For sale by owner: Local agents weigh in on the debate

Every day, upward of 50 Boise-area homeowners list their homes as “for sale by owner” on Craigslist. ForSaleByOwner.com currently hosts about 200 Idaho properties, and the local monthly publication Property by Owner exhibits more than 100.

Homeowners write their enthusiastic spiels and upload enticing photos of their homes, all in hopes of luring a buyer without the help of a middleman and his or her pesky commission. And in a market as deflated as the current housing market is, squeezing those extra dollars out of a sale is all the more desirable. But the debate over which way is the best to go is far from over.

A recent incarnation of that debate on U.S. News & World Report’s Web site pitted a real estate agent against a ForSaleByOwner.com executive, letting readers decide whether or not an agent was necessary to buy or sell a home. Readers weighed in 66 to 34 percent in favor of ForSaleByOwner.com vice president Greg Healy, proving only that consumers want to believe a profession that earned $55 billion in commissions in 2007 is on its way out.

“The Internet provides the resources and promotional power consumers need to sell their homes themselves,” Healy stated subsequently. “Studies by two of our nation’s most prestigious universities concluded that ‘for sale by owner’ consumers get more money for their home than sellers who used agents.”

The studies he mentioned include one done by Northwestern University last summer, which showed sellers in Madison, Wisc., who used an agent and sellers in the same market who didn’t sold their homes for about the same price. And the seller who did not have to pay the agent’s commission ended up with more money.

Real estate agents tend to argue that the waters of real estate transactions are too deep and too complex for the average person to navigate without the assistance of a trained professional who conquers these waters daily.

Ada County Association of Realtors president elect Russ Dane, a broker with Keller Williams in Boise, said one problem for un-aided sellers is dealing with lenders and appraisers.

“Lenders are different animals,” Dane said. “It gets very involved. You have to make them feel comfortable with values, you have to be able to support and debate and defend the value. You have to keep that thing together until closing. Part of that is the appraisal; that’s a big hurdle to get through these days. … Most sellers are not sophisticated enough to understand all the repercussions and ramifications.”

And some agents representing buyers would rather not deal with that lack of sophistication.

“It’s just easier for me as a real estate agent and simpler for me to search the MLS and give my buyer all of these great choices and not have to fight through the worry and all that of ‘am I for sure going to get paid?’” said broker Todd McCauley of Eagle Rock Properties in Eagle. “It’s a lot more secure for the agent to know their property is listed on MLS, and it’s already printed right on the MLS sheet what their commission is going to be, and they don’t have to go in and negotiate, on top of negotiating the price, what their commission will be. … There’s a lot of inertia that says, ‘let’s try and find something on the MLS if we can.’”

McCauley added that buyers generally don’t have any reason to come into a transaction without a real estate agent, meaning sellers are going to have to pay the buyer’s broker’s fee if they don’t want to cut the majority of prospective buyers out of consideration.

Homeowner Vicki Fisk is selling her Boise home without a real estate agent, but she said she is happy to offer 3 percent of the selling price to an agent who brings a buyer. And she said her selling price reflects the expectation of avoiding at least half of the commission.

With the sign in front of her house and an ad on Craigslist, Fisk said she gets two to three calls a week from prospective buyers, and more than that from agents trying to woo her to their services. But she says she’s going to hold out as she waits for the perfect buyer to come along.

“I think a Realtor definitely has the background and the knowledge to put together contracts, to submit to the title company, they do a lot of the footwork and the telephone calls, they help arrange inspections and stuff like that, but mainly they’re the voice between the buyer and the seller so the buyer and seller never have to meet,” she said. “But I’m a people person and I like that relationship. There are people who are uncomfortable with that for whatever reason, so a Realtor takes that away, that fear, that discomfort of dealing with the buyer or seller.”

She added that people are often afraid to dive into a process they know little about.

“I’m kind of an entrepreneur in my mind; I don’t let something stop me until I find out I can’t do it or I don’t have the knowledge to do it,” she said.
She said she’d gone through a few other similar transactions without realtors, which made her feel comfortable attempting it alone again this time.

“You just hand everything over to the title company, and the title company does all the work for you,” she said.

For others, the unfamiliar process is a little too daunting. First-time homeowner Sarita Rogers and her husband recently bought a house in Boise, and she said she wouldn’t have known exactly what to do without a real estate agent.

“I don’t think I would recommend any first-time home buyer to buy without a Realtor, or at least a lot of help from someone who knows a lot about the process,” she said. “When we do sell our house, we’ll probably get a Realtor. It might save a little money to not have one, but in this case, as with some other professional services, I’d rather pay a professional to do it right than pay myself to deal with the stress and try to figure out what to do. Maybe after we bought and sold several houses, we might feel comfortable doing it ourselves.”