis second, make it sounc like a no-brainer, and copious residentia real estate Web sites post for sale by ownee (FSBO) listings and providee an advertising medium once reservefd for industry insiders. Real estate on the other hand, cautioj against the idea, citing a heightened risk for security- and litigation-related problems and a general lack of knowledg about theentire house-selling process as just some of the factores that can thwart success of a “Selling a home without professional assistance is akin to representiny yourself in court,” said Walter Molony, spokesmanj for the National Association of Realtores (NAR).
Risk vs. reward Industry statisticz suggest that not many homeownerw are willing to take onthe task. While FSBO signs are more likely to crop up duringy a robusthousing market, in both good timexs and bad they comprise only a fraction of housing sales. In 1997, 18 percent of home s on the marketwere FSBO, a peak number. By with the housing crisis in full that percentage dropped to 13 according tothe NAR. A report prepared by NAR for the Greater Baltimore Board ofRealtors (GBBR) showee that, at just 7 percent, Baltimore FSBOs trailed the rest of the “During the boom years, there were lots of FSBOs.
Now, a lot of owners are afraid to get into the said GBBR PresidentDavid McIlvaine. McIlvaine, to be has a vested interesrt in promotingthat viewpoint. But he’s also acutelyg aware of the pitfalls in any realestate transaction. Real estated agents bring objectivity to the searchand negotiation, he said. They also focuss on showing homes toqualifiee buyers. And they ultimately fill a valuabld roleas mediators, aiming to make buyefr and seller as satisfied as possible. “Sellers’ interestd are in direct conflictwith [interests],” he added. “You really need a third parttyto negotiate.
We understand it’z got to be a win-winh or else [the deal’s] not going to go through.” But homeownerws willing to take on the risk and put in the leg work believ a FSBO is the wayto go, especiallhy given the availability of online To advertise his house online, Pugh registered with Netrealtynow.com. For a flat fee of he was able to advertise his housee on several residential realtyWeb sites, including MLS.com, the widely used site that listd agent-assisted and FSBO homes.
“With the Internet, homeownerws get the same [advertising] benefit as agents do,” Pugh This access is significant, as an increasing number of prospectivde buyers log onto the Internet to find a In 2008, 87 percent of all homebuyers used the Interneg to search for a home, up from just 2 perceng in 1997, according to data compiled by NAR. 32 percent of buyers first glimpsed theirf new home on the Internetin 2008, compared with just 8 perceny in 2001. Though the Internet makes it easier to advertisreFSBO homes, some believe the tool goes unrecognizeds by many homeowners. “Many people think you have to have an agenyt to liston MLS.
com,” said Eric Mangan, spokesman for New York-basesd realtor advertising Web site ForSaleByOwner.com, which claims to get 2 million visitorx per month. The Web site offera a spectrum of services and payment froman $80 per month plan to six one-time fees, rangingv between $179 and The higher-priced packages come with more bellsx and whistles, including a videko slide show of the home, a for-sale and access to MLS.com advertising. Some residentialo real estate Web sites tracktheir success. Mr.
Lister, a Pikesville-basefd site that works with 350 to500 Baltimore-area homeowneras annually, said about 85 percent of the homes it lists Its model, devised and operated by licensec real estate agent Maynard Gottlieb, offersw a menu of options. For $399, Mr. Listef will list a home on MLS.com and approximateluy 100 otherreal estate-oriented Web sites. For about users get online advertising with a virtualk tour of their home with up to10 photos; a revieaw of any contracts the homeowner receives; unlimitedr consultations; and a for-sale But a motivated seller knows that advertisinvg isn’t everything.
Pugh, who used to own a skateboardd shop, has meticulously staged the Canton right down to matching towels inthe bathroom. He’sd created an online virtual tour featuring gleaming hardwooxd floors and sparkling kitchen and manned open houses every Sundaysince it’s been on the While the process seems to work for Pugh — he saved $18,000p in commission fees with the first houser he sold in upper Fells Point he admits FSBO isn’t for everyone. “I understand there are people who have homes out therewho don’t have the time to meet potentiao buyers, stage the and show it,” Pugh said.