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Press Coverage

What you should know about selling on your own  

July 15, 2011


Real estate journalists from around the country sat in last month on a friendly-rivals debate between two real estate industry veterans and a for-sale-by-owner advocate.

On one side were Dwight Hale, chairman of the Texas Association of Realtors, and Michael Crowley, a broker from Spokane, Wash., and president of the National Association of Exclusive Buyer Agents. On the other sat Eddie Tyner, general manager of ForSaleByOwner.com (a unit of Tribune Co., parent of the Chicago Tribune).

Tyner told attendees at the conference of the National Association of Real Estate Editors in San Antonio that the by-owner strategy can be very successful but cautioned that it's not for everyone.

"(The selling process) is a lot of work; we tell them that," Tyner said. Nonetheless, technology has empowered consumers to do the research and marketing chores needed to sell a house, he said.

Tyner reeled off a list of characteristics that ForSaleByOwner.com regards as the ideal candidate for selling by owner. That would be someone who:

  • Has enough Internet savvy for pricing and other research and marketing.
  • Has realistic expectations about how long the process might take.
  • Can find a qualified appraiser to help determine an asking price and an attorney to cover the legal aspects.
  • Has a realistic view of changes and updates to the house that might be needed to make it appeal to the broadest pool of buyers and is willing to call in a professional stager if needed.
  • Isn't so emotionally tied to the house that he or she can't approach the sale with a businesslike attitude.
  • Knows when problems have made the process too complex and it's time to call in a pro.

But Hale said the problem with such a list is that "you don't know what you don't know — experience has a payback."

Real estate transactions can be full of sticking points — some of them unforeseeable, especially for someone who hasn't had a lot of experience with the home-selling process, Hale said. They can seem minor but be deal-busters nonetheless, he said.

"For example, if you don't know that, say, Veterans Administration loans require that a house have window screens, and the seller, says no, I won't pay to install them (to make the sale go through), you're done," he said.

Further, he said, the hardest part in many sales today is not finding a buyer, but making sure the buyer's financing doesn't fall apart.

"The No. 1 difference out there that all Realtors are experiencing these days is the mortgage morass we're in," he said. "The challenge is getting the buyer through the lending process," and, he said, professional real estate agents have the skills to help resolve these issues.

"If you only sell one home every five, seven, or 10 years, there are going to be problems, and we solve problems," Crowley said.

"For instance, if you need to get the furnace repaired (to get the house sold), an agent might get you to the right contractor, which might make a difference of thousands of dollars."

But Tyner said the two most important tasks are getting the price right and getting the right marketing mix.

"There are enough technology tools out there that they can do it on their own," he said.

"There's a lot of work to it, yes, we tell them that. But if people are willing to put forth the time and effort, they have a good chance of success."

housingnews@comcast.net

Copyright © 2011, Chicago Tribune
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Cut The Middleman  

By Morgan Brennan

Over the last 20 years Barbara Marquardt has sold five homes without paying a dime in commission to a real estate agent. Her latest "for sale by owner" triumph was in October, when her five-bedroom, 3.5- bathroom colonial in the upscale town of Basking Ridge, N.J. fetched $785,000 after five months on the market. She and her husband bought the house for $685,000 in 2003 and spent $25,000 fixing it up over the years. Marquardt figures FSBO added $30,000 to their net profits from the house.

At a time when many home sellers are looking at slim gains or even losses, agents' commissions have actually been rising--from an average of 5% in 2005 to 5.4% last year, according to Denver-based Real Trends.

So should you try selling your home yourself? That depends. The proliferation of Internet real estate sites makes it more feasible, but the reason Realtors have been demanding a bigger cut is that selling a house in this weak market takes a lot more work.
In Pictures: Tips For Selling Your House Yourself

"Selling a house is not easy, and we don't tell people it is," says Eddie Tyner, vice president of classified marketplaces for Tribune Interactive, which owns ForSaleByOwner.com. "But if you're willing to put in the time and do the research, it's something anyone can do," he adds.

Maybe. But sell-it-yourselfers are still a small minority. According to the National Association of Realtors, FSBO homes made up only around 5% of completed sales in 2010, not counting the 4% of deals between family members and other acquainted parties.

Here are some points to consider.

THE RIGHT PROPERTY

If you're trying to unload that $70,000 vacation cottage that your uncle willed you, and it's two hours away, hire an agent. Your savings from selling it yourself won't be worth the effort. At the other extreme, if you've got a $3 million mansion to move, your upscale target clientele probably isn't going to want to dicker with you directly. Get a Realtor-- preferably one who drives a Lexus, Cadillac, BMW or Mercedes.

Where the FSBO strategy can work is in the broad middle market, as with Marquardt's property.

TIME AND TEMPERAMENT

Surprisingly, FSBO experts say the biggest barrier for many homeowners to selling a house themselves is emotional. Your home holds priceless memories. Maybe it's where you raised your kids. Are you ready to stow away those family pics contributing to the clutter and bite your tongue when lookers diss the decor?

"The best advice I can give someone is to be unemotional," says Marquardt, who coaches novice FSBOers for free. "You have to look at it as a transaction, or you can't do it," she adds.

Another hurdle is the considerable time it takes to research your home's value, prepare marketing materials and then organize and host open houses on the weekends and showings on the weekdays--possibly for months on end. Think of it as a part-time job.

"Calculate how much money your time is worth and figure out whether it's worth doing it," says Marquardt.

So be honest with yourself about whether you have the temperament, let alone the time, patience and marketing skills to do a bang-up job. You might be ready to put more effort into selling the house than an agent would. But if you're going to skimp on research or marketing, you'll likely end up sacrificing in a lower sale price what you'd save in commissions. Plus, you'll have sacrificed your weekends.

THE PRICE IS RIGHT

Fetching top dollar for your home requires you to do a lot of things well, and a big one is setting the right price. "Pricing is the one thing that people are most concerned about," says Tyner. "Get it right, and you can sell your house quickly and maximize what you get for it."

Fortunately the Internet now abounds with pricing data. ForSaleByOwner.com sells a customized pricing report for $40, which includes both comparable homes on the market now and those that have sold recently. Zillow.com, a leading real estate site, offers recent sales data for free, although it's up to you to decide what's comparable. You can also get a free "Zestimate" of your home's value (take it with a grain of salt) and a sale-to-list-price ratio report that shows the difference between the final sale and asking price for your area. (According to Zillow, the average house in April went for 4% less than the list price, but that varies by market.)

Don't limit research to cyberspace. Visit open houses to assess the competition. You're not going to be able to tell from the Internet whether the competition has, say, a better traffic pattern or more curb appeal.

Consider asking local Realtors for market analyses. Who knows? You might change your mind and end up hiring one. Even Marquardt asked agents to analyze her Basking Ridge home. "They offer the service for free and without any obligation," she explains. "I've never felt guilty about it."

If your homework still leaves you fearful of mispricing your home, consider paying for an appraisal. (It will run you $300 to $500 in most areas.) You might also pay for a home inspection in advance ($400 to $700). The inspection will alert you to any problems that could provide buyers with negotiating leverage or sidetrack a sale. It will also clue you in on legally required property disclosures (these vary by state) about, say, electrical defects or a buried oil tank.
In Pictures: Tips For Selling Your House Yourself

When it comes time to set an asking price, bear in mind that many potential buyers expect an FSBO property to be a bargain, cautions Marquardt. Be at least a tad sympathetic. After all, handling a transaction without a middleman is more work and stress for the buyer as well as the seller.

Do decide in advance whether you plan to cut out Realtors entirely or are willing to pay a commission to a buyer's agent, and factor that decision into your list price. (For more on buyers' agents, keep reading.)

MARKET LIKE MAD

In the home sale market you've got to spend money to make money. So make sure your home is primed to impress. Fix that loose doorknob. Repaint the fire-engine-red kitchen in a neutral color. Rent a storage locker and move your clutter out, including your photos and knickknacks. (That allows visitors to envision themselves living in your home.) Curb appeal matters, too, so be sure to keep the yard in prime condition. Of course, all this is a good idea even if you're using a Realtor--unless you're selling a home "as is."

Since you don't have an agent to do the marketing, you'll also need to budget several hundred to a few thousand dollars for promotional expenses. As you plan your spending, keep in mind that nearly 90% of home hunters begin their search online these days. Zillow.com charges $40 to make your home a "featured listing" for 180 days on its well-trafficked site, with your home sorting to the top of search results. That's a no-brainer.

A harder decision: Do you want to rely solely on potential buyers you drum up yourself or are you willing to pay a commission to a "buyer's agent" who spots your listing and brings a buyer through your door? In many areas you can now pay a limited ser - vice broker a few hundred dollars to enter your home on the Multiple Listing Service (MLS)--the dominant database used by agents in most of the country. But there's no point in doing this unless in the listing you indicate you're willing to pay a buyer's agent commission of 1% to 3% of the sales price.

Instead of finding a limited-service broker to list your home on MLS, you can also buy your way on to it through ForSaleByOwner.com. It sells a variety of marketing packages, ranging from $89 for a one-month listing on its own site to a $689 six-month premium package that includes an MLS listing. The site says you can advertise any commission you want but recommends you offer 2% to 3% to pique brokers interest. (Translation: You may be wasting your dollars on an MLS listing if you're not ready to pay a commission that Realtors won't sneer at.)

In terms of content, take a multimedia approach. Highlight the price, location, number of bedrooms and amenities, like a three-car garage, granite countertops or a finished basement. Then add high-quality photos and possibly a well-produced video tour that show off your property's best features.

Consider advertising in older media, too. A newspaper ad can still drive traffic, particularly if it runs on a day you're holding an open house.

Place professional-looking "for sale" signs in front of your house and (if local ordinances allow) near busy neighborhood intersections. "Signage produced a lot for me," says Marquardt. Buyers may start on the Web, but many still drive around looking.
In Pictures: Tips For Selling Your House Yourself

Note: This story corrects an error published in the first edition. The correct first name of Tribune's vice president of classified marketplaces is Eddie, not Edward, as originally reported.

5 things you must consider before renting out your home  

 

Renting was once a temporary housing situation until one could save money to buy their own home. But, today’s renters are increasingly former homeowners who no longer believe that owning a home is a wise investment. The Fannie Mae Q4 2010 National Housing Survey indicates that 28 percent of renters surveyed believe that renting makes more financial sense than owning a home, up eight points from January 2010. There’s also been a five-point rise since January 2010 in current renters who say they’re more likely to rent for the long-haul.  Survey respondents also expect that rental prices will increase by 2.8 percent, on average, over the next year.

For homeowners unable to sell their property at a reasonable price, renting could be the way to waiting out a lagging housing market. But, becoming a landlord involves far more than handing over the keys and watching the rental checks roll in. Here are five things you must consider before renting your home.

Your Objective

If you are saddled with two mortgages, renting your vacant property may prove more lucrative than letting it sit vacant. But, if you’re renting your property for the income alone, there are many financial factors to weigh.

As a landlord, you are responsible for upkeep of your rental property, which may a property management company. Expect to pay about ten percent of the monthly rent you charge for such services, and remember that in most cases, you are responsible for the costs of repair and maintenance—even if the tenant caused the issue.

Remember that you’ll spend about two percent of the purchase price of your home each year on basic home maintenance. Consider the cost of your monthly mortgage, remembering that expenses associated with renting, mortgage interest and depreciation, are all tax deductible. (However, the IRS considers renting a home a “passive activity,” meaning that losses are limited to $25,000 a year). Decide whether you are willing to “sweeten the deal” by paying any utilities, and consider that you will incur living expenses for your own housing.  Taking all those factors into consideration, establish a base figure that you would need to charge for rent, just to break even.

With that figure in mind, Joanne Cleaver of ForSaleByOwner.com recommends getting a full appraisal by a professional, and requesting that comparable rents be included, not just comparable market values. Third-party verification of the market rents will enable you to hold firm in negotiations, and will prove invaluable when resetting your property insurance to cover the rental.

Your Future Plans

Tax laws around capital gains vary based on amount of time you live in a property before it is sold. Further, rental properties that are sold at a profit may be subject to repayment of any depreciation deductions that you claimed on the property prior to the sale. If you plan to sell the property in the next few years, make sure that you are aware of the tax implications and time limits.

Keep in mind that renting is generally not a wildly profitable business if you’re only in it for the short-term, and that rental income is taxable and must be reported on a 1099-MISC tax form. However, the long-term financial benefits  of renting are the tax breaks, and opportunity to build home equity using someone else’s money

Tenant Laws in Your State

Chantay Bridges of Clear Choice Realty & Associates stresses the importance of understanding tenant laws in your state, especially if you live in one where laws skew in favor of the tenant. She explains that many states deem it illegal to evict a tenant without proper documentation and up to 90 days of notice, even if they have caused damage or failed to pay rent. Further, establish legally binding contractual boundaries to protect yourself against any contents that the renter may take with them after moving, like wall coverings or small appliances. (This becomes especially important if you sell the home, and the buyer purchases it on the condition that all contents are included).

Bridges also points out that some landlord/tenant laws state that once a person has lived in a property for a 12 month period or have utilities turned on in their name, they have established tenancy; it can one to two years to remove their name from the property. Further, if they find ways to illegally secure utilities like cable, you may be liable for damages. Always conduct a credit and criminal background check on prospective tenants, and require a refundable security deposit that will cover damages the tenant may cause

Your Legal Landlord Responsibilites.

Michael Koshet, CEO of Help Me Rent magazine, also advises landlords to understand what services they are legally obligated to provide, to maximize return on investment.  While laws vary by state, Koshet says that landlords are generally not obligated to perform cosmetic repairs that do not impact safe living conditions. Of course, the happier your tenant is, the longer they’re likely to stick around, but knowing your rights can minimize unnecessary expenses. If a demanding tenant seeks new carpeting, landscaping or window coverings, you may not be legally required to comply, as long the current condition does not pose a hazard. Further, tenants are required to replace certain damages they cause, like a broken window.

Worst-Case Scenarios

Consider worst-case scenarios before deciding to rent. How long can you afford for the unit to sit empty in the case that you can’t find a renter? How much money can you afford to dedicate to court costs or litigation if a renter doesn’t pay, causes damage that requires legal proceedings, or fails to pay for several months? Renting a property can be a wise home investment while waiting out the home market, but it’s also a game of chance. Understand the risks and rewards associated with renting, and then decided if you’re ready to take on the role of landlord.

http://www.mint.com/blog/how-to/advice-renting-out-your-home/

How to Sell in Tough Times  

Spring Housing Guide 2011

By Amanda Gengler and Elizabeth Fenner May 2, 2011

(MONEY Magazine) -- If you're in the market to sell your home, you probably feel you can't catch a break. Nearly five years into the housing bust, when many experts thought the real estate market would at least have stabilized, sales and prices are still dropping in most of the country.

In February existing-home sales tumbled 9.6% from the previous month, and the median price of a single-family home dropped to $157,000 from $163,900 the previous year, according to the National Association of Realtors.

You can't count on things turning around soon, either. At the current sales pace, it would take 8.6 months to clear out the 3.5 million existing homes listed today.

With the boost from the recent homebuyer tax credit gone, anyone who decides or is forced to put a house up for sale enters a market where houses often linger a full six months -- even a year -- without any bites.
Put part of the blame on stiff competition: Foreclosures and short sales, which accounted for 39% of sales in February, sell for about 15% less than conventional homes. "It's dreadful out there for sellers," says Patrick Newport, a U.S. economist at forecasting firm IHS Global Insight.

Fortunately, there is one glimmer of good news. Bargain hunters, too, know that home prices are down some 32% from their peak. In a recent CNNMoney survey, three-quarters said that it was a good time to buy a home. But translating that interest into an actual sale can require some extreme measures. It's not enough to show buyers your house is a deal: You have to convince them it's a total steal. That means slashing your price, bringing in a pro to pretty it up, and creating a killer website for your home. Here's how to do it right.

Slash Your Price, Bigtime: Sellers are still loath to accept the extent of the toll the bust took on their homes' value, says Tara-Nicholle Nelson, consumer educator for the housing website Trulia.com.
Many also give in to the temptation to list the property above fair market value to see what happens. Big mistake. About a quarter of sellers in the past year initially listed too high and were forced to knock the price lower, according to Trulia.com. Even in cities that have held up well, such as Charlotte, 25% of sellers resort to at least one price cut, and often two.

Think you can always drop the price if your home doesn't sell? Bigger mistake."The first 30 days on the market are the most important," says Norwalk, Conn., realtor Elizabeth Kamar. That's when your place attracts the most attention and gets the most showings. The result: You often end up with less than you would have if you priced it right to begin with, says Kamar. So get aggressive right out of the gate.

Undercut your competition:. In normal times listings of similar properties in your area would give you a good sense of what your home might sell for. Today there's a big gap between what sellers want and what buyers are willing to pay. Instead, figure out what you can realistically expect to get by asking your realtor to show you what houses similar to yours have sold for in the past three to six months. If more than a couple of the comparable properties were foreclosures or short sales, look closely at the photos and descriptions of those former listings. Distressed homes should be included in your comps if they are in move-in condition, says Las Vegas realtor Paul Bell.

Once you have a handle on your likely sale price, list your home a bit beneath that, says Rockaway, N.J., agent Ellen Klein. You don't have to undercut by much to attract attention, because that price will probably still be about 10% or 15% below what other homes are listed for. Even if you're competing with lots of foreclosures and short sales, your price should generate enough interest to attract more than one bidder, pushing up the final price to where it should be.

When Dorchester, Mass., realtor Julie Simmons wanted to sell her own home in January, she listed it at $460,000, about $5,000 to $10,000 below what she thought she'd sell for. "I knew I had to attract attention," she says. Even in a harsh winter, she received four offers in less than two weeks -- and sold for $465,000.

Take out the ax. No bites within 30 days? Make a big move. "When a property sits, people start thinking it must be listed too high," says Klein. To stimulate interest, make a giant cut -- as much as 10% of the asking price, and even more in an area where prices are still falling. That should be enough to warrant a second look from buyers who passed the first time, and to bring in a new pool of potentials who are hunting in the lower price range.

Last year Montclair, N.J., empty nesters Peter and Lauren Meyer decided to downsize from their seven-bedroom home to an apartment in the same town. They put their home on the market for $1.1 million, more than their realtor suggested. Six months and four price cuts later they pulled it off the market at $889,000. "At that point we wrestled with lowering the price further, but we were ready to move on," says Peter. The couple relisted their home for $799,000 and it sold for $808,000.

Play hardball. It's okay to reject low-ball offers if a buyer won't budge. But if a buyer is willing to negotiate, push aside feelings of anger or insult and start counteroffering, says Mabel Guzman, president of the Chicago Association of Realtors.

Ideally you'll be able to negotiate within $10,000 to $20,000 of an acceptable offer. Then, "using incentives as carrots and sticks can make it easier to reach an agreement," says Guzman. For example, if your buyer refuses to dicker, you might offer to leave behind the appliances. Or maybe you'd rather take the reduced price but have the buyer agree that you take 60 days, not 30, to move out.

Hire a Stager: There are people who want to sell, and there are people who have to sell. Kathy and Rex Roberts are among the latter. Based in West Hartford, Conn., the couple, who have two children, have been living in different cities since early December, when Rex, an IT auditor, started a new job in Silver Spring, Md., after a layoff. Listed that same month, their solidly built three-bedroom 1956 colonial has had no offers, despite two price cuts (it's currently at $389,500). Between rent on Rex's new place and their carrying costs on the house, they're paying a budget-straining $4,000 a month. "We need to sell," says Rex, "but we're not willing to drop the price again."

So in March they tried something new: professional home staging. Staging, increasingly popular with homeowners trying to sell mid-range houses, can extend from simply rearranging existing furniture to repainting, replacing fixtures, and bringing in new furnishings. The goal: to highlight the house's best features while making it as easy as possible for buyers to imagine themselves living there. Veteran real estate brokers interviewed by MONEY say that proper staging can speed the sale and often increase the price too. The key is to get it done right. Start with an open mind. Staging demands a psychological shift that many homeowners find challenging: thinking of your house not as your home but as a set. That means scrubbing away evidence that you actually live there. Your goal: the homey yet impersonal look of a Pottery Barn catalogue. Find the right stager. The ASP (accredited staging professional) designation is a plus -- it indicates the stager has gone through some basic training -- but it isn't essential. Get names from realtors or at realestatestagingassociation.com, then review the stager's online portfolio of before-and-after photos. Next, call homeowner references and ask how fast their homes sold after staging and whether they think the work helped. Establish a budget and ask the stager to work within it. Stagers typically charge $150 to $400 to walk through your home and give recommendations for each room. You can then execute the plan yourself or hire the stager to do it for an hourly fee, usually $100 or so, plus the cost of any new paint or furnishings.

If you make big changes, costs can add up -- but "I can often make a huge difference using what homeowners already have," says Mary D. Brooks, a stager and realtor from Breckenridge, Colo.
See whether your realtor will pay. If you're on the hook for a full 6% commission, you have significant negotiating power. "I'm happy to pay for staging because I know it works," says realtor Paul Aspelin of Victoria, Minn.  As for the Robertses, after getting advice from stager Kara Woods, owner of Stage to Move in Danbury, Conn., they painted their lavender dining room a soft gray and removed excess furniture, among other things; a professional stylist redid the living room (see above). "It's incredible how much bigger and more modern it looks," says Kathy.

Find the Right Hook: These days it's going to take far more than a FOR SALE sign in the front yard and a spot on the multiple-listing service to get potential buyers in the door. That means getting the word out in a creative fashion -- and finding a realtor who is willing to do the same. "The more eyeballs that get on the listing, the better," says Katie Curnutte of the real estate information website Zillow.com. To do that, you need a multipronged marketing plan of attack.

Create a great site. About 90% of buyers begin their search on the Internet, according to the National Association of Realtors. Make sure your home's online presence has a dozen or two photos: Having 20 instead of five photos will almost double the number of hits you'll get, according to Zillow.com. See the sidebar at right for more ways to keep potential buyers clicking on your site.
Vulture investors flipping their way to real estate profits

Throw money at them. Incentives can perk buyers' interest just as much as price cuts, says Matt Brown, director of business development at ForSaleByOwner.com. In fact, many buyers will agree to a higher price if their upfront costs are lowered, since they often run short on cash. If you can afford it, offer to cover the buyer's closing costs or pay the first year's property taxes or condo or homeowner association dues. However, those freebies may be practically standard, particularly in areas rife with distressed properties.

In that case, says realtor Guzman, you might be able to bring buyers to the door by tossing in an unusual bonus, such as a $1,000 gift card (throw in one for the buyer's agent as well); a belonging they mentioned loving, such as the pool table or plasma TV; or a $5,000 credit to use in the home as they wish. (You can even pay upfront points so that they can get a lower mortgage rate, if you can swing it.)
Be aware, though, that you must disclose any such gifts or payments when the offer is agreed on, and some lenders will not approve them. If so, you might have to find another incentive that the bank doesn't object to.
Showcase super condition. Yes, some buyers are hunting for foreclosures in rough shape that they can nab for a song. Yet just as many shoppers don't want -- or don't know how -- to put in that sweat equity. So hire an inspector to identify every problem with the home, even seemingly minor issues such as dripping faucets, and fix them.

"If an outlet doesn't work, why get the buyer wondering what else is broken?" asks Beth Foley, an associate broker in Holland, Mich. Tell your realtor to give anyone who tours your home a copy of the inspection report and your list of fixes.

Spread the word online. Having your home listed on a major website like Realtor.com isn't enough. Ask your realtor if you'll get an "enhanced" listing on the site, where your home gets top promotional billing. Many realtors will create a website just for your home. You also want to get your listing on alternative sites like Craigslist or even Facebook.

In 2009, when Karen Mauro put her small, historic two-bedroom Orange County, Calif., home on the market she thought it would be a tough sale. Realtor Lisa Blanc listed the property at $467,500 and spread the word not only through the MLS listing but also with an update on her Facebook page. A Facebook friend of Blanc's passed the info to someone she knew was looking for that kind of house. Within a week, Mauro had an offer for $460,000.

Stay away -- far away. In better times you may not feel obliged to drop everything to accommodate prospective buyers' schedules. Today, if buyers can't get in on their time, they'll skip it, says Summer Greene, who manages realtors in the Fort Lauderdale area. So be prepared to show a perfectly clean home at a moment's notice. And disappear (along with your dog, if possible) for all showings and open houses so that prospects can imagine themselves in your house -- an impossible task when your family is vegging on the couch.

When Betty McCoy began showing her Prairie Village, Kans., three-bedroom Cape Cod - style house, for example, she kept a list of must-do chores -- including emptying wastebaskets, filling the dishwasher, and making the bed  and walked out every morning with the place spotless. On the weekend she holed up at a local mall.

"Every time I thought I could go home, a new person wanted to see the house," recalls McCoy. But a few extra hours at the mall paid off in spades. In just a few days McCoy had an offer for her home -- for the full listing price. Find this story online.

ForSaleByOwner Launches Buyer-Side Mobile App  

House Hunting Made Easy

By Giselle Tsirulnik

ForSaleByOwner.com is arming house hunters with a mobile application that provides all of the relevant listing information on the properties nearest to them.

Consumers can search based on their GPS coordinates, or by city and state. In return, the ForSaleByOwner.com mobile app shows all the nearby ForSaleByOwner.com listings.

“Over the past couple of years and especially the last three to six months we have seen a huge increase in the number of consumers accessing our desktop site via their mobile devices,” said Deb Westfall, product manager at ForSaleByOwner.com [2], Chicago.

“With that we thought it would be a great idea to launch this buyer-focused application to cater to these on-the-go house hunters,” she said.

The application’s listings are color-coded to highlight open houses, new listings, houses with price reductions and houses already under contract.

The ForSaleByOwner.com mobile app makes it easy to manage the process of scheduling and seeing properties.

Users can get driving directions to the properties via Google maps.

Additionally, they can keep a short list of favorites and get updates when the price changes.

A social feature lets users get feedback from friends via Facebook, Twitter and email.

“One of the main differentiators of our app is that it is for buyers and not sellers,” Ms. Westfall said. “Consumers can be driving past a house and pull the listing up on their device.”

http://www.mobilecommercedaily.com/2011/03/24/forsalebyowner-launches-buyer-side-mobile-app

Lafayette Existing Home Sales Sluggish in February  


Although the median sales price for existing homes is on the rise in Tippecanoe County, the number of closed sales in February dropped from the same month last year and for the past 12-month period.

A report released Tuesday by the Indiana Association of Realtors also shows that the volume of new listings of existing homes on the market has dwindled.

"There's been a lot of hesitation by consumers to make sure the economy is moving in the right direction -- combined with a rough winter," Eric Seymour, principal broker with the Lafayette office of Prudential Indiana Realty Group, said in explaining the drop in numbers.

The report shows that closed sales in February totaled 81 in Tippecanoe County. That's 12 percent lower than the same month last year. For the past 12 months, closed sales dropped 5.7 percent, to 1,625 units.

New listings also showed a decline -- down 35.2 percent, to 171 during February.

The median sales price of homes in Tippecanoe County that changed hands rose 7.1 percent in February, to $120,000. During the most recent 12-month period, the median sales price rose 3.9 percent, to $123,600.

Statewide, the number of closed sales decreased 7.1 percent, to 3,212 in February, when compared to a year ago. During the past 12 months, existing home sales in Indiana declined by 6.6 percent, to 57,603 units.

Median sales price of homes rose 2 percent in February, to $100,000. During the most recent 12-month period, the median sales price rose 2.3 percent, to $112,500.

Karl Berron, chief executive officer of the Indiana Association of Realtors, said he is not surprised that the number of closed sales is down year-over-year.

"There was quite a bit of activity in the marketplace this time last year as the federal homebuyer tax credit loomed," he said. "Until the impact of the tax credit recedes, it's best to review housing data in the long-term. Those trends are very positive and point to a potentially good spring and summer with regard to activity."

Matt Brown, director of business development with Forsalebyowner.com, said the Chicago-based company is finding some success in the struggling housing market, following expiration of the federal tax credit for first-time homebuyers last April.

We expected there would be more of a lag ... but we're keeping pace. Sales are just as strong as last year," Brown said. "We've got about a dozen listings in the Lafayette area right now. Things are really going well. We're finding people are using our service. With declining home values, people don't have money to pay an agent."

Berron said that, on a statewide basis, the median sale price of homes increased in 15 of the last 17 months and the inventory of homes for sale has steadily trended downward since late 2007.

"Of course, the linchpin to an improved market is consumer confidence," he said. "Buyers must have confidence in their ability to obtain and repay a mortgage before the number of closed sales will rise in a meaningful way. And that means jobs."

Seymour said listing prices have dropped a bit, interest rates are remaining at attractive levels and demand is expected to pick up.

That's why we'll see a good spring and summer," he said. "What we have seen since March 1 is a rash of accepted offers. The market is just going crazy."

This story first published at JConline.com at http://www.jconline.com/apps/pbcs.dll/article?AID=/201103230200/BUSINESS/103230319

Weak housing market driving more home sellers to go FSBO  

Megan Lynch
Business,Local News
11/18/2010   10:30 am

ST. LOUIS, Mo. (KMOX) – More home sellers are striking out on their own.

“We are seeing a steady increase in 2010, of home sellers that realize the only way to keep the equity themselves, is to sell the house themselves, ” says Joanne Cleaver with ForSalebyOwner.com

The website has seen a double-digit increase in listings in the first half of this year.

Cleaver tells KMOX News, many homeowners are hoping to avoid paying real estate commissions to recoup their investment.  “If you bought in 2004 or more recently, chances are extremely good that any rise you saw in your home equity has been wiped out.”

But Cleaver says if you do go FSBO, don’t ignore what a realtor can bring.  “Fifty percent of this year’s buyers were first-time buyers.  They often work with brokers, they often need to work with brokers, they aren’t sure what they’re doing.  In that case the seller is giving up 3-percent commission to that buy-side agent.  We think that’s worth every penny.”

Cleaver says the web has helped home sellers get more exposure.

Copyright KMOX Radio

 

A Road Less Traveled: The FSBO Route  

A Road Less Travelled: The FSBO RouteYour

 Daily Tip List offers some pointers on what to consider when planning to sell your property on your own.

Home prices across Odenton and Gambrills are definitely depressed. Many sellers cringe at the thought of shelling out commissions to agents and opt to sell the home themselves. If the buyer is without an agent too, there's a lot of savings to be made.

Is it a good idea to sell the property yourself? The answer to that question depends on who you ask. Buyer agents, worried about having to negotiate commissions, might not favor For Sale By Owner (FSBO) listings, even though it is their fiduciary responsibility to do so. Sellers, on the other hand, are often enamored enough by the extra dollars at the end of the process and seem willing to try it.
This week the Daily Tip Sheet focuses on going down the For Sale By Owner route.

Here is our compiled list of factors to consider when planning an FSBO:

It's doable: It's just anecdotal evidence, but there are fewer FSBO signs in Odenton today. But contrary to what you might think of that, FSBOs (pronounced Fizz-bos by people in the know) might be the underreported real estate trend of 2010. More people seem to be listing their homes FSBO, according to Joanne Cleaver, senior content producer for the Tribune-owned ForSaleByOwner.com. States Cleaver, "In a year of declining sales, ForSaleByOwner.com has seen double-digit growth in listings and revenue. As home equity continues to erode, many sellers realize that the sell-side agent commission will siphon off their remaining equity."

It's all about the money: First the good news. FSBOs make better economic sense. The usual 3% commission on a $350,000 could potentially take $21,000 out of a seller's equity. An FSBO cuts down that value by at least a half.

The bad news is that you'll  have to shell out money for advertising and marketing your property. Some of these costs could be upfront–for listing your property on various sites, printing flyers, getting your home photographed and staged professionally. If you went the traditional sale route, some of these activities would have been handled by your listing agent for free.

The agent commissions are paid after you sell, a crucial factor to consider. It really boils down to this: smaller upfronts and bigger learning curve, vs. a large post-sale commission biting into your equity.
Reading up helps: You're a homeowner, so you've done the real estate jig once already. Read up on real estate terms, go over your old contracts and appraisals, re-acquaint yourself with the whole process. It's also time to pore over real estate laws for your state or sign up for real estate classes.

Selling your home FSBO adds another layer of complexity to the already complicated selling process. Rosemary Taylor, an area real estate agent with Zip Realty, cautions, "If the buyer is also unrepresented, the situation could easily turn into one big nightmare."

Can you see a spade for a spade? Sellers and buyers alike need some objectivity when it comes to the decision making process, states Taylor. That's the vital ingredient an agent brings to the table. The real estate agent, who has also attempted to sell her own properties FSBO in the past, says, "It's very hard for people to take criticism of their properties from buyers. Even I, a real estate agent, had a hard time accepting criticism." Often the inability to see problems or make easy fixes to properties might prevent a crucial sale. Having an agent gives you an additional set of eyes. It was for reasons like these that Taylor opted to get an agent for her personal sales.

Prepare for work: Selling a home is hard work. Selling it FSBO is even more so. There's advertising and marketing to take care of. Homes can be listed on multiple listing sites (MLS) or on realtor.com for a fee. There's videos, photography, repairs, open houses to take care of. There's a lot of paperwork to go over.

If you're hard pressed for time and energy, selling FSBO might not be the right choice for you.

You're the boss: Selling sans agent is like freelancing for a living. It's all about choices. And it's also not for everyone.

Among the choices you'll have to make: Whether and when to hold open houses, where to list your property, how much to list it for. If the home doesn't sell, you decide whether to take it off the market or reduce the sale price. You're working in your own interest, minus the seller-agent drama.

An Odenton homeowner who had listed her property as FSBO two months back said she found the agents she spoke with less informed than herself, and in a hurry to sell her home for a loss (her property didn't sell and is off the market; she refused to give her name just in case she wants to use an agent in the future).

?For some people, too much choice is a surefire disaster. The time and effort involved in going FSBO might be a big deterrent.  It's really upto you to decide whether the savings offset the work involved?.

Making the Case for “For Sale By Owner“  

Making the Case for 'For Sale by Owner'
Posted by Brad Tuttle Tuesday, April 20, 2010 at 2:54 pm

"If I've done my homework and priced my house correctly, any haggling between me and a serious buyer should be in the vicinity of between five and ten percent of the asking price – and not having to pay the realtor six percent is going to make coming to an equitable agreement for both parties a lot easier."

Read the rest at Len Penzo's blog.

Related:
No More Real Estate Agent Fees. No More Dry Cleaning Bills. No More Charges for Pest Exterminators.

Read more: http://money.blogs.time.com/2010/04/20/making-the-case-for-for-sale-by-owner/#ixzz15g0BALJq

http://money.blogs.time.com/2010/04/20/making-the-case-for-for-sale-by-owner/

Sell It Yourself and Save  

YOUR HOME / REAL ESTATE/Boston Globe Magazine

If you prep, price, and market your home the right way, you can find a buyer – even in this gloomy real estate environment.

When Linda Reifler-Alessi put her Hyde Park three-bedroom, two-bath stick Victorian on the market in April, “it never occurred to me to use a realtor up front,” she says. “We’re just do-it-yourselfers, and I felt I could do a really good job.”

According to the National Association of Realtors, only about 11 percent of sellers nationwide and 5 percent in Massachusetts sold their houses in 2009 with no assistance from a realtor. Yet new technology gives everyone easy access to information that was previously available only to agents, and tools from video sharing to social media can get your house seen by more potential buyers than you could have imagined just a few years ago. Today’s competitive market, however, means homeowners need to know much more than they did back when properties were being snapped up like dresses at the Running of the Brides; still, the savings can be worth the effort.

Reifler-Alessi and husband Warren Alessi were both artists, but Reifler-Alessi, in a midlife career switch, trained as a research librarian. In March, when she was offered a job at a library in St. Petersburg, Florida, where the couple now live, she wasted no time putting her new training to good use, learning about decluttering, staging, pricing, inspections, contracts, and more in two short weeks. “I just read and read and read,” she says. The couple had a contractor come in and do some work – re-grouting the bathroom tiles, painting the back hallway, replacing rotting wood on the porch – and on April 1 they put the house on the market through owners.com. Despite the recession, says Reifler-Alessi, “we sold it on the first weekend.”

What did the couple do right? And what do you need to know to replicate their success?

Price It Right

One of the main jobs of real estate agents is to inform sellers of the market. “I have what’s called a market snapshot for all my sellers,” says Stephen Bremis of Bremis Realty in Somerville. “It looks at houses that were sold, houses that are pending, and houses that are for sale, how long they were on the market, and how much prices were negotiated.” Bremis subscribes to a service that gathers all that information for him, but there’s no reason you can’t find it yourself, now that sites like Zillow and Trulia not only make public-record stats easy to find but also offer charts and graphs regarding communities’ demographics, school districts, crime rates, and more. The information on these sites is sometimes out of date, but it provides a good starting point.

Conventional wisdom among realtors is that chasing the market by dropping your price once, twice, or more can make your house seem undesirable. It’s far better to price it correctly from the beginning. In Boston, according to a nationwide study released by Trulia in September, the average price reduction on a house on the market is 7 percent – not a huge amount, but it adds up if your home is in, say, the $500,000 range.

Do your online research, but don’t hesitate to spend a few hundred dollars on an appraisal before you list your property. “The money you saved on the commission, and then some, is gone if your buyer gets an appraisal that comes in too low,” says Bremis, noting that banks won’t lend more than the appraiser says your house is worth.

And he adds, “Just because you’re not going to use an agent doesn’t mean you can’t consult with one.” Often, he points out, for-sale-by-owner (FSBO) properties end up with an agent after a month or two, so it may be worth an agent’s time in the end to give you a consultation.

Entice Buyers’ Brokers

Courting buyers’ brokers makes sense because often they’re the ones bringing buyers to your house. If a buyer’s broker has a choice between a listing that will offer him a commission and one that won’t, which do you think he’ll steer his client to?

Typically, sellers’ agents charge a commission of 6 percent of the selling price and then give half or one-third of that to any realtor who brings a buyer to their deal. “If the average in your area is 2.5 percent,” says Steve Udelson, CEO of owners.com, based in San Francisco, “give the buyer’s broker 3 percent. This is a tactic I’ve seen builders use – they pay above-market commissions to buyers’ brokers to get the property sold. You want to make sure buyers’ brokers are motivated to show your home.” You’re still saving at least 3 percent on your end, and if a buyer who’s not working with an agent should happen to make an offer, you’ll pay no commission at all.

Get Professional Help

“Even with a buyer’s broker fee,” Udelson continues, “you’re saving half the commission. The question is, how do you use that extra money to increase your chances of selling?” One way is to spruce up your home. Reifler-Alessi, for example, paid her contractor about $10,000 to “finish every last detail we never finished in 30 years.” Though that’s a significant up-front cost, she adds, since the house sold for $400,000, “percentage-wise, I didn’t think $10,000 was that much to get it looking perfect.” Zillow spokeswoman Katie Curnutte says most buyers don’t want to do substantial renovations, even if it means saving money on a fixer-upper, so sellers should “try to make the house stand out as someplace they can move into right now. They want to be able to walk in and see themselves living there.”

In addition to doing repairs and improvements, experts recommend hiring a stager and a cleaning service. Reifler-Alessi spent $800 getting her house cleaned “within an inch of its life,” she says. “It wasn’t a house where the buyer would have to do nothing, but it looked like a house where they’d have to do nothing.”

Bremis, who is an accredited stager, says hiring a second pair of eyes is key. When he tried to act as his own agent a few years ago, he didn’t see the clutter until agents at his open houses pointed it out to him. A stager can deliver a report with recommendations for as little as $100.

Another professional to bring in early is a photographer. With 90 percent of home buyers starting their search online, having lots of good photos to post is crucial. Research done by Trulia in 2009 found that listings with six or more photos were viewed twice as often as those with fewer, and a professional photographer can help you avoid common pitfalls, such as bad lighting, focusing on a piece of furniture rather than the room as a whole, and taking pictures that make the house look cluttered.

Finally, it’s important to have good legal representation from the beginning. Some boilerplate forms – such as purchase and sale agreements – are available online, but a real estate attorney can help you vet these and assist with negotiations, the title search, and disclosures, and answer questions from the buyer’s lender.

Yes, hiring outside help will cut into your bottom line, but it can also mean the difference between selling your house and not. “The median sale price now is $263,800 in the Northeast,” says Joanne Cleaver, senior content manager at forsalebyowner.com, based in Chicago. “Six percent commission on that is $15,828; 3 percent is $7,914.” So even if you offered a competitive buyers’ broker fee, deduct $300 for the appraisal, $300 for the photographer, and $600 for the lawyer, and add $1,000 for upgrades such as a virtual tour, “you can still save almost $6,000.”

Put Your Listing Where Buyers Will Find It

The multiple listing service, or MLS, is an electronic database that displays photos of a home and lists its key features – number of bedrooms, bathrooms, and fireplaces and square footage, for example – along with information such as taxes, nearby schools, area amenities, and a description written by the realtor. In decades past, only homeowners selling through an agent had access to the MLS, but today some brokers and websites offer a “listing only” service; that is, for a small fee, they’ll put your property on the MLS for you.

Some FSBO websites charge a fee to list with them and an additional fee to add your property to the MLS; others, such as owners.com list your house on their site for free and charge you only for the MLS listing. Either way, because the MLS is the largest and most comprehensive listing service in any given region, and the one realtors use exclusively, you need to make sure your house appears on it from the start – not only to bring in buyers’ brokers but also to ensure your listing gets the widest exposure possible. Many popular sites get their content from the MLS, including, in the Boston area, Realtor.com, Zillow, Yahoo!, Trulia, and boston.com. “Don’t monkey around by posting your house on Craigslist or FSBO websites only,” says Udelson.

Once your listing is on the MLS, expand its reach even further by networking, both in person and online. Pass out fliers at your book club or block party, and post them on any public bulletin boards in your neighborhood. “I’ve heard people say they don’t want their neighbors to know all their business,” says Tara-Nicholle Nelson, consumer educator at Trulia, “but the neighbors often know people who want to live in that neighborhood. You have to cast a wide net.”

And consider social media like Facebook, MySpace, and Twitter. “I do think social media have and will continue to change the way people connect with each other around their house hunts,” Nelson says. The exposure you’ll get from social media depends, of course, on how extensive your network is to begin with, but “you can’t underestimate the power of word of mouth,” says Zillow’s Curnutte.

In her real estate blog, Ask Tara@ Trulia, Nelson goes a step beyond social media by recommending you “post a video love letter about your home on YouTube.” If you don’t already have one, get an inexpensive video camera and walk through your house and your neighborhood, she advises, telling prospective buyers not only what your family adores about the house but also showing them your favorite park or coffee shop. “It helps them visualize living a great life there, too,” she writes.

Step Into Your Salesman Shoes

Selling your house can be an emotional endeavor. Even Bremis, the Somerville real estate agent, admits he felt out of his element when he tried to market his own home. “Even though I do this for a living,” he says, “an agent will come in with an unbiased eye.” The trick is to view your own property with the same kind of dispassion and objectivity that a real estate agent would bring to it. “It can be stressful to have a potential buyer criticize your decorating,” says forsalebyowner.com's Cleaver. “That’s just part of the dynamic of this transaction. A house is a really personal thing; it’s a reflection of who you are. Part of the process of selling is decoupling your identity from the house.”

When showing your home, Reifler-Alessi recommends, let people look around on their own; it keeps them from feeling pressured. “My husband hovers and tells his own stories,” she says. “I asked him to make himself scarce. I greeted them at the door, said, ‘Please come in, you’re welcome to look around,’ and then made myself look busy.” You don’t want to bond so much with potential buyers that you find yourself overloading them with irrelevant information or, worse, anecdotes that have a whiff of “ick” – such as the time your cat gave birth to kittens in the closet.

Cleaver encourages sellers to make a booklet that people can take with them as they tour the house and hang onto when they leave. “There’s no reason to trail them like a stalker,” she says, “but they do need a little interpretation – otherwise how would they know the central air was updated in 2003?” She even recommends putting tags or “talkers” throughout a room, tidy slips of paper saying, for example, “Kids’ bathroom was renovated in 1996.”

And be honest even when your answer is less than positive. It makes you seem more trustworthy and is a good way to prepare people for that disclosure statement they’ll be asking for if they decide to make an offer – the one that tells them if the roof needs to be redone, if there’s a school going in that will block the view next year, or if the fence isn’t situated quite right along the property line. “Disclosures are a massive area of liability for sellers,” says Trulia’s Nelson, a former attorney. “My advice is to disclose anything that could make a difference in a reasonable buyer’s decision making.”

Be Patient

Gregg and Dinara Daniels of Weymouth put their four-bedroom, two-bath house in the Wollaston Beach area of Quincy on the market themselves in January of last year, after having already bought a new home. It didn’t sell for eight months. The whole time, they were paying two mortgages, doing the maintenance on both houses, and shuttling back and forth for open houses and showings. Still, they never got to the point, Gregg says, of “complete panic.” “Unless you’ve got the steal of the century, you’ve got to be really patient,” he adds, “especially in this market.”

“People start doubting themselves,” says Dennis Craig, president of isoldmyhouse.com in Marlborough. “Sometimes people will buy [an online FSBO] package on a Friday and if the house isn’t sold by Sunday, they’re anxious. But you have to give it 60 to 90 days.” If someone calls the website and says they’ve had no action, anisoldmyhouse.com employee will go through the listing with the seller to try to determine if the price is too high, if the pictures aren’t as good as they could be, or if there are any other marketing problems. Some sellers try the recommended tweaks and stay the course, while others decide to hire an agent.

Gregg Daniels, who listed with Craig’s site, is glad he didn’t take the second option: “At the end of the day, I saved $11,000 and didn’t do $11,000 worth of work.”

Help the Deal Go Smoothly

Even with all this effort, getting people interested in your house is often the easy part. There are still negotiations to be conducted and paperwork to be done.

“FSBO sales and open houses tend to attract more unapproved buyers,” says Joseph McBreen, a loan officer with Mortgage Master in Belmont. Experts say it’s especially important to make sure buyers are preapproved in today’s economic climate, where it’s much tougher to secure a mortgage.

Bremis points out that a good part of a realtor’s job is to make sure the preapproval is solid. He objects when a buyer comes to him with a preapproval from a bank in another state or from an online lender. “I question whether their appraiser is going to be knowledgeable,” he says, “and how the bank is going to view the property from Florida.” He prefers dealing with lenders he’s acquainted with; he has known others to drag their heels, holding up a deal while the seller continues to pay the mortgage.

This is part of the reason, Bremis says, you should make sure your purchase and sale agreement includes deadlines – for the inspection, the mortgage application, the mortgage commitment, and so forth. This contract, he says, is “the nuts and bolts of the deal. It sets the framework for the transaction.” In addition to a general inspection, separate inspections can be done for mold, pests, lead, and radon; make sure the buyer gets any of these he wants done in a timely manner. “Otherwise he could do it a month later,” Bremis says.

Another way to help keep the deal on track is to gather up all the relevant paperwork – receipts for improvements, evidence of special assessments, homeowners’ association papers, and anything you might have to give the IRS at tax time – and make a set for the appraiser, buyer, and buyer’s lender. “Make it easy on your buyer by giving them all the documentation they need to support the sale price, to help make the deal close,” says Cleaver.

And don’t take the house off the market too soon. “If you just have the preapproval,” says Udelson, “definitely continue to solicit interest in your house. When you get a formal offer and it works and you accept it, when you have a date for closing and an escrow deposit, that’s when you can change your MLS status to ‘pending.’ ”

If the deal doesn’t come together but your buyer is still interested, Cleaver recommends considering a lease-to-own arrangement. “Typically, you put a portion of every month’s rent toward a down payment,” she says, “and at the end of a year the buyer can make another run at a conventional loan and try to complete the sale. It’s a fallback position for both parties, but both achieve their short-term goal: The seller is out, and the buyer is in.”

Elizabeth Gehrman is a freelance writer in East Boston. Send comments to magazine@globe.com

© Copyright 2010 The New York Times Company
 
alt

For Sale By Owner: Sign of an Overcrowded Market?  

By KEVIN POST Business Editor | Posted: Sunday, October 10, 2010


Press of Atlantic City

There are about 2 million houses for sale this year, the U.S. Census Bureau reports — five years after the for-sale inventory was 1.4 million — and more homeowners are trying to sell the properties themselves, real estate professionals say.

“It could be some people had homes up for sale for a while and didn’t have success, or there are just more houses on the market right now,” said Allan Dechert, president-elect of the New Jersey Association of Realtors.

Joanne Cleaver, senior content producer for ForSaleByOwner.com in Chicago, said its business dropped with the rest of the market after 2006, but through July of this year listings and sales are up about 3 percent. Correction: 33% - ForSaleByOwner.com staff

She said increased interest in “FSBOs” is driven by the economy and the advance of technology.

Clients say that with so little equity left in their homes by falling property prices, they can’t afford to have some of it paying the typical 6 percent commission to a real estate agent, Cleaver said.

At the same time, she said, digital technology has made it easier for sellers to reduce the gap between what a Realtor can offer and what they and companies such as hers can do.

ForSaleByOwner.com, in fact, will put a seller’s listing on the nation’s biggest real estate database — www.Realtor.com — but only as part of its top-of-the-line package, which costs $809, she said.

Michael Imperiale has paid far less to put his home in the Eagles Glen development in Egg Harbor Township on the market.

In mid-June, he put it on Owners.com for $49.95, which allowed him to post a description of the four-bedroom, 21/2 bath house and as many photos of it as he wanted. He put up 14 pictures.

“We’ve gotten a few calls,” Imperiale said, “not as many, I guess, as if you had it with a Realtor. We had some people come through.”

Last week, he added Zillow.com to his marketing, paying $39.99 for a similar listing with description and photos.

The economy and reduced home values motivated Imperiale to sell his house himself.

“What (equity) we have in the house is already lower, and if you pay the real estate commission on top of that, that’s an additional loss,” he said. “We’re going to have to take a small loss on the house, but if you add a $15,000 real estate fee on top of that, it could be substantial.”

Imperiale and his wife bought the house new in 2005 for $287,000 and added hardwood floors, a paver and concrete patio, and landscaping in the front and back.

In his first listing, he priced it at $299,900. In last week’s listing, he came down to $299,000.

FSBOs accounted for 13 percent of home sales in 2008, said the 2009 National Association of Realtors Profile of Home Buyers and Sellers. That survey found that among owner-sellers, 51 percent put the listing online, 44 percent used a yard sign, 22 percent placed a newspaper ad and 15 percent held an open house.

Dechert, of Ferguson Dechert Real Estate in Avalon, said there are many potential pitfalls for those who manage the selling process themselves.

Pricing: “A lot of times owners tend to overestimate the value of their property,” he said, which can reduce the chance of a sale.

Technology has made some pricing information available to homeowners, but not all of it, he said.

“Even Realtors are continually analyzing values and getting sellers down to where they need to be in today’s marketplace.”

Marketing: Experienced real estate agents know where to market properties, both online and off. “The Internet is a great place to be if you know where, and we still use print, but it’s a matter of picking the right ones,” Dechert said. “There are a lot of different real estate publications and it’s a matter of knowing which ones work.”

Then there are online virtual house tours for potential buyers, which look at each room and more. “Every one of our properties for sale has a virtual tour, but the individual seller wouldn’t likely have access to that software or the ability to put one of those together,” he said.

Negotiating: Real estate agents are better at negotiating sales agreements, and not just because they have more experience, he said.

“You don’t want it to be personal,” Dechert said. “Sometimes we tell sellers you’ve got to take the emotion out of this, that it’s a business transaction.” That can be hard for seller-owners.

Cleaver said agents have an advantage with negotiations and paperwork, but said that if a real estate attorney is overseeing the sale, the attorney can help with those things, too.

She conceded that one FSBO disadvantage is still strong: Showing the house and screening the people seeing it. “That can be emotionally difficult for some people.”

Dechert said it can also be a security risk, one that Realtors work to reduce when they’re taking people through houses. That may have motivated the several FSBO owners contacted for this story who declined to comment, despite the free attention it would bring to their properties. They would prefer people were not aware they’re selling their homes unless those people are looking to buy themselves.

Cleaver said her company encourages sellers to indicate that they’ll pay the standard half commission to buyer’s agents, which cuts their fee savings in half but encourages agents helping buyers to show them their houses.

Imperiale has done that on both his listings, so if his house sold for the $299,000 he’s asking — a big if, of course — he’d give the buyer’s agent about $9,000.

He’s also ready to be patient, but at least what he’s done so far has been no problem.

“I understand the economy and realize houses aren’t selling like they were and we’ll be on the market longer,” he said. “But I have to say that regarding the do-it-yourself aspects and the simplified technology, it’s really easy to do.”

Contact Kevin Post:

609-272-7250

KPost@pressofac.com

Posted in BUSINESS on Sunday, October 10, 2010 12:01 am

Six Steps To Selling Your Home Without a Realtor  

by Patricia Kime (Subscribe to Patricia Kime), posted Aug 10th 2010 8:00PM


When Lake Grove, N.Y. residents Jim and Rose Maguire decided to sell their vacation home in Vero Beach, Fla. they decided to try the home sale themselves.
With limited knowledge of home sales (they'd purchased three homes but never sold any), Jim went online, searched "for sale by owner" and came across www.ForSaleByOwner.com.
Following the site's instructions, the couple took pictures of their home, listed it and waited for buyers to come.
They spent their winter holiday hosting open houses and corresponding with potential buyers to no avail. So when it came time to return home to Long Island, they handed the listing to a Realtor with a caveat -- that it exclude a couple they'd met through ForSaleByOwner.com who needed to sell their own home first.
Weeks after the Maguires returned to Long Island, the couple called.


"I knew the market was tough, but "I figured 'what do I have to lose?,' " Jim Maguire said. "I knew what I had to gain – saving $15,000 on a real estate commission."
The Maguires successfully maneuvered the For Sale By Owner process, or FSBO (pronounced "fizz-bo") in real estate lingo – not an easy task in a down market. In 2009, 11 percent of home sales were FSBOs, according to the National Association of Realtors. And just over half of these, 6 percent, actually sold on the open market. (The remaining 5 percent were private transactions among family, friends or neighbors, according to the NAR).


The NAR estimates that nearly 70 percent of all for-sale-by-owner sellers eventually hire a professional agent for help. While these numbers might look discouraging, this percentage includes home sales using a real estate agent, says Joanne Cleaver, a senior editor at ForSaleByOwner.com.
So while a for-sale-by-owner home sale is hard work, it can be done. With the right attitude, knowledge, motivation and some Internet savvy, nearly any homeowner can turn their property into a successful home sale.

Experts and homeowners alike agree on these six steps to a successful for sale by owner experience:

1. Do your research

The first order of business in preparing for a home sale is to become familiar with the ins-and-outs of real estate transactions. Since you've been through the experience at least once, pull out the paperwork and contracts on your home and read them. Learn the language of real estate and read a book or two about how to sell your house.

Gather all the paperwork and forms you'll need for the home sale closing, including copies of property records for appraisers, the title company and others, as well as insurance documents, disclosures and legal documents. At this time, also line up people who will help you in the process, including a real estate attorney, an appraiser if you plan to use one, and a title company. Finally, consider how you want to structure the deal. Will you want to offer such incentives as owner-financing or lease-to-own to attract first-time homebuyers? Learn how these arrangements work.

2. Prepare your house

Now turn a critical eye to your home. Cleaver says house issues fall into three categories: cosmetic problems; functional issues; and things you can't fix. The first two should be corrected before you try and sell your home and the third, if any, should be addressed with the home's pricing.

Turn a critical eye to your house. Paint scuffed or brightly colored walls in soothing neutrals. Replace carpeting or refinish floors. Make sure that your home is cosmetically clean and perfect. Then turn to the working items in your house – the functional things – and see if they need to be repaired or replaced. Ruthlessly inspect appliances, the heating and air conditioning, the roof and other items. Cleaver says. If these are nearing the end of their lifespan, they could turn off buyers. Finally, take a look at things that you can't change about your house: Is it on a busy road, adjacent to an odiferous chicken farm or on an awkward lot directly facing the neighbor's back windows? You may need to adjust or lower the price to entice buyers.
 
Essential How-To-Guides on AOL Real Estate: Home Buying, Selling, Renting, Moving and Home Improvement
The next step is to clean it, clear away clutter and personal items and stage it. Aim for crisp, clean interiors, closets and spaces. "Trim the trees, wash the windows, get rid of big heavy draperies. Stuff like that doesn't cost you anything and it brings the light in, making a home seem bright and spacious," Cleaver says.

3. Price your house

The number one mistake owners make is pricing their home too high, says Piper Nichole, author of "The For Sale By Owner Handbook." Price it too high and you might scare off potential buyers. Allow it to sit on the market and it gets stale. "Buyers start to wonder what's wrong. Pricing effectively helps a home sell faster," Nichole says.
To determine what you consider the home's fair market value, check out neighborhood sales from the past six months. Attend open houses and check out the competition. Use AOL Real Estate's Home Values page to get a starting idea. You can interview real estate agents, but be up front with them regarding your intention to try to sell the house yourself. Some may decline an offer to speak with you, but many know that you still might need an agent and will welcome the chance.
Finally, if you are stumped, hire an appraiser. A professional assessment could cost between $300 to $500, but having that appraisal in hand is also helpful if there is a wide discrepancy with the potential buyer's offer or the lending appraisal.

4. Market your house

The internet has taken away what used to be a real estate agent's ace-in-the-hole: the multiple listing service. For a small fee, owners can list their for-sale-by-owner listings on an MLS, giving them similar exposure to the market. Other outlets, including Craigslist and websites geared exclusively to home-sales-by-owner draw home shoppers. "If you use these online avenues to market your home, make sure the site gets a lot of unique visitors. You don't want to waste money on a site that doesn't get a lot of traffic," Nichole says.

Also, spread the word on social networking sites, forums you frequent and traditional media outlets like local newspapers. To entice agents with buyers, offer a commission, one comparable to one they'd receive in a normal sale. "We love buyers' agents," ForSaleByOwner.com editor Cleaver says. "Many first-time buyers use an agent and we encourage our customers to offer that 'co-broke' fee to help reach that market."

5. Negotiating

Be prepared for the offer and the counteroffer on your home sale. If you have a firm bottom-line in mind, make sure it's justified with strong research and weigh the cost of continuing to market the home. Again, if you are squeamish about haggling, consider bringing in someone – a real estate attorney – to assist.

6. Closing the deal

Make sure you are familiar with the required closing paperwork for a home sale in your state. Hopefully, your buyer will have already shown you their written preapproval and you will sail through the closing process. But be prepared for snags or delays along the way. Add some cushion to the closing date: Schedule your move and the turnover so that it's somewhat flexible, should the mortgage approval process be delayed. Be prepared for the results of any home inspections and appraisals, and come to the closing table with everything mandated by state and federal law.
In the Maguires case, they hired a title company that managed all the last-minute details, Jim Maguire said. "It was no trouble at all."

List Your Home For Sale By Owner Without Getting Burned  

by Andrea Carniero, posted Aug 11th 2010 8:47PM


When Kira Lewis and her husband sold their first home in Dallas they went the traditional route, Realtor and all. When it came to sell their next home, the pair took one step away from tradition, employing a discount broker and doing much of the work themselves. By the time they got to their third home sale, "we were pretty much experts at the process," says Lewis. So they took the leap and went solo.

With regular agent commissions around 6 percent of the home sale price, and a market still not up to par, more and more homeowners are eschewing full-service agents and going the "For Sale by Owner" (or FSBO) route for their home sale.

In fact, a National Association of Realtors survey showed that, in 2008, FSBOs accounted for 13 percent of home sales. But though sellers may escape paying commission, a sale by owner isn't as easy as throwing up a "For Sale" sign and sitting back. So how do you do it? Here are five tips.


1. Know your options
Even if you don't want to employ a full service agent to sell your home, you can often find either discount brokers willing to work for less of a commission or a listing service that will post your home information to a multiple listing service or MLS, the main database that Realtors use to find homes for sale in their area, for a flat fee. Lewis chose a listing service for her last home sale, giving her the benefits of an MLS without the agent attached.


2. Set a realistic price
Once you've decided on a route, do your research on sites like AOL.RealEstate, Zillow and Trulia to see what comparable homes in your area are listing and selling for. Be sure to take into account special features, such as updated kitchens and bathrooms, pools and garages when coming to a final asking price. Online appraisal services can also do the work for you. For example, forsalebyowner.com offers their online valuation report for as little as $18.95.

Quick Tip: Only look at recent area home prices, don't go any further back than six months.


3. Have someone on your side
If you choose to sell your home completely solo be sure to have at least one expert in your corner. Employing a real estate attorney can save you time and money in the long run. "Get an independent party to review the documents," says Lewis. "It's well worth the money."


4. Be prepared to do the work
A sale by owner isn't as easy as it may look. Between marketing the home, showing the home, negotiations, contracts and closings, home sales can often become another full-time job.

Lewis, who has a background in marketing, took matters into her own hands, hiring both a photographer and videographer to create a virtual tour of her home for MLS and creating flyers that she then placed underneath the sign in her front yard. She also handled all the showings herself. The benefit? "A lot of the buyers appreciated being able to talk to the owners directly," says Lewis, "about the neighborhood, the schools, the traffic...."

When it comes to writing actual advertising copy, stay concise and to-the-point, says forsalebyowner.com. Read through other ads in the paper or online and see what works, then highlight the features that set your home apart from the rest.


5. Sellers beware
Even those going the FSBO route may not escape the reach of shady buyers, so protect yourself with a few simple realty agent tricks. Coldwell Banker agent Jan Bronis sold her Miami home on her own, before becoming an agent herself, and advises those going that route to be cautious.

"Always get a phone number before a showing and always find a reason to call the number and be sure it's real," she says. Another Realtor tip? Try to make sure buyers are pre-qualified, or have at least met with a mortgage broker prior to showing the home. "A lot of buyers don't even know what they can afford and may just be wasting your time," says Bronis.

So after all the marketing and showing and pricing that goes along with being an FSBO seller, is it really worth it to try the home sale yourself? Lewis says maybe. "Don't do it out of arrogance, " she says. "Educate yourself. Make sure you know what you're doing." Lewis herself ended up selling her last Dallas home in less than three months before making the move to Florida with her family.

As buyers in a new city and a new market, the search for a new home led the Lewises to an old path. They called an agent.

Before Going FSBO, Answer These Five Questions  

 

When John Ullman wanted to sell his Portland, Ore. home 20 years ago, he knew he was going to have trouble selling it through conventional channels. "My wife was a potter, and we had a kiln in the backyard," he recalled. "By anyone's standards, that's a liability."

By anyone's standards except another potter. So rather than use a local real estate agent, who Ullman was sure would suggest that they spend money to tear out the kiln, he advertised it himself in Ceramics Monthly magazine. He found a buyer. "They even paid us extra for the kiln," he said. And a side career was born. Ullman, who runs a performing artists management agency, has since sold two other homes by himself.

Learning how to execute a "For Sale by Owner" (or FSBO), said Ullman, isn't for everyone. It takes a certain "mavericky" type of person, he said, to ignore the real estate agents who will try to convince you that only the pros can navigate the long road to selling a house.

The main reason that people take this on is simple: Homeowners can keep more of the money from home sales if they don't have to pay real estate agents' 6 percent commission. But it's not for everyone, experts warn.

"It's more work to sell your home without a broker," said Joanne Cleaver, senior content producer and spokesperson for ForSaleByOwner.com, a site that offers services and advice to homeowners contemplating a FSBO. "But a lot of the work you will need to do whether you use a broker or not. A real estate agent is valuable to help you list the property and show it. But they can't fix up the house for you or get all your documents in order. If you think that you can handle the marketing, you can think about doing this yourself."

Experts advise homeowners ask themselves these questions before attempting a home sale by owner:


1. Can you price your home competitively?

A real estate agent knows what homes are selling for in your area, and what buyers are willing to pay. You need to be realistic about how much your home is worth. Determine what a fair price is by doing your research. Check out home values on AOL Real Estate and scroll through the Multiple Listing Service, which is an aggregate listing of homes for sale in a geographical listing. No matter what you think your home is worth, you will only sell it if it's priced competitively.

One of the most valuable services a real estate agent provides, said Cleaver, is access to the Multiple Listings Service. Only licensed real estate agents can list a home with the MLS. Keep in mind that 93 percent of homebuyers began their search on the Internet, according to the National Association of Realtors. So if you don't have access to those listings, you'll need a good strategy.


Claire Celsi, a social media strategist and owner of Public Relations Project, in Des Moines, Iowa, has one. She is hoping to sell her 100-year-old, 3-bedroom, 1-bath home via Twitter. She is offering an incentive to her 2,600 Twitter followers to get the word out about her home: a $500 finder's fee. She's also hosting a party for those who live nearby to show people her home and to hand out flyers, and she's inviting her friends in the media, as well. "I'm hoping this is a unique enough approach that people will take an interest," she said.


Celsi, a professional marketer, is comfortable in this role. But not everyone is. If you don't think you can handle this aspect of selling your home you can for a fee, get access to the MLS through sites such as ForSaleByOwner.com.


3. Can you be available?


If you use an agent, an open house is a chance for the sellers to take the afternoon to go to the movies. But if you are doing it by yourself, you need to be present to watch strangers peek into every corner of your house. And open houses are just the beginning. Buyers like to poke around at other times, too, so you will need to determine whether your schedule is flexible enough to be available to that one buyer who might be the one to buy your home.


"It's a huge time commitment," said Jaime Uziel, a partner with Sheppard, Rosen, Uziel and Sussman in San Francisco, a firm specializing in real estate law. "If the parties have already found each other -- like when a tenant decides to buy from an owner -- then I would say, definitely, yes, go ahead and sell your home without a broker. But if you are working a full-time job, it can be a difficult thing to do."


4. Can you answer the questions?


Those strangers poking around your home are also going to ask tough questions. "You need to be scrupulously honest and clear about what might be wrong with your house," said Ullman. "You will be sorry if you don't tell someone about a potential problem."


Cleaver said the best way to clear up any questions is to assemble a folder with receipts of maintenance and improvements, documentation of when you bought the home and any changes to the title. Not only will it demonstrate to the buyer that your roof really is just two years old, you can "look for any complications that could hold up a sale," she said. "If you never obtained the proper permits when you finished your basement, now is the time to get them."


5. Can you negotiate all the forms?


This is where you would do well to hire an expert, namely, a real estate lawyer. While laws vary state by state and city by city, said Uziel, disclosure statements -- which reveal information about the home to the buyer -- can be complicated and need someone who is familiar with the documents to ensure that they are filled out correctly. In addition, said Uziel, "you want to be sure you have a relatively solid purchase contract. There are so many laws that regulate the purchase of real estate, you want to make sure the contract you are using is a good one. A lot of forms out there don't cover issues specific to your location."


6. Can you handle the insults?


You have to remember this is a business transaction, and not take anything a potential buyer says personally. If you are going to do it yourself, you've got to let go of people who insult your house. Smile, and realize that someone is going to fall in love with it.


"When I told my father I was selling my house myself he said, 'Two hundred people might come through a house, but only one can buy it. Forget about the other 199 people'," he says. Ullman's father had some experience with selling homes, too. He was a real estate agent.

10 Risky Home Improvements  

MainStreet.com featured ForSaleByOwner.com in a slide show published on August 5, 2010, about home improvements that don't really add value. 

Here are the two tips with our advice:

Illegal Repairs


Even those intent on living in their home forever need to make sure their upgrades are installed legally. Many major renovations require permits from your state due to the safety risks involved. Marston recommends contacting your local Building Inspections Department before completing any major renovations to ensure proper permits are obtained and you understand the safety codes thoroughly.

Muddling

“Chances are illegal improvements will be flagged by a buyer's home inspector or appraiser,” Joanne Cleaver, Senior Content Provider for ForSaleByOwner.com, says.  “Then you not only pay municipal fines to get after-the-fact permits and inspections, but you've destroyed the trust your buyer has in the house—and in anything you say about the house.”
Home improvements should be in tune with your neighborhood, but they also need to fit the style of your own abode as well. For example, if you own a ranch house, don’t install an ornate iron doorway trimmed with gold leafing. Combining two discordant styles is what Marston calls “muddling,” and it may make prospective buyers pass on your listing.

“Never make upgrades just for bragging rights,” Cleaver says, referring to those coveted granite countertops. “If [they] make the rest of the kitchen look tired and shabby, better spend the money on new appliances that add flash and functionality.”

 

Womans Day online - 3 Sites for Cutting Out the Middleman  

3 Sites for Cutting Out the Middleman

ForSaleByOwner.comSelling your home without using a realtor can immediately save you 6 percent on commission costs, but if you don't know what you're doing, it can seem like a daunting task. Online listing service ForSaleByOwner.com will walk you through the process by educating you on everything from how to market your home to how to handle buyers, financing and closing paperwork. You can even advertise your property on their site, and they'll send you yard signs, marketing flyers and additional advertising materials to help get the word out.

This article was published on June 24, 2010.

Forbes.com, May 3, 2010  

 

Real Estate Advisor
Why You Don't Need A Real Estate Agent
Jean Folger 05.03.10


Real estate is one of the largest investments a person makes, and it goes without saying that sellers want to get the best sale price possible. One of the expenses associated with selling a property, and one that can eat up profits, is the real estate agent's commission. While there are certainly many instances where a real estate agent's expertise more than earns the commission, there are other times when a real estate transaction may be able to get by without an agent's involvement. You may not need a real estate agent if the following situations apply to you.

* You have the time and effort to devote to the sale.
Selling a property takes a lot of time and effort, and here is another area where an agent can really earn his or her commission. Marketing, showing and responding to questions about the property can become a full-time job. A real estate agent may be able to sell your property faster. He or she may already have a file of people who are looking for a property like yours. In addition, the agent can quickly list your property with a multiple listing service (MLS) that can greatly increase the property's exposure on the market. The agent may network with other agents to find out if they have potential buyers for the property. They will include the property on the company's website and advertise in a variety of channels.

That being said, if you've got the time (and this is how you want to spend it) you can certainly venture out on your own. Create your own listing on websites that specialize in FSBOs - for sale by owner. Popular websites today include http://www.forsalebyowner.com/ and http://www.listbyownerinmls.com/, which allows your property to be entered into the MLS for a fee. You can also enlist the services of a fee-based Web marketer such as http://www.vflyer.com/ that can create and distribute online ads or "virtual flyers" that can be added to online classified markets such as http://www.craigslist.org/.

* You are familiar with real estate procedures and contracts.
While most real estate agents are not lawyers, they do provide guidance and direction in making sure that all of the proper paperwork has been completed. Most agents are experienced in what documents are required--and when, where and by whom they must be filed. Even with an agent, however, you will still need to retain a lawyer to handle the legal documentation. If you are familiar with real estate transactions, you can, with the help of a lawyer, complete all the necessary paperwork without the assistance of a real estate agent.

A real estate agent can also help you set a reasonable asking price for your home based on comparables in the area. You could instead pay a real estate appraiser to do this; typically this service costs about $200, and the appraiser will provide a fair market price for the property.

* You will be available to show the property.
One of the things that you are paying for through a real estate agent's commission is convenience. The agent must be available to show potential buyers the property, or can arrange a lock box containing keys to the property so that buyers can view the property on their own. The agent will ask to see identification and will document who viewed the property and when.

Many buyers look at dozens of properties before making a decision, and if your property isn't easy to view (i.e., you are not freely available to show the property) the potential buyer will probably move on to the next home on the list. However, if you are frequently home--if you work from home, are a stay-at-home parent or are otherwise a homebody--you may be able to make this work.

* You are a savvy marketer.
While we have all cringed at some real estate agents' listing descriptions--think "quaint bungalow needs a little TLC"--most do provide the positive spin a property needs to attract potential buyers. They know the current market, what elements of a property are the "hot topics" and what home buyers are looking for now. In short, they know what sells and they know the lingo. In addition to the property's description, an agent can provide a host of marketing venues to get the word out.

Can you do the same? You bet, especially if you have a little marketing savvy and Internet know-how. Listing your property on FSBO websites is a sound choice, and a perfect write-up and professional looking photos will set you apart from the masses who list on these sites. Additionally, a website dedicated to your property can assist in attracting potential buyers, especially if it includes a virtual tour of the property and other useful information such as details on nearby schools and hospitals. A domain name can be purchased for less than $10 per year and typically comes with website templates that you can customize to showcase your property. You can also place ads in local newspapers and put a brochure box at the property containing a detailed flier.

The Bottom Line
Deciding to go without an agent can be daunting; however, many people find it is worth the extra effort to try to secure a larger profit. Keep in mind making the decision to sell your own property without a real estate agent's assistance is not set in stone. You can choose a date in the future where, if you have not been successful, you can hire an agent to do the selling. If you have the time, energy and enthusiasm to put into selling your property, you may not need a real estate agent.

Link:

http://www.forbes.com/2010/05/03/you-dont-need-real-estate-agent-personal-finance-diy.html?boxes=Homepagechannels

 

For Sale by Owner: 5 Smart Tricks  

Kristen and Chuck Dvorscak of Midland Park, N.J., need to sell their 1929 three-bedroom Colonial now. The couple just had a second child, so the Dvorscaks, 33, want to upgrade to a bigger home nearby. Trouble is, their house’s value has plummeted about 7 percent from the $535,000 they paid four years ago. They’re resigned to taking a loss, but hope to save the traditional 6 percent real estate broker’s commission by having Kristen market the house herself. (Asking price: $499,900.) “Frankly, I don’t think a Realtor does much that I can’t do myself,” she says.

Like the Dvorscaks, about one in four prospective sellers are going it alone, doing something known as a FSBO. (Short for “For Sale by Owner,” it’s pronounced fizz-bo.) “For homes worth $300,000 to $400,000, not paying a real estate broker’s commission is $18,000 to $24,000 of potential savings,” says Greg Healy, vice president of operations for ForSaleByOwner.com. “With the economic uncertainty we’re living in today, who isn’t going to try to save that kind of money?” The Dvorscaks will avoid shelling out almost $30,000 if they get their price and sell directly to the buyer — or about half that if they end up paying a 3 percent commission to a buyer’s broker.

Selling your house on your own is tougher than when the economy was booming and buyers were falling over themselves to make offers. But FSBO owners often fare well. A 2008 Consumer Reports study found that nearly all homeowners in their survey who sold on their own got their asking price, while sellers using agents received an average of $5,000 below their asking price. Similarly, National Association of Realtors figures show the average sales price for by-owner sellers was 97.5 percent of their asking price — while sellers with agents got just 95 percent. (A third study, dating to 2007, found no significant difference in sales prices, although it did find that agents unloaded homes faster than FSBOs, on average.)

CBS MoneyWatch asked FSBO experts for their best advice to sell your home on your own in today’s slow housing market.

1. Get the Price Right

Realtors like to say that pricing your home is an art that only a pro can get right. But you can compile your own comparative market analysis of recent sales to help determine an asking price. “You don’t need a Ph.D. to figure out how to price your house,” says Robert Irwin, author of For Sale by Owner: A Complete Guide.

An online appraisal service, like the one offered by ForSaleByOwner.com, can help determine a price range based on public record information, for about $20.

But if you’re willing to spend the time, you can get a better estimate through a little research. Start by entering your address on Zillow and Trulia to find your estimated home value and nearby sales within the past six months. Then, check newspaper ads and real estate blogs for a sense of the market and spend a weekend visiting open houses within a mile or two of your home.

Next, take into account your home’s upgrades or special features. Just don’t be unrealistic about their value. In better times, kitchen and bath remodelings often recouped nearly their entire cost, but not today. “Roughly speaking, expect to capture at most 75 to 80 percent,” says David Zwiefelhofer, of FSBOMadison.com.

Check with an escrow holder or title company to gauge your closing costs and add that figure to your asking price.

2. Flex Your Power

In today’s depressed housing market, buyers are extremely price sensitive. Your advantage as a FSBO seller is that you can afford to offer a more competitive price than sellers using agents, since you don’t need to build the commission into your price. So if you want your house to move quickly, consider pricing it 2 to 3 percent below competing homes.

3. Use a Flat-Fee Multiple Listing Service

To get your home noticed by more prospective buyers, you might want to sign up for a “flat fee MLS” (Multiple Listing Service). Available through FSBO Web sites such as ForSaleByOwner.com, Owners.com and FSBO.com, you pay about $400 and your home will then appear on the Multiple Listing Service seen by Realtors. You’ll also pay the 2 to 3 percent commission if a broker brings in your buyer. “Most FSBO sellers don’t mind paying buyer’s brokers because they view them as doing a lot of work: preparing the buyer to qualify for a mortgage and helping with the closing,” says Steve Udelson, CEO of Owners.com. “What they don’t want is to pay another 3 percent to a seller’s broker who, in many cases, is not doing nearly as much work.”

4. Piggyback on Other Sellers’ Marketing

Keep a close watch on the marketing efforts of real estate brokers in your neighborhood and try to piggyback on them. Open houses are a good example: “If someone on your street is using an agent and having an open house, put your lawn signs out and have one at the same time,” says FSBOMadison’s Zwiefelhofer. “Then you can catch the traffic that they are spending all that money to generate.”

5. Have a Gimmick

As a free agent, you should do things a little differently to make your house stand out. When one North Carolina seller noticed local sellers dropping their asking prices last fall, he offered to pay for a new car lease if a buyer agreed to his full asking price. “He figured it was worth spending $12,000 for the lease to secure a buyer rather than dropping his price $15,000 and hoping that a buyer would appear,” says Eric Mangan, spokesman for ForSaleByOwner.com. The gamble worked.

Other FSBO sellers have offered buyers free flat-screen TVs and $5,000 American Express gift cards. Gimmicky? Sure. But think of all the flat-screen TVs you’ll be able to buy for your new house with the money you saved on real estate commissions.

7 Steps Lead To For Sale By Owner Success  

If you want to get every possible dollar from the sale of your home this spring, it may be time to stick that for sale by owner sign out in the front yard.

In this difficult economic time, it may be the difference between profit and loss.

People who can sell their homes the for sale by owner -- or FSBO -- way essentially are going to save 6 percent of the selling price, the money they would have paid real estate agents, says Greg Healy, vice president of operations at ForSaleByOwner.com.

But unless you're living in a model home, there are some things you should do well before you think about planting that sign in the yard this spring.

"It's a tough market," says Healey. "If you can get five or 10 people to come to your house, you don't want to turn them off because your place isn't ready."

Following these seven steps should increase your odds of for sale by owner success:

1. Design your selling strategy

Once you determine who your potential buyers are, you can craft a plan to market your home to them. Only 36 percent of homebuyers first learned of the home they bought through a real estate agent in 2009, according to the National Association of Realtors, so your approach may be to advertise on Web sites such as ForSaleByOwner.com, or to put up fliers in local neighborhoods. You can also use sites such as flatfeelisting.com or listbyownerinmls.com to list your home on your local multiple listing service, where buyers or their agents will see it. Determining your game plan now allows you to set up a realistic time line and allocate sufficient funds.

2. Know your home's strengths and weaknesses

"The last thing you want as a seller is to be surprised," says Healy. Get a professional home inspection done early so you can identify problems that are almost certain to be discovered and have time to fix them. Even if you don't fix them, you can incorporate the knowledge of any problems into your pricing, Healy adds.

3. Check the property's record

This is the time to make sure there are no liens against your property, says Piper Nichole, author of "The For Sale By Owner Handbook." Go to the county courthouse and ask for help finding any claims that have been filed. You may want to hire a title insurance company to do a search or even a real estate attorney who can help you clear up any problems.

4. Get an objective price evaluation

Spend $300 or $400 to hire an appraiser, Healy says. In the current market, there's no room for wishful thinking about how much you can get for your home. Armed with a professional evaluation, you can price the home more accurately and show the appraisal to potential buyers as an official documentation of your home's value.

5. Research your local market

There's a wealth of information on the Internet about sale prices in your neighborhood to get you started, but you can learn a lot more by doing some literal legwork around your community. "Walk around your neighborhood, and go visit the open houses of similarly styled homes or properties," says Healy. "See if you'll really be able to sell against your competition." The earlier you start the process, the more time you have to see how your home measures up before you put it up for sale by owner. Then, you can either do some minor improvements or price accordingly.

6. Start home improvements

Once you've had an inspection done and visited similar houses for sale, you can start on home improvements that will increase your chances of selling at a higher price. "A lot of times the first thing potential buyers see is the outside of your house," says Nichole. "It can be a huge factor in whether they actually want to see the inside or keep on going." Do a thorough yard cleanup and prune and trim bushes and hedges. Other relatively inexpensive improvements include painting, decluttering, removing furniture and replacing soiled carpets.

7. Pull together your team

You may not have a real estate agent, but you'll still need a supporting cast. A real estate attorney is perhaps most important, especially in the closing process. Many states require sellers to disclose certain types of information about a property.

"It's a real estate attorney's responsibility to tell you all the things you have to disclose, which then helps you with the inspection," says Healy.

Another professional to consider is a mortgage professional -- not just for your use on subsequent purchases, but for any potential buyers who come without being financially prepared.

"If buyers come to your home and say, 'I love your home' and you ask them 'Are you pre-qualified?' and they don't know what you're talking about, you then have a mortgage person you can guide them to," Nichole says.

Clifton couple negotiate selling their own home without a broker  

Retirees Frank and Dee Caputo have sold two homes without the help of a real estate agent. Now they're trying again, with their Clifton bi-level.

Though they started out by listing with a Realtor last summer, they decided they could more easily lower their price to attract more buyers if they didn't have to pay an agent's commission. In a tough market, they say, that's an advantage.

"We have room to negotiate," said Dee Caputo. The house is now on the market for $459,000, down from $479,000 when it was listed with an agent.

The Caputos are among the minority of home sellers who go it alone rather than list with an agent. These "for sale by owner" — or FSBO — sellers usually are motivated by their desire to save the real estate agent's commission, typically 5 percent to 6 percent. Depending on who's counting, FSBOs make up 11 percent to 20 percent of the market nationwide.

The housing market's troubles over the past three years offer compelling reasons both for and against do-it-yourself selling.

With home values in the region down about 20 percent from their peaks in 2006, many homeowners are "underwater" on their homes — that is, they owe more on their mortgages than the property is worth. That makes them especially eager to save the commission cost, which can run $20,000 or more on a $400,000 house.

On the other hand, sales have been much slower than during the housing bubble a few years ago. Buyers — facing tighter mortgage lending standards and high unemployment — are hard to come by. That leads most sellers to seek an agent's help.

"There used to be a sprinkling of FSBOs," said Michael Fitzpatrick, a Hackensack lawyer who does real estate closings. "Now that the market is tough, it's really making it more difficult for people without selling experience or expertise to get their houses sold. I'm not seeing them."

One of the key obstacles is that most buyers work with agents, who tend to find properties through the Multiple Listing Service. These agents are unlikely to bring buyers to see an FSBO property unless the homeowner will pay them the same commission they'd expect from another agent.

To plug into that network, many FSBOs pay a flat fee — typically starting around $400 — to be listed in their local MLS, with the promise that they'll give a buyer's agent 2.5 percent or 3 percent of the sales price.

Owners.com, a Web site that lists FSBO properties, has focused more of its energies on this approach during the tough market, according to CEO Steve Udelson. Owners.com charges $395 to place a property in the local MLS.

"Sellers are trying to cut out the listing agent because they don't feel the listing agent does a lot for them, but they want the exposure on the MLS," Udelson said. "Working with a buyer's broker really increases your chances; you'll be much more successful than being outside the system. It's a smart middle ground for a lot of do-it-yourselfers who are looking to save money."

According to a recent survey by the National Association of Realtors, FSBO sellers actually sell faster and for closer to asking price than sellers working with a real estate agent. However, FSBO sales tend to be for less money, according the NAR survey. This may reflect the fact that FSBOs are more common in rural areas where property values are lower.

Certainly, the FSBO route is much less popular than working with an agent. Many sellers don't have the time, flexibility or expertise to create ads and show the house. Real estate agents argue that they offer expertise on pricing, preparing and marketing the home, as well as screening buyers to make sure they can qualify for a mortgage.

"The value that an agent brings is knowledge of the market and the process, along with negotiating skills," said Walt Molony, a spokesman for the NAR.

"We help the sellers free up their time," said Chuck Martini, an agent with 3.75 Realty Group, a discount brokerage in Cresskill. "When someone doesn't show up for an appointment, it's our time, not their time."

Realtors say they also follow up on the paperwork that keeps a deal together.

"It's a hand-holding process," Martini said.

But FSBOs believe they don't need anyone holding their hands. They rely on their lawyers to draw up contracts; they study the Internet and visit nearby open houses to set their asking prices. And they ask potential buyers to bring mortgage preapproval letters from a lender.

The Caputos paid $600 to post their house on ForSaleByOwner.com, and another $100 for a professional sign for the front lawn. They acknowledge that they'd get more exposure working with a real estate agent, but hope that they'll make up for that with pricing flexibility.

John Fazio, a 33-year-old teacher who now lives in West Milford, sold two homes in Clifton last year — his own and his late mother's. Both sales went smoothly and took only a few months.

"We didn't want to pay a Realtor 5 percent or so," Fazio said. "I figured I'd give it a shot."

He acknowledged that the pool of buyers was not as big as he would have attracted by working with a Realtor. But he felt bargain-hunters would find his two-bedroom house, which was listed on ForSaleByOwner.com and Craigslist. He and his wife, Charmaine, also put a sign on the lawn and held a couple of open houses.

"People who are looking for a good price, eventually they'll get to a 'for sale by owner,' " he said. The Fazios sold their two-bedroom house for $246,000, after starting out asking $270,000.

Having heard that most buyers start their home search on the Internet, Lou and Joann Salomons of Wayne recently decided to bypass an agent and put their colonial on ForSaleByOwner.com for $729,900.

"We wanted to save ourselves $30,000," said Joann Salomons. They're also veteran FSBOs, having sold their starter home in Totowa in 1993 to buy the Wayne house.

To get the house ready, they painted, had the floors refinished, and upgraded the kitchen with granite countertops and stainless appliances.

They haven't put their house on the MLS, but are willing to pay a 2.5 percent commission to an agent who brings in a buyer. No one has taken that deal yet.

The people who run FSBO Web sites say that buying and selling without an agent is likely to become more popular as people now in their teens and 20s — who do everything on the Internet — enter their home-buying years.

"It's in their DNA," said Greg Healy, vice president of operations for ForSaleByOwner.com.

Healy said that information on home prices is now so readily available that sellers can price their homes without an agent's help. "If you're online and in the right place, buyers are going to find you easier than ever before," Healy said.

But for now, especially in a tough market, many people who try FSBO end up turning to an agent.

Nick Zampetti of Bogota decided to list with Martini, the Cresskill agent, after trying unsuccessfully to sell a Bogota investment property on his own for several months last fall. Zampetti started out asking $319,000, then cut the price to $289,000, on Martini's advice.

He admits his advertising efforts were not sophisticated – just sticking a sign on the lawn and tacking ads to the supermarket bulletin board next to the "Lost Cat" fliers. He didn't have time to post the house on Web sites and do other marketing.

"Sometimes it's better to compensate someone else because they'll do it more quickly and diligently than I'm going to do it," he said. "You don't need to be a jack of all trades.

"I doubt very much I'll ever try it again, unless the market becomes super-hot and I can just throw up a sign and sell it," Zampetti said.

For Sale by Owner may become more common, but is it a good idea?  

The depressed housing market is likely to continue this year, and it's causing more home sellers, facing a likely loss that would be exacerbated by paying a broker's commission, to try their hand at selling themselves. But the wisdom of this tactic is in dispute.

ForSaleByOwner.com, one of the nation’s biggest “by owner” real estate Web sites expects 2010 to be a banner year for its company and other “by owner” firms. “[As] more real estate data and information is available through numerous online resources…sellers will resist paying real estate commissions and will instead look to 'by owner' selling alternatives,” said Greg Healy, vice president of operations for ForSaleByOwner.com.

He also predicts average real estate commission rates will rise to almost 6 percent while home prices in some markets could fall an additional 4 to 6 percent in 2010, giving consumers even more incentive to shop around.

Nikki Kaleta listed her Chicago home “by owner” on the Internet for just those reasons: “We are trying to save on the agent’s commission.” Kaleta’s property has been on the market for about six months and she and her husband are willing to wait until the right buyer comes around. Kaleta said they have had a decent experience with selling “by owner” in the past. “Recently, we sold our condo on the Web site in three months and paid no commission. We are hoping to have similar success this time around."

Other homeowners also are hanging in there despite disappointing results so far. Jane Pittner has reduced the price of her Chicago home three times on three Internet sites since listing “by owner,” but says she isn't discouraged. “I’m not going to pay an agent to sell my home below market value. What do I need that for! Everyone’s looking to the Internet for their real estate needs these days. If I want to sell my home below market value, I’ll do it myself.” Still, since Pittner first listed the property, she has lowered her asking price by about $200,000.

Vicki Cox Golder, the president of the National Association of Realtors, said that Pittner is a perfect example of a consumer who needs a reality check from an experienced industry expert about the value of her home. “Realtors have been around for 100 years," she said. "As the first, best source for real estate information, Realtors have not only anticipated and adapted to the evolving needs of their clients and customers, but have also influenced industry trends and innovations that will carry us into the future.” The Realtors Association says that real estate agents will tell you the facts, even though they may not always be what you want to hear.

A Chicago homeowner who does not wish to be identified agrees. “We just sold our home and ended up working with an agent. We gave 'by owner' Web sites a try but didn’t get any serious bites. We didn’t know what we were doing.” He said, “Sometimes, agents really do know the best price point to sell.”

Sam Bruce, a new online “by owner” seller in Chicago and himself a retired real estate agent, sees both sides of the argument. “I decided to list 'by owner' because I was disgusted with the service I was getting from my last three brokers," he said. "I’m not going to sell my place for some ridiculous price just so they can get a commission. To me, it’s not about saving money by not paying a commission, it’s about selling my place for a fair price as soon as I can. If I didn’t have brokerage experience myself, I probably would list with an agent. There is so much out there the average consumer just doesn’t even know they don’t know.” Since Bruce’s online “by owner” listing was posted last week, he has received two serious inquiries.

The National Association of Realtors, despite its insistence that professional agents are better in determining an appropriate asking price, acknowledges that "by owner" sellers are doing well. The association says that home sellers who list their property “by owner” sell their home in six weeks while those homes listed with real estate agents typically stay on the market for 12 weeks. Also, “by owner” sellers on average achieve a sales price that is 97.5 percent of their asking price, while an agent-assisted seller gets 95 percent of that asking price.

On the buyers' side, the Realtors Association admits, more buyers are looking to take control over their own housing search. According to data from the association's profile, more than 90 percent of home buyers are looking to the Internet to educate themselves and explore the many options associated with housing research. That’s up from 87 percent in 2008, 84 percent in 2007, and just 71 percent in 2003.

Studies by Northwestern University and Stanford University have found that people who sell their home “by owner” are as effective as agents in maximizing the sales price of their home. These studies cite other research saying that more home buyers and home sellers will use the Internet more to educate themselves throughout the home buying and selling process.

The trend appears to portend less demand for real estate agents. Already, the market has shrunk. National Association of Realtors membership has decreased 17 percent from 1.37 million in 2006 to a current 1.13 million members.

South Florida home sales soar; prices plummet  

Housing sales spiked in November versus last year's anemic levels, as owners continued to slash prices in a market skewed by foreclosures and tight lending.

Home sales in Miami-Dade jumped 24 percent last month versus a year ago, but the median price slipped 18 percent to $184,800, the Florida Association of Realtors reported Tuesday. In Broward, home sales were up 39 percent and median prices dipped 21 percent to $182,100.

Condominiums saw even more impressive gains. Sales in Broward were up 103 percent as prices fell 21 percent year-over-year to $86,500. And in Miami-Dade, condo sales nearly doubled on a 14 percent price decline to $149,000.

Nationally, home sales hit a three-year high.

Those gains helped the markets shrug off news that the economy did not grow as much as originally reported earlier this year. The government said third-quarter Gross Domestic Product was 2.2 percent -- not 2.8 percent. Even so, the Dow Jones Industrial Average ended up 51 points at 10,465.

Compared to October, however, local home and condo sales were down, suggesting that the apparent strength has as much to do with last year's dismal results as this year's gains.

``Can you imagine using last year as some kind of baseline?'' asked Fort Lauderdale real estate attorney and author Shari Olefson. ``Although we have had steady progress, it's not real solid.''

While the number of unsold homes in Miami-Dade and Broward has decreased significantly, more foreclosures are likely to stream into the market next year and continue depressing prices, Olefson warned.

One segment the Florida data does not reflect, however, is the number of homes sold by owners, without an agent's help.

As prices continue to tumble, many sellers are hoping to eke out profits by taking the do-it-yourself approach and saving on real estate agents' fees, said Greg Healy, the vice president of ForSaleByOwner.com, a website that helps sellers cut out the middleman.

``There is a huge segment of the population, especially in the Florida market, that cannot financially give up the six percent commission,'' Healy said. ``They just don't have that option.''

During the second half of 2009, the site has seen double-digit growth, he said.

In addition, the National Association of Realtors said that, for the first time this year, as many buyers found the home they purchased online as through real estate agents. While not all of those online sales belong to the ``for sale by owner'' or, FSBO, segment, the data underscores how websites have become an important tool in the market.

The fight for online visibility, however, can be fierce.

Ed Moran, 55, said he spent several months posting his late mother's 1,420 square-foot Hollywood Hills home on free websites, including Zillow.com and Craigslist.org.

But those sites were so overrun by other sellers (including real estate agents posing as owners) that his ads were quickly buried.

``Probably, during normal times, a good sign out front and some advertisements would have yielded a sale,'' said Moran, who has been asking $199,000 for the home. But with so many houses on the market -- and so many foreclosures driving down prices -- his three-bedroom, two-bath home was lost in the shuffle.

``We were not getting any serious offers,'' said Moran, who recently broke down and contracted a real estate agent.

Tuesday's local data mirrored state and national trends. In Florida, home sales were up 61 percent versus November 2008 and condo sales were up 111 percent.

Nationally, home sales were up 44 percent as prices dipped 4.3 percent to $172,600. Part of the demand was also driven by the $8,000 tax credit for first-time home buyers, analysts said.

What 2010 looks like for sellers will largely depend on what they are holding, said Matthew Muscarelle, a real estate agent with Keller Williams in Miami.

There is a ``massive'' appetite for homes priced under $200,000, he said.

``I have buyers that have made 10-to-15 full-price offers for the last several months and have not been able to get a single deal,'' he said.

``But the condo market is much trickier. We still have a massive oversupply.''

Agent or No Agent?  

Side by side on a quiet South Nyack street with striking Hudson River views, Jeanette Corvino and Jeffrey Hall have each been trying to sell expensive homes in a challenging market. But the similarity of their neighboring situations ends there.

Ms. Corvino has a four-unit Italianate Victorian that she bought as an investment property more than four years ago and now needs to unload before a balloon payment on a second mortgage comes due.

Mr. Hall and his wife, Sharon, have a colonial revival and are empty nesters with more than a quarter-century’s worth of equity.

After listing her property with a real estate agent for almost a year for $892,000, Ms. Corvino decided in June that she could not afford to pay a broker’s fee on the sale and is now trying to sell the house on her own for $840,000.

For his part, Mr. Hall picked up the telephone and called the same agent who sold him and his wife their house 26 years ago. They have set an asking price of $899,000.

“It would never even occur to me not to use an agent,” he said. “But I’m a restoration architect. I live in the past.”

Are real estate brokers — like travel agents and other middlemen coping with the increasingly digital culture — in danger of becoming expensive anachronisms?

After all, it is only logical that as people feel more empowered based on their access to information and their ability to connect without help, they are at least questioning the wisdom of the conventional way of buying and selling a home.

According to the National Association of Realtors, the percentage of homes sold nationally by their owners has actually declined, from 14 percent in 2004 to 11 percent in 2009. But Real Trends, a company that monitors the residential brokerage industry, considers those findings to be low, and estimates that the number of for-sale-by-owner, or FSBO, homes was almost one in five three years ago, when it stopped tracking them.

“I’ve been in this business for 33 years and I’ve always wondered why more people didn’t say, ‘I’m going to take a shot at this myself,’ ” said Steve Murray, the editor of Real Trends’ reports. “Now, with the technology available, that would seem to be inevitable. We tracked FSBO numbers through 2006 — before the market collapsed — and we were already seeing substantial differences between the attitudes and habits of people under 35 and those over 50.”

Younger people, he said, are far more likely to embrace the multitasking and risk taking involved in selling their own homes. If the decision to use an agent is becoming generational as well as situational, that would not augur well for real estate agents.

“This is going to sound bad, but I just don’t give a lot of credence to what brokers do,” said Cynthia LeStar, who is selling her studio apartment on the Upper East Side. “I mean, what do they do that I can’t do on my own?”

Ms. LeStar, 30, moved to New York from Cincinnati on Sept. 9, 2001, and was on a PATH train to the World Trade Center station from Hoboken for an interview with JPMorgan on the morning of Sept. 11. Despite her parents’ pleas to come home, she took the job and, after a few years, decided to buy instead of rent. But she was laid off last spring, and recently concluded that she could no longer carry her studio while changing careers — to acting.

Ms. LeStar consulted streeteasy.com for comparable neighborhood sales and settled on an asking price of $444,000. She placed an ad on craigslist.com and expanded her search for buyers by gaining access to ASmallWorld, a private international online community that she likened to a celebrity Facebook. Marketing her apartment has cost her nothing.

Ms. LeStar’s background in finance made her comfortable in representing herself. “Even when I was buying, I would have preferred cutting out the middleman,” she said. “I felt out of the loop. I love negotiating.”

Like Ms. LeStar, Ms. Corvino, 35, was undaunted by the prospect of catering to potential buyers. She says that she has not seen any appreciable difference in the amount of traffic now that she is in charge.

Ms. Corvino bought the house hoping to turn it into a bed-and-breakfast. But when the economy tanked, she needed the income from renting all four units.

"Selling in this market is difficult, because it takes a special person to buy a large home like this one,” she said. “Not to mention that right now it’s a rental property."

To appear more businesslike, she hired a graphic artist to produce a sign that “didn’t look like those chintzy red ones that say For Sale By Owner.”

Ms. Corvino also created a Web site for the 4,600-square-foot house, 46Voorhis.com, where she posted 43 color photos taken by a professional photographer. She placed ads at craigslist.com and loopnet.com, a commercial real estate site. A sales manager for a wine wholesaler and importer, Ms. Corvino monitors responses via her mobile phone and has been able to break away from her job to show the house.

Factoring in the minimal cost of open houses, she estimates that she has spent $1,000 thus far, a far cry from the $40,000 to $50,000 broker’s fee that she would have to pay if she sold for near her asking price.

“I think if you go about it the right way, you don’t need an agent,” Ms. Corvino said. “But that’s if you can take all the calls, answer all the e-mails and be at the house at 3 o’clock in the afternoon.”

Next door, Mr. Hall said he and his wife, who works in the Nyack school district, do not have the time, inclination or technical expertise to sell their own house.

“I wouldn’t call myself Internet savvy,” said Mr. Hall, 55. “I don’t have an iPhone. I wouldn’t know what avenues to use. I also think the personal touch is important, though the younger generation probably feels that Facebook is a human relationship.”

When the Halls decided to sell their house last July, there was no question that they would list it with Suzanne Blaisdell Grant of Wright Bros. Real Estate in Nyack. Mr. Hall has served on town boards with Mrs. Grant’s husband and considers them old friends.

Mrs. Grant cited her longstanding relationship with the Halls as a prime example of why real estate brokers are not endangered and why what they do cannot be compared to selling a stock or booking a vacation.

“I can understand why people would say, ‘Why would I pay someone to sell my house? It’s a lovely house. I’ll just put a sign out,’ ” Mrs. Grant said.

“But it’s so much more than that, much more than selling a stock or buying a car on Craigslist. It’s being honest with the seller in staging the house, getting it ready. It’s giving the seller distance, because people who are emotionally involved in a purchase or sale of something as big and life-shaping as a home aren’t necessarily in the best position to be objective.”

Jennifer Juergens of Manhattan and her four brothers and two sisters came to that conclusion after their mother died in 2007 and they put her Tudor-style house in Larchmont up for sale.

“It needed some work, but the market at the time was strong and Larchmont is a very desirable town,” said Ms. Juergens, 48, a former magazine editor who now works in public relations. “My brother said he thought we didn’t need a broker, we could sell it by ourselves. So we put an ad on Craigslist and listed it for $1 million. The first guy that came to see it with his wife, before it was even cleaned up, told my brother John, ‘Oh, we love it; we’ll give you $1 million.’

“But,” Ms. Juergens continued, “he also wanted his father to see it. The dad came over and said, ‘We’re going to start with the asking price and work our way down.’ They went room to room and he kept saying, ‘Well, this needs replacing, this is old, this isn’t good.’ Everything negative. This was the house we’d grown up in. Our mother had just died. Emotions were high. My brother got so upset he just asked them to leave.”

Now supporting Mrs. Grant’s contention that there is no better buffer than a broker, the family hired Keller Williams Realty of Scarsdale and embarked upon a cleanup plan. The house is listed at $899,000.

Linda West Eckhardt, an author of cookbooks, has her Dutch colonial in Maplewood, N.J., on the market for $345,000. She has sold homes in Texas, Oregon and California, and is firmly in the get-an-agent camp — with a caveat.

Having worked with agents who were “indifferent, incompetent and otherwise disappointing,” she said, “I feel about real estate agents the way I feel about literary agents — those areas are filled with peril.” But, she added, “I believe they’ll get you more than enough to make up for their fee.”

So Ms. West Eckhardt’s advice is to “interview, interview, interview” brokers. But this time around, serendipity played a role in her selection. At a party in Maplewood, she met Joanne Douds, who works for Sotheby’s International Realty in Fort Lee, N.J.

“She says the hard things to me, like ‘Your house smells like dogs,’ ” Ms. West Eckhardt said. “On the day of the open house, she walked in with her makeup and eyelashes six inches in front of her face and Prada shoes, took one look at what I considered neat and clean, rolled up her sleeves and said, ‘Get me the vacuum cleaner.’ ”

Ms. West Eckhardt said that at 70, she is more eager to churn out several more books than to spend time extolling the Maplewood-South Orange school district to a trail of bright-eyed couples.

But as Ms. LeStar has discovered while showing her Upper East Side studio, there is not that much extolling to do. “The buyers walk in and they know as much about the apartment as you do,” she said.

Technology has made it much easier for people to educate themselves, a trend that agents have had to acknowledge and adjust to.

“It’s not like it was 10 years ago, where you might show someone eight houses in a day,” said Russ Woolley, the president of Wright Bros. Real Estate. “They have already been online and know what they like and don’t like. They may have seen 20 pictures of one house.” Potential buyers, he said, now arrive with specific houses in mind.

Dan Murray, a firefighter in the South Bronx, is hedging his bets and working both ends of the real estate equation.

To market their three-bedroom condominium in Riverdale, Mr. Murray and his wife, Diana, placed ads online and paid a one-time fee of $300 to forsalebyowner.com, which placed the property with the Westchester-Putnam Multiple Listings Service.

Mr. Murray, 40, is prepared to pay the agent who delivers a buyer 2 percent of the selling price, substantially less than the standard industry fee of 5 percent to 6 percent.

Meanwhile, in his search for a new home in northern Westchester County, he is using Google maps and satellite photos, while scouring the same sites he is advertising on for a FSBO.

“I would think anyone who is comfortable with the Internet would prefer to do it this way,” Mr. Murray said. “Eventually, who won’t be?”


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For Sale By Owners - Proceed At Your Own Risk Says Brokers  

Just mention the words "For Sale by Owner," and realtors cringe. Mention those same words to some sellers and they say with a pumped fist, "Yesss!" So, who's right? Most brokers agree that sellers should always use a licensed realtor.

It depends on whom you ask. For realtors, it makes little sense for a seller to go it alone, without the help of a broker and his or her existing customer base. For sellers who wish to save the realtors' standard commission fee of six percent and are willing to put in the work involved in marketing their homes, it makes perfect sense.

"I had an exclusive contract with a realtor and he had two open houses and I never heard from him again," said Susie Goetz, whose three-bedroom East Hampton house near the village is on the market for $590,000. She is selling the house herself.

"I've advertised the property and held open houses every Sunday, she said. "I do what a realtor would do and have had far more people seeing my house than when I was with a realtor." The property has been on the market for a year, and she has had one offer, which didn't pan out.

That she hasn't sold her house isn't lost on John A. Viteritti, a licensed real estate broker, lecturer and consultant to the real estate industry. Viteritti has probably taught most of the brokers on the East End; he teaches the local real estate courses offered by Long Island University at its campus in Riverhead. "With all my experience and even as a licensed broker, I would never sell my house myself," he said. He referred to statistics from the National Association of Realtors (NAR).

"The difficulty of for-sale-by-owner transactions increased with challenging market conditions over the past year. The level of FSBOs was a record low 11 percent, down from 13 percent in 2008. The share of homes sold without professional representation has trended down since reaching a cyclical peak of 18 percent in 1997" said Walter Molony of NAR Public Affairs.

Many of these properties, he said, were not placed on the open market - 42 percent were "closely held" between parties who knew each other in advance, such as family or acquaintances. "Factoring out properties that were not placed on the open market, the actual number of homes sold without professional assistance was a record low six percent - the rest were unrepresented sellers in private transactions. The market share of open-market FSBOs is nearly half of what it was five years ago - 10 percent were sold on the open market in 2004."

Most buyers expect a house that is for-sale-by-owner to be cheaper than a house being sold by realtors, Viteritti said.

"According to the NAR, those sales that are negotiated through a real estate broker sell for 16 percent more than if the owner sells themselves. So, even when you consider you're saving the six percent broker's fee you're still losing 10 percent," he said.

"The market that we're in today is very different from a few years ago. There's an excess of product, but real estate brokers have the customer base that a seller needs," he added. "It would be impossible for me to generate that customer base on my own."

Another issue, he said, is that a for-sale-by-owner seller doesn't have the knowledge of real estate laws that a broker has.

But Linda Leahy, of Bridgehampton, is determined to sell her house on her own. She has had exclusive deals with brokers that haven't panned out in the past. A broker recently helped her list her house on MLS, the multiple listing service, as an open listing, which means any broker can sell the house for the full commission, and she has it listed on forsalebyowner.com, a national website that charges a fee for listing your house and providing a depth of information about how to go about selling your house on your own.

Leahy, who has her realtor's license but is not affiliated with any real estate company, has had her four-bedroom, 3,000-square-foot home on Williams Way in Bridgehampton on the market, off and on for three years. It is currently priced at $1,995,000.

"The house is now priced to sell," she said. "We are south of the highway and the house has a lot of good features." Still, she said, she hasn't been able to sell it.

She has had one response from her ad on forsalebyowner.com. A recent offer came in at half the asking price and she rejected it.

Greg Healy, VP of operations forsalebyowner.com said his site "provides the consumer a choice to empower them, give them confidence, education and full information about marketing to help them sell their home on their own." The main reason people choose brokers is that they don't want to do all the work themselves, he said.

But sites like forsalebyowner.com and www.owners.com offer step-by-step guides for selling your house on your own. For example, www.owners.com provides information on the following topics:

 • Deciding to sell "FSBO"
 • Pricing Your Home
 • Preparing your home for sale
 • Marketing your home to buyers
 • Holding an open house
 • Closing the sale

Other websites that have in-depth information and instructions on selling your house on your own include www.fsbo.com; www.homesbyowner.com; www.newyorkfsbo.com and www.Help-U-Sell.com. These sites will often help you find a local real estate attorney, who can walk you through the legal process of selling your home. 

Web Sites Cater to for-Sale-by-Owner Home Sellers  

Selling a home without a real estate agent can save thousands of dollars in commission fees, but it can also be a painstaking, confusing task.

Foregoing an agent, however, is easier these days thanks to Web sites that help homeowners advertise their properties on the hottest real estate portals and even walk them through figuring out how to price their home to sell.

Sites such as ForSaleByOwner.com, Owners.com and Fizber.com don't claim to supplant every service a real estate agent provides, but they and others come close to giving a seller's home the same online exposure as one that's marketed by an agent.

That kind of access comes at a price, often in the hundreds of dollars, and probably means the seller must settle for saving only half of the 6 percent cut of the sale that traditionally would be split between the agents for the buyer and seller.

On a $300,000 sale, that's $9,000. Not too shabby.

Still, the median sale price for a for-sale-by-owner property last year was $153,000, while it was $211,000 for sellers who used an agent, according to the National Association of Realtors.

Homeowners who sell their property on their own may not always tap the pool of buyers that an agent can in the open market, which could reduce the range of offers. Another factor is that, in many cases, for-sale-by-owner transactions are between people who knew each other in advance, such as family or acquaintances, which could also lead to a below-market price.

That hasn't dissuaded many sellers from going it alone, however.

Historically, for-sale-by-owner transactions accounted for between 15 to 20 percent of the market. The figure tends to go up when the market is hot and it's easier for sellers to go it alone, and decline during a down market because there's a glut of unsold properties.

By-owner home sales have declined this year as a share of all home sales, except in urban areas, according to a survey by the NAR.

Web sites where homeowners can advertise their properties abound, one merely needs to search the phrase "homes for sale by owner" to find several examples.

ForSaleByOwner.com, Owners.com and BuyOwner.com are among the first to pop up in Google search results. But several popular real estate Web sites, including RealtyTrac.com, also offer do-it-yourself home sale tools.

The sites' features and charges vary, but they typically let users create an online ad with details about the home they want to sell, several photos and contact information.

RealtyTrac, for example, lets users post 10 photos of the property and include flyers, a report on sales prices of nearby homes and e-mails with the listing sent out to some 800,000 subscribers. The site charges non-members $59.95 a month to advertise a property.

Some sites, like BuyOwner.com, up the ante, offering to expose sellers' ads to more potential buyers by placing them onto Web sites like Google Base and Yahoo Real Estate, among others.

For $299, BuyOwner.com also throws in a few extras, such as access to a toll-free customer support line.

ForSaleByOwner.com, meanwhile, offers packages that range from $81 a month to a six-month plan for $809.

Many portals offer to advertise the property on the local Multiple Listing Service, which is a databases of homes for sale compiled by real estate agents. This option can cost hundreds of dollars, but can be worth the price because it exposes their home to agents working buyers.

That's because most homebuyers still hire a real estate agent to lead their home search, and advertising a property on a MLS ensures it is being seen by buyers' agents and picked up by Web sites that tap into MLS data, such as Realtor.com.

Greg Healy, president of ForSaleByOwner.com, says the Web site advises users who opt for access to the MLS to offer buyer's agent a commission, typically 3 percent of the sales price.

"We just try to be very honest that if you don't ... they won't come," Healy said, noting that sellers who want to save the full commission can do so by finding a buyer who isn't represented by a broker.

Bernard McMullan of Pittsburgh listed his three-bedroom house on the MLS through Owners.com.

"I probably had 20 people come and look at it within the first month of it being listed on the MLS," said McMullan, a police officer.

That brought in a few offers. But he ended up selling the house for $141,000 to a buyer who was not working with an agent, which enabled him to save on a commission.

"That was nice," McMullan said.

Such so-called flat-fee MLS packages are the best way for sellers to get the same exposure as owners with agents, says Steve Udelson, CEO of Owners Advantage LLC, which operates Owners.com.

"That's the gateway. That's the magic piece," he added.

Owners.com, which has about 100,000 homes listed for sale by owners, offers several plans, including one that's free and lets users post an ad on the site with one photo, which is then posted on Google and Craigslist. Pay plans range from $79.95 to $695, with the top-tier package featuring many other options, including a six-month listing on the MLS and Realtor.com.

And despite the portal's emphasis on homeowners selling their homes on their own, the priciest package offers sellers assistance from a real estate agent on certain tasks, such as pricing the home, closing the deal and other paperwork.

Just don't expect them to host your open house.

Sell Your Home on Your Own - Or, Get Help?  

CLICK HERE to view the TV news story on WSYX (ABC-TV - Columbus, Ohio)

TV Script Below
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We're headed into what real estate agents call the worst time of the year to sell a house. But, ABC6 On Your Side Problem Solver Tom Bosco is kicking off a week of real estate stories with solutions to get your house sold!

Getting started, should you hire a realtor or sell your house yourself?

Meet Julie Kennedy -- a homeowner acting as her own real estate agent.

"Ultimately, (I did it) just to save a little money and to try and have more of a down payment for the next house," Kennedy said.

Over the last few months, she's done all of the work, including e-mailing more than 300 agents about her home.

"It wasn't hard, but it was time consuming," she said.

To that end, Julie got some help. She paid ForSaleByOwner.com a fraction of what she'd spend in commission. For up to $800, the Web site helps price homes and get them listed on the multiple listing service, or MLS, that agents use.

10 Tips for Selling Your Home in the Sluggish Winter Months  

While many Americans can't wait to cook their turkeys and decorate their Christmas trees, anyone trying to sell a home in the coming months will have an entirely different perspective of the holidays. More than three years after home prices peaked, sellers are still facing an unaccommodating market. On average, it takes between seven and eight weeks to sell a home these days. That's up sharply from four to five weeks back in September of 2005, according to the National Association of Realtors. But the real estate market's seasonal pattern will insert an additional hurdle in front of home sellers this winter. Since many home buyers with children plan their purchases around the scholastic calendar—starting their search in the spring, signing a contract in the summer, and moving in by late August—sales activity tends to erode as the days grow colder before bottoming out in January or February. That means anyone selling a home over the holiday season will have more than just long lines at the mall to contend with. Here are 10 tips to help sellers get the best deal they can during the sluggish, off-season housing market:

1. If you can, wait: With the dynamics of the national housing market heavily favoring buyers, those in a position to postpone their home sale—even for a few months, until the spring—should consider doing so, says Guy Cecala, the publisher of Inside Mortgage Finance. "If you are really looking for top dollar and what people got a couple years ago, don't even bother putting it on the market," Cecala says. "And there are a lot of people who are making that decision."

2. Know your local market: Nothing will affect the outcome of your home sale more directly than its price tag. But in order to determine an appropriate price, you've got to know the ins and outs of your local real estate market. Truth is, all those stories about the national housing slump aren't nearly as important as the developments going on right in your neighborhood. So sellers should do everything they can to take their local market's pulse: read the real estate section in the local newspaper, click through a good housing blog that covers the area, check out nearby homes that are for sale: How much are they selling for? How long are they staying on the market? Here is where a real estate agent with experience in that local market can be a big help. "You can't just look across an entire marketplace and say, "Here is my metro area, and here is what's happening,' " says Keith Gumbinger of HSH.com, a publisher of mortgage and consumer loan information. "You have to try to attenuate yourself with what is happening in your very individualized local market." In addition, take note of any nearby foreclosed properties, as well as changes to the local economy that could alter future housing demand.

3. Price aggressively: Once you've got a handle on local market conditions, it's time to price the property. In so doing, be aware that today's buyers are demanding bargains. "The market is very impatient and unforgiving on high-priced houses," says Ron Phipps, a broker with Phipps Realty in Warwick, R.I. "If you are priced over the market, it is unlikely that anything will happen." That means you might have to list the property at 10 to 20 percent—depending on your local market, of course—below what you think it is worth, Cecala says. "Properly priced houses—i.e., discounted houses—are getting snapped up, and people will even bid on them," Cecala says. "If you are trying to capture what you saw [in home prices] two or three years ago, you may not be able to see that for five or 10 years. And people don't seem to accept that."

4. Negotiate your broker's commission: Since you may have to list your home for lower than you would like, it's worth asking if your broker is willing to accept a reduced cut as well. Broker's commissions averaged 5.20 percent in 2008, according to a March 2009 ForSaleByOwner.com analysis. And by handing a smaller cut to their agent, sellers can help soften the blow of the sluggish market. "You want to negotiate your commissions beforehand, especially if you are already pricing very aggressively," Gumbinger says.

5. Get preinspected: With the economy staggering under the weight of 10.2 percent unemployment, home buyers aren't walking around with a lot of cash for home repairs. That means homeowners need make all major repairs before putting the property on the market. To determine what repairs are needed, sellers should have a home inspector evaluate the house, says Judy Moore of Re/Max Landmark Realtors in Lexington, Mass. "In today's market . . . you can lose a sale over the silliest things after a home inspection," Moore says. "And it's not necessary if you get it taken care of beforehand."

6. Dress the outside: Would-be buyers won't want to see the inside of your home if the outside isn't appealing. So sellers need to make sure their property projects a warm and inviting feeling to anyone who passes by. "Part of the way that [buyers] make that instant decision [to purchase a home] is the condition of it when they first come up to the house," says Pat Lashinsky, the president and CEO of ZipRealty. So repaint the front door, trim the hedges, and mow the lawn. "You are going to want to fix doorbells," Lashinsky says. "A lot of people just have a sign on their door that the doorbell doesn't work. That's just a small sign that things haven't been fixed at the home."

And as we head into the winter months, sellers should be sure to remove any ice or snow from walkways whenever buyers visit. "What is so important is keeping the sidewalk safe, a lot of rock salt, or whatever it takes," Moore says. "If you have a steep driveway, it's got to be cleared and sanded or whatever you normally do to make sure it is safe, because safety is the utmost concern, especially during the winter season."

7. Let it shine: With the days growing shorter, sellers need to be mindful of keeping their home well-lit even when they aren't present. Sellers often head out to work without making arrangements to have their lights turned back on when it gets dark, Lashinsky says. "If someone was to come by and see their house at 5:30, everything looks dark," Lashinsky says. "If you are going to be selling your house, you want to make it as light as possible so that it is engaging and inviting and it brings people in."

8. Make it bigger inside: Sellers, of course, need to make sure the home's interior is immaculately clean and decluttered whenever it's being shown to potential buyers. Sellers should also remove all family photos from the walls in order to make it easier for buyers to envision themselves living there. At the same time, sellers can make their home appear larger by removing certain furniture items. "If you have oversized furniture that's really comfortable—you have that great La-Z-Boy—you might want to take it out when your home is on sale to make the rooms look bigger," Lashinsky says.

9. Be flexible: In understanding the current dynamics of the market, sellers should be prepared to entertain all bids—even those they consider too low—and perhaps toss in perks to get the deal done. "It is absolutely a buyer's market; [buyers] don't need you as badly as you might need them," Gumbinger says. "You may have to be more flexible than you might prefer in terms of price. You might have to be flexible in terms of concessions to help pay a buyer's closing costs and things of that nature."

10. Be professional: Although it can be difficult to do, property owners should remember that above all, selling one's home is a business transaction. Some sellers will say, "'I know the market is soft, et cetera, but this is my house and my house is special,'" Phipps says. "Unfortunately, every seller has that feeling." Sellers need to do their best to emotionally detach themselves from the property. "While it is your home, you need to treat this as a business decision," he says.

Getting Serious About Your Home and the Market  

When Matthew White, a landscape architect, decided two years ago to sell his 1,300-square-foot apartment in Philadelphia, he knew real estate prices were plummeting. Nevertheless, he thought he could get $760,000, about what he had paid two years earlier, because he had made many improvements to the space, an airy penthouse with two verdant terraces.

“It’s an incredible property, with spectacular views,” he said. Within a month, he got what he considered an “insulting” bid of $525,000. Five price reductions later, he wishes he had taken that offer. “I wasn’t realistic about what I could get,” said Mr. White, whose apartment is currently listed for $449,900. “It is such a special place, but now I realize that doesn’t matter during a recession.”

Even in the best of times, it’s hard for individuals to objectively value their homes, which often reflect their sense of self and personal style. Making things even more difficult has been general market inactivity lately, if not paralysis, which has provided little in the way of pricing guidance. But by using online resources, investigating neighborhood trends, consulting real estate experts and perhaps even asking the opinions of brutally honest friends, homeowners can arrive at a reasonably accurate appraisal even in these uncertain times.

A good place to start is your local tax assessor’s or county clerk’s office, many of which post real estate transactions on their Web sites. Links can be found at onlinedetective.com (parts under construction) and netronline.com. Those records will tell you what has recently sold in your neighborhood and for how much. Look for comparable homes with similar features and square footage.

Be aware that prices may not always totally reflect reality. “The house could have been sold to a sister or been part of a larger transaction,” said Dean Gatzlaff, a professor of real estate investment and urban economics at Florida State University in Tallahassee, like maybe a 1970s Eldorado convertible was thrown into the deal.

People living in “nondisclosure” states (Alaska, Idaho, Indiana, Kansas, Louisiana, Maine, Mississippi, Missouri, Montana, New Mexico, North Dakota, Texas, Utah and Wyoming), where the sale prices of homes in most jurisdictions are not public information, have to approximate by looking up mortgages on transferred deeds of trust and factoring in typical down payments and interest rates. In any event, don’t trust tax appraisals, as they are notoriously inaccurate.

“Look for sales within the last two to three months if there are any,” said David Kupfer, a real estate agent with Keller Williams in Phoenix, where prices in some neighborhoods have fallen as much as 50 percent in the last two years. “Six months ago is obsolete,” he said, because markets have been changing so rapidly.

Indeed, real estate agents and appraisers from Manhattan to Menlo Park said they now consider sales figures older than six weeks unreliable. Other sources of information are free online home value estimators on sites like zillow.com, trulia.com and forsalebyowner.com. But these derive some of their information from public records, including tax appraisals, and are thus subject to error. A test of those sites using various residences nationwide provided valuations that ranged from exactly right to incredibly inflated. Most estimates, however, were within the rough range of reality.

Compare the estimates with prices of homes on the market now. “These are your direct competition even if the homes are foreclosures” or fire sales by distressed home builders, said Jim Amorin, a real estate appraiser in Austin, Tex., and president of the Appraisal Institute, a trade organization. “That’s hard for a lot of people to accept,” he said, when their homes weren’t abandoned, repossessed or otherwise forsaken.

Leonard Calandriello, a retired banker in Chandler, Ariz., said he felt “entitled” to $500,000 for the 1,975-square-foot town house he bought new in 2007 for $470,000, then upgraded with enhancements like plantation shutters and a travertine patio, spending another $30,000. But with nearby foreclosures and the developer of his community cutting deals, he has had to reduce his asking price twice since May, to $399,000. “We may have to come down more,” he said. “Psychologically it can really get you down.”

Real estate experts recommend that homeowners do as Mr. Calandriello did and attend nearby open houses to see how their homes compare in size and amenities. But be realistic about what truly adds value and perhaps consult the Marshall & Swift Residential Cost Handbook, which professional appraisers use to assess how much, say, a fireplace or three-car garage is worth. The $300 tome is available in some business school libraries, but you can also pay $10 to use the SwiftEstimator at swiftestimator.com, which lets you do an item-by-item calculation of the value of your home.

The attractiveness of construction and design elements is subjective, so experts said it might be as meaningful to poll your most straight-talking friends. “You may love your new sauna and think it’s a wonderful and attractive feature, but someone else may not care, or even think they need a deduction so they can rip it out,” Mr. Amorin said.

That’s a lesson that Michel Shanks, a financial adviser, learned over the last year as she and her husband, Rick, a lawyer, tried to sell their 4,000-square-foot Mediterranean-style house in Bellaire, Tex., a suburb of Houston. Against the advice of their real estate broker, they listed their home for $825,000, more than the prices of nearby homes.

“You’re emotionally attached, so you think your home is worth more,” she said. “I had a landscape service and a Sub-Zero refrigerator and an icemaker on every floor, but buyers don’t care, they want deals.” The house eventually sold last February for $605,000 after 10 months and four price reductions.

Indeed, real estate experts said the only things that command premiums these days are location, light and space. “These are immutable, everything else can change,” said Carey Adina Karmel of the Corcoran Group in New York. Even so, she said, these attributes are not worth what they once were: “Sellers have had to lower their expectations, and it’s painful.”

Seeking pricing advice from real estate agents or paying $250 to $500 for a professional appraisal are options. But know their respective biases. “The Realtor has the incentive to start high to get a bigger commission, so if you are not in a rush to sell and can accept having to lower your price later, then go with the Realtor’s price,” said Karl Case, a professor of economics at Wellesley College and a founder of the Case-Shiller home price index. “Appraisers are worried about getting sued for inflating prices, as we saw leading up to the mortgage meltdown, so their natural bias now is to quote low. So if you want to be realistic, go with their estimate.”

In the end, the value of a home is the price the buyer is willing to pay. It’s chance, circumstance and psychology as much as location, square footage and design that ultimately determine the price someone will pay for your house.

“Your home is where you live,” said Kathy Wetmore, a Houston real estate agent, not an investment with a guaranteed return. Recalling several boom and bust cycles in her 22-year career, she added, “You make money in business, not in real estate.”

Target first-time buyers when selling a home  

Written by NorthJersey.com

 

Sellers would be wise, real estate experts believe, to target first-time buyers while their home is on the market. First-time buyers have accounted for roughly 50 percent of all monthly home sales of late, according to the National Association of Realtors, after waiting patiently for prices to come down to more affordable levels. The historical average, according to the association, is more like 35 percent.

 

"First-time buyers are skeptical of buying homes that need improvement," Eric Mangan, of ForSaleByOwner.com, has noted.

 

In fact, supporting that view, The Wall Street Journal reported that nearly half of brokers polled for a recent Coldwell Banker survey found that while affordability was foremost on first-timers' minds, 81 percent said "move-in conditions" were very important, too.Sellers should be mindful of a few factors in order to successfully attract first-timers to their home.

 

Closing costs

 

While a lot of the sales action has been fueled by the federal government's tax credit of up to $8,000 for first-time buyers, they are still responsible for paying the closing costs. Offer to cover it for them before they even think to ask.

 

Home warranties

 

Odds are these are renters used to calling their landlords to fix anything that goes wrong in their apartments. Giving them a home warranty covering major issues could go a long way toward easing any of their jitters about homeownership.

 

First impressions

 

Remember how important move-in conditions are? Well, in a tough housing market, more than just a fresh coat of paint or neatening of rooms is required. In fact, experts recommend improvements such as adding a new roof to enhance the value of your home. (NAPSI)

Four ways to attract a first-time buyer  

Dejan Djordjevic figures years of declining home prices make this fall a great time to find a good deal on his first home.

“The low prices are certainly a draw,” said Djordjevic, a 25-year-old sales assistant who wants to buy a loft-style condo in Boston or East Cambridge.

Djordjevic is one of thousands of first-time home buyers who are looking for deals this fall as real estate’s key autumn-selling season gets under way.

After all, prices have fallen, mortgage rates are low and first-time buyers who close by Dec. 1 can qualify for up to $8,000 in special federal tax credits.

Still, brokers warn that selling any home remains challenging in today’s market.

Here are four ways to make properties appeal to first-time purchasers this fall:

Maintain and stage. A well-cared-for property will stand out from all of the vacant or foreclosed properties that are on the market these days.

“If someone is living there, the landscaping is not dead - there is warmth in the home,” said Chuck Whitehead, a California real estate agent. “It’s all about the emotion, of (giving buyers) the ability to see what they can have.”

A 2008 Coldwell Banker survey found that 81 percent of agents think move-in condition is “very important” to their first-time-buyers. By contrast, just 7 percent said first-time purchasers want inexpensive “fixer-uppers.”

“First-time buyers are skeptical of buying homes that need improvement,” ForSaleByOwner.com’s Eric Mangan said. “Sellers (must) make sure that their home showcases very well.”

Experts recommend maximizing your property’s appeal to first-time buyers by adding fresh paint, minimizing clutter and eliminating any unpleasant odors.

“You have to do everything reasonably in your means to make the place attractive: painting, clean-up, touch-up, trash removal - everything,” said Djordjevic’s agent, Dave Gaviglio of Just In Boston Properties.

Offer to pay closing costs. There’s a good chance that buyers in today’s soft market will expect sellers to pay some or all of a deal’s closing costs.

So, Florida real-estate agent Heather Joubran recommends being proactive, touting closing-cost assistance right in your home’s listing sheet and other marketing materials. Another good idea: Paying “points” to bring the buyer’s mortgage rate down.

Throw in a home warranty. Most first-time buyers currently rent, which means they’re used to simply calling landlords whenever maintenance problems arise.

To help these house hunters transition to home ownership, offer to buy a purchaser a “home warranty” that covers your property’s major systems.

Don’t snub low offers. House hunters know that real estate is hurting, so they’re being very aggressive when bidding on homes - sometimes too aggressive.

However, experts say sellers in today’s slow market shouldn’t automatically scoff at lowball offers.

After all, someone who likes your home enough to bid on it is probably a person you can negotiate with.

“My rule of thumb is that every offer deserves a counteroffer,” Joubran said. “At least counter them back - it gets the conversation going.”

How To Sell Your Home To A First-Time Buyer  

A federal tax credit of up to $8,000 is nudging many Americans into buying a home for the first time, good news for those trying to sell one.

Still, selling a home isn't easy in most markets today. To get the typical first-time buyer to bite and submit an offer, a house has to stand apart from the competition - and there's a lot of it, including foreclosure homes that are selling at hefty discounts.

One big thing working in favor of the traditional seller: A lived-in, maintained home is easier for buyers to imagine themselves living in than a vacant foreclosure. That has great appeal for someone buying a home for the first time, for practical and financial reasons.

"First-time buyers are skeptical of buying homes that need improvement. Sellers certainly don't need to remodel the kitchen, but they want to make sure that their home showcases very well," said Eric Mangan, a spokesman for ForSaleByOwner.com.

In fact, while nearly half of brokers polled for a Coldwell Banker survey last year found that affordability was the No. 1 concern for first-time buyers, 81% said move-in conditions were very important to these buyers. Only 7% said first-time buyers were looking to purchase fixer-upper homes that they could buy on the cheap and renovate.

Those feelings are likely just as strong today as lenders generally require larger down payments, unless the mortgage is backed by the Federal Housing Administration. Higher down payments means buyers have less cash left over for improvements, said Leslee MacKenzie, of Coldwell Banker Hickok & Boardman Realty in Burlington, Vt.

"They're doing what they can to save for the down payment," she said, and that will deplete some of the funds a home buyer would have for repairs. "They're concerned about out-of-pocket expenses upon taking ownership."

While foreclosures that are in severe disrepair can be a huge turnoff for a first-time buyer, some banks will make improvements to their foreclosure stock, fixing them up so that they meet FHA standards and a buyer's needs, said Chuck Whitehead, of Coldwell Banker Associated Brokers in Southern California. These homes can be stiff competition for the rest of the for-sale inventory.

Never fear, there are still ways to outshine other homes on the market. Assuming you've priced the home correctly, here are five ways to lure a first-time buyer:

1. Maintain and stage

A home that has been taken care of throughout the years will offer a stark contrast to a vacant, empty foreclosure.

"If someone is living there, the landscaping is not dead," Whitehead said. "There is warmth in the home," and that can go a long way in selling a property. "It's all about the emotion, of having the ability to see what they can have."

As with any home, a fresh coat of paint, decluttering and the removal of unpleasant odors can go a long way to making a good first impression. But be careful not to over-improve the home, because the investment might not be worth the cost.

2. Mention up front that you'll help pay closing costs

Whether it's in the marketing material or in the listing, this could be an extra motivator to reel a buyer in. Generally, there's a good chance they'll ask for closing cost help anyway, but it might pay off to be proactive and offer it at the beginning, said Heather Joubran, a real-estate agent with Re/Max Central Realty in Lake Mary, Fla.

If rising mortgage rates have your buyer spooked, consider paying mortgage points to bring the rate down, Mangan said. But consider a buyer's timeline for staying in the home before deciding if this is the most effective way to help; paying points generally makes sense for those staying in a home for more than a few years.

3. Offer a home warranty

First-time buyers are often coming from a rental, and they are used to calling a landlord when there's a problem. To help them more easily transition into homeownership, provide them a warranty that covers major systems when problems arise, Joubran said.

4. Offer mortgage protection

In some cases, it might make sense to address buyers' fears by purchasing insurance so they can keep up with their mortgage even if after losing a job. Coldwell Banker has such a program through its parent company, Realogy.

Basically, the plan will make several months of mortgage payments in the event that the buyer becomes unemployed. "There are people with secure jobs who are still nervous. This can give them just a little more comfort," MacKenzie said.

5. Don't snub low offers

Buyers know prices have fallen, so they're being aggressive in their offers - sometimes extremely aggressive. But even if they come in with a shocking lowball offer, don't scoff at it. Understand where they're coming from, and try to compromise.

"My rule of thumb is every offer deserves a counteroffer," Joubran said. "At least counter them back. It gets the conversation going."

If they liked the home enough to make an offer, it's possible you can arrive at a mutually acceptable price, she said.

Rising mortgage rates could spur undecided buyers  

Mortgage rates took a big leap this week, causing many to wonder if the days of extremely low mortgage rates are coming to an end.

The 30-year fixed-rate mortgage averaged 5.29% this week, up from last week's 4.91% average, according to Freddie Mac's weekly survey of conforming mortgage rates.

Rising government debts and hopes of economic recovery are pushing up long-term interest rates on government debt, said Brett Arends, in a recent piece for The Wall Street Journal. And that pushes up rates on other long-term loans, he added. The rise in rates could continue, and that will affect those searching for a new home.

The rate jump could very well be a deterrent for those buyers on the fence. Or it will motivate people to make a move, instead of waiting for financing costs to grow more expensive.

"If they're reading the same reports I'm reading, they're seeing that rates will go up more than they will go down," said Eric Mangan, spokesman for ForSaleByOwner.com. "That may motivate buyers to get off the sidelines," he said.

Read more about mortgages in this week's real estate pages, as well as an audio report from an economist who believes that home sales probably bottomed earlier this year.

There's no way to know for certain the direction mortgages are headed in the short term. But those in the market for a mortgage should think about acting soon, because when rates stay near record lows for months, eventually the only direction they can go is up.

Rent-to-own your home: Pro and con  

It's tough for buyers to find financing and hard for sellers to find buyers. A solution that can work well for both is renting with an option to buy.

NEW YORK (CNNMoney.com) -- With buyers scarce and financing tight, some home sellers are offering rent-to-buy options to potential buyers. In fact, there's been enough of a spike in interest that ForSaleByOwner.com added it as a search option on the site, says spokesman Eric Mangan.

These deals, also called rent-to-own and lease-option, usually require buyers to pay extra rents each month plus up-front fees of about 5% of the purchase price. The regular rent then goes in owner's pocket (presumably to pay the mortgage), but the additional payments are used to buy down the price of the home.

"Lease option agreements, if properly drafted, by and large are an effective way of enabling people to buy who are having trouble arranging financing or coming up with down payments," said Lawrence Jacobson, a real estate attorney in Los Angeles.

The Advantages

Because the contract is typically written to close in 12 to 36 months, it gives buyers the chance to experience homes and neighborhoods without having to make major commitments.

But the biggest reasons buyers opt for rent-to-buy deals are to build up down payments and to improve their credit profiles so obtaining a mortgage is easier.

For example, if they buy a $200,000 home, paying $5,000 up-front and a rent premium of $400 a month on top of their $1,000 market rent that, they'll have $9,800 saved after one year and $19,400 after three.

In New York City, condo conversions are increasingly offering the option after having units sit empty. For example, the developers of a former commercial building on Wall Street are offering to apply 100% of "buyers" rents toward the purchase prices. And there are no up-front fees.

It's a luxury building with prices starting at $630,000 million for a studio to $8.4 million for a four-bed penthouse. Sales were slow because buyers were having difficulties arranging financing, according to sales director Larry Kruysman.

"What we were finding from customers was that banks were making it more difficult to purchase," he said. The lenders were asking borrowers to put up 30% of the purchase price to obtain a mortgage rather than the traditional 20%.

But most rent-to-buy offers are from individual sellers, often people who have purchased new homes, can't sell their old ones and need to offset some of their mortgage costs.

Renee Haworth, a Louisiana homemaker, tried to sell a house in Mandeville, La., for many months without success.

"We had two or three buyers ask us if we would do a lease option," she said. "We hadn't thought about it before that."

She consulted an attorney and made a deal this past March. It calls for a sale price of $217,000 for the four-bedroom two-and-a-half bath house. The buyer put $3,000 down and pays $1,400 a month, $400 of which accumulates toward the sale price.

The renters agreed to exercise their option after 12 months. Under terms on their contract, if they decide to walk away, they lose both the $3,000 deposit and the $400 per month they pay over normal market rents.

The Drawbacks

But there are drawbacks to these deals. You need a good contract and a healthy sense of "buyer besmeared."

Losing your investment: For one, there's little protection for buyers who fall behind in payments. If you fall behind and are evicted, you lose any up-front fees and rent premiums you paid.

Can't get a loan: If you still can't arrange financing at the end of the rental period, you may have to forfeit all the extra cash you've invested. The terms for that scenario would need to be spelled out in the contract. In buyers' markets, you may have the leverage to get a contingency clause specifying any up-front fees and extra rent be returned if you don't qualify for a loan.

Falling home prices: Buyers may be hesitant to lock into a set price a year in advance considering how much home values are plunging. If the comparables are significantly more attractive when it's time for your deal to close, you can sometimes renegotiate, but that's at the seller's discretion. If renegotiating is impossible, then you have to decide whether it's cheaper to walk away or go through with the deal.

Foreclosure scams: Some renters have been burned by doing lease-option deals with owners who are going through foreclosures. After months of taking the inflated rent payments even though they are in foreclosure, the owners finally have the home repossessed by the bank and the renters are served with eviction notices and are out their investments.

There have also been instances of foreclosure-prevention scams in which fraudsters take title to homes and do lease-option deals with unsuspecting renters. Instead of applying the initial deposit and the extra rent money to the down payments, the scam artists simply pocket everything and disappear. Because the renters don't get a title to the property until they close the bank loan, they are again out their investments.

Walk aways: Pitfalls exist for sellers as well. Renters may decide to not exercise their options if prices fall. That can leave sellers with large paper losses by the end of the lease compared with if they had sold the home when they originally planned. They are also stuck carrying the costs of the home until they find other buyers or tenants.

Affordability

Most importantly, however, buyers must be cautious about entering into a deal that's unaffordable. The payment can seem manageable when you're just looking at the monthly "rent" payment. But there are more expenses than that.

First, the mortgage payment on a $200,000 home after paying $20,000 down, comes to more than $1,000 a month at the current very low interest rates, which are only available to borrowers with the best credit.

Over the past few weeks, rates have been creeping up again, so there's no guarantee they will be as low when the purchase is completed. Plus, credit-damaged buyers can expect to pay one or two percentage points higher at a minimum. That could add another $250 or more to the monthly bill.

Then add in private mortgage insurance, property taxes, all the utility and routine maintenance costs, and it could push the monthly payment past $2,000 - and affordability.

Going FSBO in a slow market  

Tough times can motivate, frustrate agent-less sellers

Four years ago, when Judy Cruz decided to try to sell her house on her own, it couldn't have been easier. She struck up a conversation with a neighbor who said he'd love to buy it from her. Deal done.

But when she decided to sell her Chicago condo this year, it was a different story.

"I tried advertising it online for four months," said Cruz, who explained that posting free classifieds on Craigslist were the sum of her efforts. "The only calls I got -- and I think there were just five -- were from people who wanted to know if I would consider rent-to-own."

That wasn't an option, so right after Memorial Day she gave up and listed the unit with an agent. Her for-sale-by-owner experiences are a familiar story line in housing's then-vs.-now saga, where time and effort have acquired new, sometimes painful meaning.

But "bottom line" has new meaning, too, considering home values have declined and the notion of milking every dime from a transaction has inspired many sellers to dig in their heels and go it alone to pocket the money they might otherwise have paid an agent.

So, even in a daunting down market such as this one -- or perhaps because of it -- the FSBOs are out there, amounting to perhaps 20 percent of all homes on the market today, by some estimates.

Money motivates

"In 2003, I could have sold this house in a heartbeat," said John Kerkam, who in May began advertising online for a buyer for his mountain cabin in Loudon County, Va., outside Washington, D.C. After one week, his ads had generated two calls, which he viewed as a good start.

He says his eyes are wide open to housing's changed picture. Although over the years the former contractor built and fairly easily sold three homes on his own, he expects the sale of his own residence could be a prolonged affair.

"In the fall, I'll probably pack it in for the winter if it hasn't sold," he said. "And then I may turn it over to a friend who's a real estate agent."

Or maybe not, once he runs the numbers. Saving the cost of an agent's commission motivates him because he needs to maximize his retirement savings, he said.

"That's their concept, trying to save the commission," said Palos Hills, Ill., agent Kathy Toscas, who said in her experience FSBOs lose money by spinning their wheels.

Pitfalls of flying solo

She recently has taken on listings of failed former FSBOs. She said where those homeowners tended to trip up -- when they did attract potential buyers -- was in the vetting process.

"The average FSBO is attracting people who aren't qualified buyers, or if they are qualified, they still have a property to sell -- and today, if a buyer has to sell their own property to sell first, forget it," Toscas said. "Or, they attract bargain hunters" who try to wheedle down the price too far.

So, in addition to asking hard questions about the qualifications of potential buyers, she says would-be FSBOs have to work hard to put the word out on the street, creating fliers and working the phones -- calling everybody they can think of to say, "My house is for sale -- do you know anybody who might be interested?"

"It's hard work," she says. "You have to promote the daylights out of it on a daily basis."

Other agents also say FSBOs have to be wary of running afoul of property disclosure and fair-housing laws and of contract wording.

Firm data on for-sale-by-owner properties is by its very nature difficult to collect and subject to many qualifications. The National Association of Realtors and companies that assist for-sale-by-owner properties long have sparred over it.

Crunching FSBO numbers

NAR data show that FSBO sales vary widely by region, from 10 to 26 percent of all sales last year. Overall, they accounted for 13 percent of sales, up from 12 percent in 2007 and 2008, which he said were record lows.

However, many such transactions are complicated to classify, as they aren't technically on the open market because they were between friends or relatives, according to NAR spokesman Walter Molony.

True open-market FSBOs accounted for 7 percent of transactions in 2008, which he characterized as a downtrend from 10 percent in 2004.

Eric Mangan, a spokesman for ForSaleByOwner.com, which offers online marketing services and information for sellers, contends that FSBO properties sell more quickly than agent-assisted homes. He said NAR's own research showed that in 2008, sellers in the open market sold their homes in a median six weeks vs. 10 weeks for agent-assisted sales.

He also said FSBO properties sold for more money, proportionately, than agent listings. Citing the Realtors' 2008 report, "Profile of Home Buyers and Sellers," he said the median agent listing sold for 96 percent of its asking price vs. 97 percent for FSBOs in the open market.

The NAR report, however, also said that agent-assisted sales netted a $204,900 median vs. $153,000 for all FSBOs.

Mangan contends that FSBOs are plentiful today.

"We rely on data from RealTrends (an industry research and information company) and we think 20 percent of the market today is FSBO listings," he said. "But not all FSBOs are equal," meaning that the aggressiveness of their marketing will make all the difference.

Do-it-yourself marketing

"Somebody just putting a for-sale sign in the yard or just a Craigslist ad -- they probably won't be successful," he said. "Ninety percent of buyers use the Internet to search for a home, so online has to be the centerpiece of their marketing strategy, and it has to be everywhere -- we tell people to advertise on Craigslist and we syndicate our listings to Yahoo, Google and CribFinder, the real estate application on Facebook.

"Then they have to go word-of-mouth, telling everyone at the PTA meeting and their neighbors. They do have to have yard signs, and those yard signs have to have a flier box," Mangan said.

But, Mangan agrees, the current market is a challenge that may turn out to be a learning experience to any FSBO seller who had an easy time of it a few years ago.

"This is one thing we're telling sellers: The biggest thing in a slow market is to be patient," he said. "That, and not to make it an emotional event -- to treat it like a business transaction."

Ryan Pilkington said he took that to heart when he posted his Lincoln, Neb., home at ForSaleByOwner.com in mid-February, paying the online company what he estimates at $200 to $300 for the online ad and various services.

"I didn't really know a lot about selling for-sale-by-owner until we decided to do it," he said. "I downloaded some of the information on the site, and there's a tutorial on the site on how to sell your house."

At first, he said, there wasn't much activity. Then he and his wife, Jennifer, dug in.

HGTV, fliers and a price drop

"I watched a lot of HGTV," he said, laughing. He took their shows' tips to heart, rearranging furniture and repainting the house's front door for more appeal.

He said they got a lot of phone inquiries and distributed "a ton" of fliers. Their open houses -- in all, about a dozen, he estimates -- got old, but the couple decided they were necessary. They got one offer that fell through because of financing issues.

"I didn't think to ask, 'Are you preapproved?' " he said. "We were going off his word that he was good to go."

Undaunted, they kept going on their own; they dropped the asking price from $139,900 to $138,000. In mid-May they got a solid contract for $136,000 from someone who had found the home online.

"Yeah, ideally, it would have been easier if we had had a real estate agent who could have done it for us," he said. "But the whole process wasn't bad, and eventually we got our objective.

"I'd do it again."

***

ForSaleByOwner.com offers money back guarantee  

The most popular American dream may still be home ownership but in the past year for many individuals, who now own a second home thanks to a troubled housing market, the dream has transformed into selling their own home.

While a simple yard sign from your local hardware store may have done the trick 10 years ago, the Internet is the new home for DIY home selling. The bells and whistles associated with a worthwhile online sales page for your house, while cheaper than an agent's commission, aren't free, which is why ForSaleByOwner.com has introduced a money back guarantee on its home listing services.

If you list your home on ForSaleByOwner.com and later decide you would be better off with a full service listing you can use the new referral program to get matched up with a Realtor in your area and get a refund on the money you invested in selling it yourself.

It's important to note that in order to get a refund you must connect with a Realtor through ForSaleByOwner.com and your home has to sell. But for anyone looking for a low risk way to try out the For Sale By Owner route this is it.

For additional help you can always read ForSaleByOwner.com's free ebook "The Complete guide To Buying and Selling Your Own Home," which will give you a good idea of what you're getting into before you purchase a listing package.

To learn more about the ongoing Realtor vs. FSBO debate be sure to read WalletPop's comparison of FSBO sites and our articles comparing the merits of using a Realtor and selling your own home.

Seller, Salesman: The Work, the Risks and the Rewards Behind That For Sale by Owner Sign  

When Kevin Colquitt decided to place his Gaithersburg townhouse on the market last month, he knew it would be tough. Prices in the neighborhood had fallen from the market's peak, and he faced competition from distressed sellers scrambling to accept lowball offers.

Colquitt, 37, not only has waded into one of the worst housing markets in decades, but he is also doing it without a real estate agent. He is gambling that he can save the $29,000 or so he would pay in real estate commissions if his home sells at its listed $485,000 price. "Even if it's a one-in-six chance that we can sell it by ourselves, it's a good thing," Colquitt said.

The foreclosure crisis and falling home prices have made it more difficult for owners to squeeze a profit from the sale of their homes. Some are trying to save by avoiding agent commissions. The agents representing the seller and buyer typically each receive about 3 percent of the selling price of the home, with the seller picking up the tab. While some sellers go the for-sale-by-owner route in strong markets and weak, the overwhelming majority of transactions involve agents.

Agents maintain that they earn their money. They bring a critical eye, identifying the improvements needed to make a home ready for sale and an expertise to setting the right price, argues the National Association of Realtors, which represents more than 1 million agents. Selling a home yourself is time-consuming, including developing a strong marketing campaign, according to the industry group.

Besides, said Walter Molony, a spokesman for the Realtors association, the commission can be negotiated. Some companies, such as Redfin, an online brokerage based in Seattle, offer sellers flat-fee $5,000 or $7,000 packages for selling help, including setting the price and negotiating the deal.

But for owners willing to put in the effort, the strategy can work, said Maynard Gottlieb, a real estate broker and the head of Mr. Lister, a Baltimore-based site aimed at the do-it-yourself crowd. The Internet has been an equalizer, allowing homeowners to gain extensive exposure for their homes, as well as research setting the proper price, he said. "People are pretty savvy today in being able to use the Internet to check the public records and to see what homes have gone for so they can price accordingly," Gottlieb said. "It's the same information they would get from a Realtor, but they do have to do their own homework."

Many home sellers in the Washington region are taking the challenge.

Colquitt plunged in despite failing to sell a home on his own before. In 2006, he listed his Las Vegas house himself, hoping to save a $15,000 commission. But after two months on the market with no offers, Colquitt hired an agent. Traffic immediately picked up, and the home sold quickly afterward, he said.

But the experience left Colquitt with some doubts about the process. The agent encouraged him to accept a lowball offer he was not comfortable with, he said. "I felt like in a way that he didn't have our best interest at heart; he was most interested in making a sale quickly," Colquitt said.

Now the stakes are higher as Colquitt, who will soon finish a law degree, plans a move to Dallas for a new job. The big commission is worth the extra work, he said. "It's a lot of money."

Before leaping into the market alone, owners should research a reasonable sales price and get help figuring out what kind of improvements to make, housing experts said. Comparing listing prices isn't enough -- sellers need to take into consideration sales prices, too, although those can take longer to track down.

There are some Web sites that can help determine the proper price, but the seller may still need a dose of reality about how his or her home stacks up against the competition. The seller can hire a home appraiser or use an online appraisal process, said Eric Mangan, spokesman for ForSaleByOwner.com. "The first thing a buyer looks at is the price. If you price it too high, you are going to scare people away; if you price it too low, you may lose money," he said.

Owners also must provide buyers with the proper disclosure forms about things such as lead paint and the home's physical condition. Real estate agents routinely give these to clients, but lawyers have them, too, and they're sold by various Web sites. Local and state governments provide many free. In Virginia, for example, the Department of Professional and Occupational Regulation provides forms on its Web site, http://www.dpor.virginia.gov/dporweb/reb_consumer.cfm. In Maryland, some forms are at the Department of Labor, Licensing and Regulation Web site, at http://www.dllr.state.md.us/forms.

Then there is the advertising: A simple for-sale sign in the lawn will not do. Some packages offered by ForSaleByOwner include the yard signs on top of exposure to many Web sites, including Yahoo, Google and Facebook. Some discount brokerages, such as Mr. Lister, will help homeowners put their listing on a multiple listing service used by real estate agents to search for properties.

Todd Gardner, a graphics designer, took more than a dozen photos of his Arlington condo, creating a virtual tour online. To make sure the listing got maximum exposure, he also paid to be included in a multiple listing service. He plans to advertise in The Washington Post as well as on a couple of Web sites. The first weekend on the market, despite intermittent rain, five potential buyers stopped by for a tour. "For a rainy day, and having it posted for just a day, it was a pretty good" turnout, he said.

But the extra exposure came at a price. Gardner, 46, had to agree to pay a buyer's agent a commission to be included on the multiple listing service. "If it's the right price and right buyer, I am willing to do it," he said.

Gardner said the proceeds from the sale of the condo, which he has rented out for the past six years, will be used to invest in his business and well as his wife's, a vacation cabin rental firm. "We could use those resources to expand our businesses, and our daughters are going to college soon," he said.

For some homeowners selling without an agent, the process can be a challenge. Davis Guthrie, a retired architect, admits some mistakes in his for-sale-by-owner strategy. He listed his two-bedroom Georgetown townhouse in September as home sales were slowing and priced it too high initially. That meant he had to cut the price by more than $250,000, to $919,000.

When he sold his house -- without an agent -- in 2006, it took three weeks and he received three full-price offers. That gave him confidence to try to do it again. But this time the housing market is tougher, and Guthrie's home is still unsold.

Still, Guthrie and his wife, who have retired to Miami, determined that the commission is an expense they cannot afford.

"We lost a whole lot of money in our retirement plan last year. It was a terrible year," he said. "We didn't feel we could give away $50,000 to $60,000 for the commission. We don't have that kind of flexibility anymore."

It has been a time-consuming process, and he has had to adjust his strategy.

The home is in pristine condition, but Guthrie, 65, relies on a neighbor to show the house to potential buyers when he is out of town.

He flies up from Miami most weekends to maintain the home and meet interested buyers.

"We are going to stick with it for another couple of months. If we don't get an offer, we may change strategy," Guthrie said.

The couple has already received an offer to lease the house for a year. But there is another alternative: Guthrie said he has a list of three agents he could call in a pinch.

Owner sales difficult in cold South Florida market  

The For Sale by Owner (FSBO) industry took a 12 to 13 percent market share of real estate transactions nationwide in 2006, but in a weaker economic climate, every sell is a tough one, and going it alone may not be worth it.

Regardless of whether an agent's 6 percent commission is at stake, South Florida remains one of the slowest markets in the nation.

Janice Leis, broker at Prudential Fox & Roach in Boca Raton, said a tough real estate market is no time for sellers to be penny pinchers.

"In a marketplace with a saturation of inventory, and a small window of opportunity seasonally, you want to stand out," which a good agent can do better than most do-it-yourselfers, she said.

A recent report from Real IQ and Altos Research said the typical home in Miami-Dade, Broward and Palm Beach counties sits on the market for 193 days. Chicago is the second toughest market behind South Florida. The average home owner there posts a "for sale" sign in the yard for 180 days.

But widespread price declines in South Florida -- as much as 40 percent off the 2006 market peak -- also mean sellers can fix on the price tag and the bottom line. There are plenty of options that now make it easier to maximize the final sale yield, said Eric Mangan, a spokesperson for ForSaleByOwner.com.

"Today's FSBOs aren't just using a yard sign or even an online ad to get their home sold. They are using tools like access to the MLS and Realtor.com," Mangan said. "Companies like ours are always adapting to new selling-buying climates by providing new tools and resources to help customers."

He said new data from the National Association of Realtors shows that the Internet continues to grow as a dominant information source for home buyers. NAR statistics found that 32 percent of buyers first saw the home they purchased on the Internet, up from just 8 percent in 2001.

The percentage of buyers who found their home through a real estate agent has dropped from 48 percent in 2001 to 34 percent in 2008.

NAR also found that people who go the FSBO route get closer to their asking price and sell more quickly than those who use an agent. And separate studies from Northwestern University and Stanford University found that FSBO sellers are as effective as agents in maximizing the sales price of their homes. After commissions, the universities report, FSBO sellers come out financially ahead.

Despite the marketing push and the credible statistics, local real estate brokers are reporting fewer FSBO signs in yards than in years past.

Leis, the Boca Raton broker, said a longer time on the market could prove more costly.

She sold her own home using a real estate agent, and priced the house below other recently closed transactions. It sold for 30 percent over the asking price, she said, because she was not emotionally involved. The realtor handled everything.

"FSBOs historically tend to know it all, are unavailable for showings, or if they are home they follow you around the property, pointing out the 10-year-old upgrade that is now completely obsolete," she said.

Christian Kawas, a realtor at Douglas Elliman Florida in Miami Beach, said he's seen less competition from FSBOs in the past quarters. In fact, his last few meetings with FSBO sellers typically lead to new listings.

"The most common trend that I have seen with FSBO is that they are much more open to sitting down with agents than in the past," Kawas said. "Owners are going at it alone for much shorter periods of time and then they are listing with a professional."

Buyers Becoming More Successful Finding Homes through Internet  

ForSaleByOwner.com hailed data from the National Association of Realtors (NAR) that shows the Internet continues to grow as a dominant information source for homebuyers. NAR statistics for 2008 found that 32% of buyers first saw the home they purchased on the Internet - up from just 8% in 2001. During the same timeframe, the percentage of buyers who found their home through a real estate agent has dropped, falling from 48% in 2001 to 34% in 2008.

Of all homebuyers, 87% used the Internet to search for a home in 2008, up from 84% in 2007, 80% in 2006, and 2% in 1997.

“Despite a slowdown in the housing market, real estate consumers have increased their usage of the Internet as their ‘go-to’ real estate information source in order to successfully find the home they purchase,” said Greg Healy, vice president of Operations for ForSaleByOwner.com. “This continues a trend where consumers are becoming more independent in the home buying process and are educating themselves about real estate issues.”

“The Internet is vitally important for marketing a home in today’s marketplace. Home sellers need to know that they can sell their homes without an agent, especially if they use the Internet’s full marketing power to attract the growing amount of buyers who go online to find their home,” added Healy.

ForSaleByOwner.com attracts nearly three times the amount of online visitors as its next closest competitor and offers services that also post customer listings to websites such as Realtor.com, Craigslist, USAToday.com, Yahoo Real Estate, Google Base and Facebook, among other sites.

Several recent research projects also contain information that can provide confidence to home sellers that they can sell their homes themselves. For example, NAR found that people who sell “by owner” get closer to their asking price and sell quicker compared to those who used an agent. Separate studies from Northwestern University and Stanford University found that “by owner” sellers are as effective as agents in maximizing the sales price of their homes and, after commissions, come out financially ahead. The September 2008 issue of Consumer Reports magazine reported that FSBO sellers are more likely to get their asking price while agents deliver, on average, a sales price that is $5,000 less than the original asking price.

Where home buyers found the home they purchased- 2001 vs. 2008:

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How to Sell Your Home Without a Realtor  

With prices falling so far so fast in the residential real estate market, homeowners these days are looking to eke out as much profit as they can from the sale of their home.

Yet, with the record inventory of available properties, they can’t just raise their price.

Enter: For sale by owner (FSBO)

By cutting out the middle man and selling your home yourself, you could walk away with tens of thousands of dollars more in your pocket. It just takes a little marketing know-how and a lot of entrepreneurial spirit.

“A lot of people who are selling right now are doing so because they’re changing jobs or changing lifestyles and they’re selling by owner because they know it’s going to immediately save them 5-6 percent on commission costs,” says Eric Mangan, a spokesman for ForSaleByOwner.com, a sell-by-owner listing service. “In today’s market, where prices have dropped by double digits in some cases, the cost of using a realtor is that much more expensive.”

Indeed, without a real estate agent you could lower your asking price by up to 6 percent to comparable listings in your community and help sell your house faster.

Better yet, leave your price on par and pocket the commission that would normally go to the realtor. (On a $350,000 house, a 6-percent commission is $21,000.)

Who's Doing It

Despite the financial incentive and growing access to online listing services, the FSBO (pronounced "fizzbo") market has been trending down from a high of 19 percent of the market in 1997 to roughly 13 percent today, according to the National Association of Realtors (NAR).

Some 81 percent of home sellers still use full-service realtors, 9 percent rely on limited service providers, including discount brokerages and the remaining sellers, and roughly 9 percent use minimal service (including FSBOs and those who pay only for the use of an MLS).

It’s worth noting, too, that some 40 percent of sales in that "minimal service" market are completed as a closed transaction, meaning the buyer already knew the homeowner as a friend or family member.

According to NAR's Walter Molony, the majority of homeowners still rely on agents because their home is often their largest asset and they want an experienced professional on hand to protect their interests.

Indeed, some homeowners still require the help of realtors to sell their home. Among them: those who can’t be physically on site to show their property and those not comfortable selling or promoting their houses.

While the real estate recession has some homeowners wary of selling solo, however, Mangan maintains the sell-by-owner strategy is actually easier than most homeowners imagine—and makes more sense today than during the boom.

“It takes education about your local real estate marketing, including recent sales activity and some knowledge of what’s currently on the market,” he says. “Other little things are more important today, too, like being more flexible with a buyer’s closing time frame.”

If your buyer needs to close within 30 days and you’re not ready to move, find an apartment and store your furniture. Be prepared to do whatever it takes.

The housing slump, of course, also makes it more important to market your home effectively.

Above all, that means listing your house for a fair price.

It’s easy enough to find out what your home is worth. Sites like realtor.com, zillow.com and homegain.com can help you review comparable real estate listings available in your neighborhood.

You should also ask a realtor or two to stop by for a comparative market analysis. They don’t charge for the service, you can be honest about your intent to sell-by-owner (they’ll be waiting if it doesn’t work out) and they might even give you some good ideas on quick fixes to help you sell faster.

Once you’ve arrived at a fair market price, you can either list for that amount or, considering the growing inventory of available homes, discount your price just enough to position your property as a bargain.

For example, if your home would normally list for $450,000 with a realtor, consider lowering your asking price by 3 percent to $436,500. If you’re really eager to sell, you could reduce by 4 percent and sell for $432,000, while still coming out ahead.

What You May Need

Even a well priced home, however, isn’t going to move if buyers don’t know it exists.

Ads in the local newspaper, which cost as little as $25 per month, can be surprisingly effective, considering a large percentage of buyers across the country upgrade into homes within their existing community.

But you’ll have better luck if you pony up for a listing service, which publishes the specifics of available homes to realtors and potential buyers.

Packages priced at $229 and up also include a yard sign kit, access to a consultation line and automatic syndication of the listing to the real estate sections of partner websites like Google, Yahoo and USAToday. Higher-priced packages, which run as high as $809, also include a listing on Realtor.com and on the MLS.”

ByOwner.com, meanwhile, charges from $300 to $400 for its listings, which will remain on the site until sold.

Both companies provide yard signs, printable flyers and instructional material to help you prepare, price and negotiate the sale of your home.

Screen, screen, screen

With banks continuing to tighten their lending restrictions, it’s more important than ever to get your buyers prequalified or preapproved.

As the seller, you should demand a pre-approved mortgage letter with any written offer potential buyers make.

And, as with any real estate transaction, don’t forget to work with a lawyer or title company during the closing, to ensure both you and the buyer have a legal representative who understands the process and is looking out for your best interests.

The Downside

Before you set out to save a buck, of course, there are some potential disadvantages to consider.

For starters, there’s the added time commitment of showing your own home. (If you’re at work, you may miss a sale.)

You may also feel uncomfortable opening your home to just anyone—whereas a realtor is bringing only bona fide potential buyers to your door.

Realtors also, of course, handle all the paperwork, provide legally binding contracts that account for local disclosure ordinances and know which lender to direct your low credit score-buyers to when their financing goes sour.

Finally, because they are exposed to a wider audience of potential buyers, some would argue agents may be able to obtain a higher sales price for your home, which can offset some or all of their commission.

A 2008 survey by NAR found the median price for sellers who used an agent was $211,000, while homes sold directly by the owners fetched closer to $153,000.

(Molony notes, however, the significant price spread in the most recent survey was partly due to the fact that FSBO properties were more likely to be in rural areas, and more likely to be manufactured or mobile homes. That suggests the homes might be worth less to begin with, he said.)

A smaller survey by Northwestern University of all homes sold in Madison, Wisc. between 1998 and 2004 found those who joined a for-sale-by-owner Website got as least as much for their homes as sellers who either used an agent or the MLS.

The study shows that FSBO sellers ended up with a "significantly enhanced net sale price because they didn’t have to pay the brokerage commission that real estate agents charge sellers, generally 6 percent of a house’s sale price," the summary report said.

It did find, however, that homes sold through the MLS were more likely to sell faster—20 days faster on average. (And that was during the real estate boom.) It also found that over 20 percent of FSBO listings did not sell by owner, and ultimately had to list anew on the MLS.

The increased time to sell can be tough to swallow for homeowners who are carrying two mortgages at once.

If your home sits too many extra months on the market, of course, it would have been cheaper to simply hire an agent and cough up the commission.

Yet, despite the potential drawbacks, the cost benefit of selling your home on your own makes it worth considering if you can afford to wait for a buyer, are prepared to market your home effectively and aren’t afraid to do the legwork yourself.

Commissions down $12B in 2008 - NAR takes issue with ForSaleByOwner.com findings  

Full-service real estate agents and brokers collected an estimated $46.6 billion in commissions in 2008, down 8.6 percent from the year before and 34.6 percent from a peak of $71 billion at the height of the housing boom, according to an analysis by ForSaleByOwner.com.

The analysis relied in part on sales and home price data from the National Association of Realtors, which questioned ForSaleByOwner.com's findings and
its claims that the numbers show declining home values have made real estate commissions "a luxury" that sellers cannot afford.

While few would dispute that total commissions paid to real estate agents have sagged during the downturn in concert with sales and prices, there's
some disagreement over exactly how much commission revenue has fallen, and why.

ForSaleByOwner.com provides services including advertising and property pricing reports to sellers who choose to represent themselves rather than
list a home with an agent.

The company also contracts with licensed real estate brokers to place clients' homes in multiple listing services (MLSs). ForSaleByOwner.com's claim to have "direct access" to Realtor.com last year was called "misleading to both consumers and the Realtor community" by parent company Move Inc. (see story)

In its analysis of 2008 commissions, ForSaleByOwner.com relied in part on data from NAR showing that home sales fell 30.6 percent last year from their
2005 peak, to 4.9 million units, and that average sales price dropped 9.4 percent from a 2006 peak of $268,200.

Since commissions are typically based on a home's sale price, it follows that a drastic reduction in the number of sales and sales price would put a dent in total agent and broker revenue.

But the average commission rate on home sales has been making a comeback in recent years. After falling from 5.42 percent in 2000 to 5.02 percent in
2005 as home prices shot up, the commission rate has since rebounded to 5.2 percent in 2008, according to data from market intelligence company Real
Trends that ForSaleByOwner.com used in its analysis.

"With home prices falling across the country, losing another 5 percent or more in the form of a real estate commission is simply a luxury that today’s
sellers cannot afford," ForSaleByOwner.com's Greg Healy said in a statement.

NAR spokesman Walter Molony said ForSaleByOwner.com's analysis contains too many assumptions to produce a reliable estimate of commissions paid to
agents and brokers, and doesn't justify the company's claims.

Commission rates tend to be negotiable, and fall into a range that's tied to home prices and the cost of doing business in a given market, Molony said.
In general, commission rates are lower in high-cost markets -- where the costs of marketing a home represent a smaller fraction of its sales price --
and higher in low-cost markets, Molony said.

While the Real Trends data used by ForSaleByOwner.com does show some downward pressure on commission rates over the last decade, Molony said, "If
anything, there is probably upward pressure on commissions right now."

Meanwhile, the percentage of "open market" for-sale-by-owner (FSBO) transactions -- those in which the seller did not know the buyer -- remained
at about 7 percent last year, down from 10 percent in 2004, Molony said, citing NAR's ongoing surveys of home buyers and sellers.

"If you ask consumers how you choose the agent you work with, it has nothing to do with commissions," Molony said. "It's reputation, knowledge of market,
expertise and trustworthiness that are far more important than commission rate or business model."

ForSaleByOwner.com has also cited the November 2008 NAR research report, "Profile of Home Buyers and Sellers," as evidence that sellers who represent
themselves are able to close deals more quickly and at closer to their asking price than those represented by agents.

NAR's surveys of homebuyers and sellers found the median price of FSBO properties in which the seller did not know the buyer was 97 percent of
asking price, compared to 96 percent for agent-assisted sales. NAR's survey also found that the median number of weeks on market for those FSBO
properties was six weeks, compared to 10 weeks for agent-assisted sales.

That data is "taken a bit out of context," NAR's Molony said, noting that the $211,000 median selling price for agent-assisted sales was much greater
than the $153,000 for all FSBO properties.

"When the bottom line of (being represented by an agent) is $58,000, the question is how much does it cost a FSBO to save on that commission?" Molony
said.

Which is another way of saying what other critics have suggested: FSBOs may sell for closer to their asking price if sellers, lacking knowledge of their
market, are underpricing them.

ForSaleByOwner.com spokesman Eric Mangan said that, armed with an inexpensive professional appraisal or widely available Web-based valuation
tools, sellers representing themselves should have no trouble determining an asking price that reflects market conditions.

Mangan said a recent survey by Consumer Reports and studies by academics at Northwestern and Stanford universities demonstrate that "by owner" sellers
retain more equity than sellers represented by agents.

The Consumer Reports survey of more than 9,000 buyers and sellers found 82 percent of sellers employed the help of an agent, and received an average of
$5,000 below asking price. About 17 percent of respondents sold their homes without an agent, and received roughly the asking price (see story).

In a study published in 2007, economists from Northwestern University and the University of Wisconsin compared FSBO and agent-represented home sales
in Madison, Wis. The study found that sellers who used a listing agent and the local MLS did not get a higher price than those who used a new FSBO Web
site, FSBOMadison.com (see story).

According to an abstract of a February 2008 paper by Stanford researchers, faculty and staff who employed a broker to sell homes on the university
campus did not obtain more for them or significantly alter their initial asking price, but did manage to sell their homes more quickly.

The U.S. Department of Justice's Antitrust Division has noted the sharp rise in commissions paid by consumers from 1999 to 2007 as home prices escalated,
even as commission rates remained steady in the 5 to 5.5 percent range.

"Unless broker costs were also rising sharply during this period of time, competition among brokers should have held commissions in check even as home
prices were rising," the department noted in an online analysis.

----

U.S. real estate commissions fall; O.C. commissions fall more  

U.S. real estate commissions have fallen by 34% since earnings peaked in 2005. But Orange County real estate brokers saw their take-home pay fall further from peak levels, declining by about 50% from ‘05 levels.

ForSaleByOwner.com estimates that U.S. real estate commissions fell to $46.6 billion in 2008, down 34.6% from $71 billion in 2005 — the peak year for agent and broker earnings.

Orange County’s likely commission total, based on data from two sources, ranged from $801 million to $845 million.

The SoCal MLS has reported that revenue generated by O.C. home sales totaled $13.3 billion. Assuming a commission rate of 6% (it actually varied between 5.2% and 6% in recent years, according to brokers), then total O.C. commissions were in the neighborhood of $801 million last year, vs. $1.5 billion in 2005. That’s a drop of 47%.

Separate estimates by DataQuick put the revenue total at $14.1 billion, although their data includes all home sales, including those not handled by brokers. Six percent of that revenue total is $845 million, down 54% from 2005 levels. O.C. sales revenues fell to their lowest level last year since 2000, DataQuick figures show.

ForSaleByOwner.com blamed last year’s decrease on falling home values.

The average U.S. commission was $12,600, the web site reported. The West had the highest average: $16,230 per sale.

Based on figures from both SoCal MLS and DataQuick, the average O.C. commission in 2008 was just under $35,000.

Broker Commissions Fell 18% Last Year, ForSaleByOwner.com Says  

U.S. real estate commissions have fallen by 34% since earnings peaked in 2005. But Orange County real estate brokers saw their take-home pay fall further from peak levels, declining by about 50% from ‘05 levels.

ForSaleByOwner.com estimates that U.S. real estate commissions fell to $46.6 billion in 2008, down 34.6% from $71 billion in 2005 — the peak year for agent and broker earnings.

Orange County’s likely commission total, based on data from two sources, ranged from $801 million to $845 million.

The SoCal MLS has reported that revenue generated by O.C. home sales totaled $13.3 billion. Assuming a commission rate of 6% (it actually varied between 5.2% and 6% in recent years, according to brokers), then total O.C. commissions were in the neighborhood of $801 million last year, vs. $1.5 billion in 2005. That’s a drop of 47%.

Separate estimates by DataQuick put the revenue total at $14.1 billion, although their data includes all home sales, including those not handled by brokers. Six percent of that revenue total is $845 million, down 54% from 2005 levels. O.C. sales revenues fell to their lowest level last year since 2000, DataQuick figures show.

ForSaleByOwner.com blamed last year’s decrease on falling home values.

The average U.S. commission was $12,600, the web site reported. The West had the highest average: $16,230 per sale.

Based on figures from both SoCal MLS and DataQuick, the average O.C. commission in 2008 was just under $35,000.

Real estate commissions highest in the West  

Residential real estate agents in the western part of the country, including Oregon, earned the biggest average commission on home sales in 2008 and beat the national average, according to a study released Monday.

Sold homes in the West also had the largest average selling price by region of $312,100, the study said.

The sales commission study, by ForSaleByOwner.com, showed Western agents earned an average commission per home of $16,230. Average commissions in other regions for last year were: Northeast, $15,500; South, $11,050; and Midwest, $9,540.

Started in 1999, ForSaleByOwner is a Web site for homeowners who want to sell their homes themselves, without the help of a real estate agent. The site competes with agents, providing home-sale services such as advertising and real estate resources for fees ranging from $89 to $899.

Nationwide, total agent commissions on residential sales dropped $12 billion to $46.6 billion in 2008 from $58.4 billion in 2007, according to the study.

In the last eight years, the high for commissions was $71 billion in 2005, and commissions have declined each year since then.

The national average commission for last year was $12,600, down from $13,780.

Average selling prices for homes last year, by region, were: West, $312,100; Northeast, $297,900; South, $212,400; and Midwest, $183,400.

Data for the Web site’s study on agent commissions came from the National Association of Realtors and home-sale data provider Real Trends Inc.

Rent-To-Buy Pros And Cons  

As home prices continue to drop, consumers are taking a harder look at rent-to-buy options, in which potential homeowners commit to a multi-year lease with a future option to buy the property.

In other words, it's nice to have an out. If property values plummet, the renter can remain a renter until the agreement expires. Should values rise, then the rental payments count toward a purchase of the home within the agreed-upon time period.

While this may seem like the perfect wait-and-see approach, it's not a situation for everyone. Among the factors to consider: your long-term job prospects, credit history, mortgage rates and fee structures.

In Depth: Rent-To-Buy Pros And Cons

Here's how it works: Instead of outright purchasing a property, a potential buyer draws up a contract with a seller in which the monthly rental payments, based on the home's value and often above going rates, count toward an eventual sale. All rental payments made pay down the principle if the renter decides to exercise the pre-paid option--typically 1% of the sale price--to buy.

The date at which the agreement expires varies by contract but is typically between two and five years. At that point, the renter can choose to buy the home at the original listed price minus the equity he or she has built. If not, then the homeowner has the option to evict them and keep all payments.

Why would a seller concede to such an agreement? Well, it's not easy to sell a home these days. Last year the National Association of Realtors reported 4.9 million transactions; at the height of the boom, in 2004, 8.5 million new and existing homes were sold. Instead of letting a home sit empty, sellers are looking for any income stream they can tap. Mix in the tight credit market that makes it difficult for anyone still thinking of buying to do so, and it's easy to understand why this particular brand of transaction looks viable.

"With the tight credit market and stricter down payment requirements, rent-to-own has emerged as a trend for people who otherwise would be home buyers," says Eric Mangan, spokesman for ForSaleByOwner.com, a real estate listing company. His company has started offering sellers the ability to list a home as rent-to-buy, given what he calls a surge in demand.

Of course, there are pitfalls. If a renter eventually decides not to buy, not only do his rental payments disappear, but the premium option fee he has paid for the right to buy also evaporates. In addition, if the price of the home goes down considerably over the next three years, then the renter has been paying a rate based on that amount and will find himself overcharged.

On top of that, many contracts in rent-to-buy situations disallow late rental payments from counting toward an eventual sale. Those with punctuality problems might lose equity.

It's a complicated deal, and renters should be careful about the terms of their contract, especially elements that allow the seller to terminate the arrangement, such as maintenance of the property, payment times or individual clauses. If the housing market improves and the seller can get more at market than in the renter's option deal, the seller may want to renege.

"Renters who want this option should go with a reputable broker and a good real estate attorney," says Anthony Sanders, finance professor at Arizona State University. "The incentive for the owner to cancel the option if house prices increase quickly is tremendous."

Still, it can be a perfect option for an aspiring homeowner. Credit is tough enough at present, and for those with spotted credit histories it's nearly impossible to get a loan. Those looking to build equity while improving their credit history will find rent-to-own a strong match.

Which brings up a key point of rent-to-buy contracts: They can be helpful for those sitting on the fence but shouldn't be utilized by anyone who isn't serious about eventually buying the home. Rent-to-buy should be made as part of a plan to own a home, otherwise it will end up costing more money in fees and above-market rent payments. Make sure the eventual purchase is driving the decision to enter a rent-to-buy.

"A good rule of thumb," notes Sanders, is to "separate the rental decision from the purchase decision.

Data shows low to nonexistent down payments on home may have helped fuel current real estate crisis  

In a report released from the National Association of Realtors, 2008 Profile of Home Buyers & Sellers, the subject of down payment size on residential real estate and how it has affected the market in general is examined.

The 100+ page report shows that as of the end of 2008, a disturbing 20% of all U.S. homes have a mortgages that are "underwater." This amounts to 8.3 million homes.

Since the report was issued a few months ago, it’s no stretch to imagine that those figures have gone up.

So how did we get here?

Eric Mangan of ForSaleByOwner.com says declining home values are a root cause, but declining home prices are not the only cause of the underwater mortgage phenomenon.

“Consider that a mortgage amount is simply a home's sales price minus its down payment,” says Mangan. “It is accurate to say that mortgages are more likely to go underwater whenever a smaller down payment exists.”

The NAR report reveals a snap shot of what much of America’s down payment data looks like:

--The median down payment amount for all homebuyers is ONLY 9 percent

--The median down payment amount for first time homebuyers is ONLY 4 percent

--29% of all home buyers put 0% down to buy their home; and

--34% of first-time homebuyers put 0% down to buy their home.

Such low down payment amounts, coupled with decreasing home prices, are the reasons why there are such a large percentage of homeowners who are upside down. True, these consumers obviously made a bad decision to over-leverage themselves, but the fundamental questions surrounding this debacle still remain.

As a member of the media who reported on the worsening real estate market, I and many others became the bull’s eye for the wrath of Realtors, mortgage reps and homebuilders alike as the primary reason this market went south.

We beg to differ.

It's logical to assume that any financial advisor would advise homebuyers to save up for at least a 15-20% down payment.

So who was encouraging or advising consumers to buy homes that they couldn't afford?

Sell home yourself? It may be smart, survey finds  

For the second year in a row, a survey by the National Association of Realtors shows that people who did not use a professional real-estate agent actually sold their home faster and got closer to their asking price.

It took an average of nine weeks for agent-assisted deals to close last year versus six weeks on average in the case of for-sale-by-owner properties, according to the Realtors' 2008 survey. And those for-sale-by-owner, or "FSBO," transactions did not include any deals in which the seller knew the buyer — fast-track, friendly deals that could have skewed the numbers.

"This shows the value" of do-it-yourself sales, said Eric Mangan, a spokesman for ForSaleByOwner.com, the nation's largest online residential matchmaker (and a unit of Chicago-based Tribune Co., which also owns the Orlando Sentinel). "It's something the NAR doesn't trumpet, but it's from their own statistics."

Not so fast, counters the nation's largest trade group for Realtors. Only about 7percent of all home sales last year were arm's-length for-sale-by-owner deals in which buyers and sellers did not know each other. And that was down from 10percent a few years ago, when homes were selling faster, NAR senior research analyst Harika "Anna" Barlett said.

Also, that shrinking pool of FSBO deals typically involved smaller, lower-priced homes that are easier to sell in the current sluggish environment.

Also misleading, Barlett said, is the survey finding that FSBO sellers received 97percent of their asking price versus 96percent for agent-assisted sales. FSBO homes are more deeply discounted to begin with, she said, so any subsequent price concessions tend to be small.

"FSBO owners have, in essence, mispriced their homes too low," Barlett said in her analysis, posted on NAR's Web site.

For-sale-by-owner proponents counter that, if FSBO homes are selling faster and for amounts closer to the original asking price, then it's because real-estate agents are pricing homes too high. Agencies earn a percentage of the sales price, typically 6percent (down from 7percent a few years ago), for services rendered and for the sales agent's commission. So the argument is that agencies have a stake in preserving a higher sales price if possible — but are also quick to cut the price as much as a seller will allow to avoid losing out on a commission completely.

'I had more luck'

Natalie Lazarus is trying to sell a rental home on her own in Orlando's College Park section, having successfully unloaded another rental property in Longwood late last year without professional help.

In Longwood, "I had tried to sell it [through a Realtor], but I had more luck with the sign I stuck in the yard," Lazarus said. Realtors did bring two offers to her for that house, she said, "but both offers were lower than what I ended up selling it for on my own."

Lazarus said her College Park area house, which she is advertising for $125,000, is still unsold after three months. But she is attracting potential buyers and said she has no plans for now to list the home with a full-service agency.

"It's a little harder to sell because it's a two-bedroom" instead of a three-bedroom home, the category that accounts for most sales. "But I just showed it, and I may end up doing a lease-purchase."

The Web doesn't appear to have given either Realtors or FSBO sellers a clear advantage. Professionals can get their listings out to more potential buyers faster than ever thanks to the Internet, but consumers' access to the industry's once closely guarded Multiple Listing Service has expanded, and growing familiarity with computers has broadened the market for do-it-yourself sellers who once did little more than stick a handmade sign on the lawn, buy a classified ad and hope for the best. Also, many for-sale-by-owner offerings are now also found on the MLS.

Unlike the 1990s, when only about 2percent of homebuyers were searching online before making a purchase, these days virtually all buyers — about 87percent — search the Web at some point. Yet that dramatic growth has not led to a collapse of the professional real-estate industry and the role Realtors play in closing a home sale. As home sales have slowed in recent years, many homeowners have turned to Realtors after trying unsuccessfully to sell on their own.

Some experts disagree

Even some savvy real-estate investors think professional help is worth the commission.

Randy I. Anderson, a professor of real estate and holder of the Howard Phillips Eminent Scholar Chair at the University of Central Florida, said the power that the Internet gives to more sophisticated buyers and sellers is forcing Realtors to find ways to add value and compete.

"For those who are not adding value, they will fall by the wayside, but it's not anywhere near that level" in threatening the entire industry, Anderson said.

For example, Anderson said, he does his own research on the Internet before he buys or sells property — but mainly to check comparable prices and not to try to execute a for-sale-by-owner deal.

"I've never done that. I want to find the professional who knows the market best," Anderson said.

Getting an Expensive Reality Check  

When Robert Hamerslough and his brother, Daniel, put their late mother’s four-bedroom house in Yonkers on the market last summer, they received assurances from a real estate agent that they would get top dollar for the tidy 1923 colonial.

But with an asking price of $799,000, higher than comparable properties in the neighborhood, the house — even with its gleaming wood floors and welcoming fireplace — attracted few lookers and no offers. “This is a terrible time to have a house up for sale,” he said.

The Hamerslough brothers eventually lowered their asking price to $719,000. They also dropped the real estate agent and listed the house on forsalebyowner.com. It’s one of a proliferating number of real estate Web sites attracting sellers who are opting to do the deal themselves and avoid paying a sales agent’s commission in a down economy, industry officials said.

Like the Hamersloughs, many sellers today realize that the boom days are gone and that new marketing tactics are required, real estate officials said. The latest statistics show that the number of house sales in Westchester County dropped sharply at the close of 2008 compared with the year before.

According to a report issued on Jan. 26 by the Westchester-Putnam Multiple Listing Service, the number of sales of single-family homes, condominiums, cooperatives and two- to four-family houses in Westchester fell in 2008 by more than 26 percent, to 6,639, from 9,022 the year before. In 2005, when the market was sturdier, 10,524 homes sold.

The most-watched number — the median sale price of a single-family home — held steady for most of the year as many sellers, like the Hamerslough brothers, resisted price concessions. But by the end of 2008, the median price for the year had fallen to $650,000, down 5 percent from the year before. For the fourth quarter of the year, the median sale price was $570,000, down almost 11 percent from the same quarter a year before, the report said.

Meanwhile, inventory has increased, although not to worrisome levels, said P. Gilbert Mercurio, the chief executive of the listing service and the Westchester County Board of Realtors. As of Dec. 31, 2008, the number of houses (single family, co-ops, condos and multifamily) on the market in Westchester was 5,392, up 14.5 percent from the year before. As Mr. Mercurio noted in the report, those numbers are far below the annual levels of 8,000 or more recorded during the early 1990s.

Looking ahead, Westchester will be especially vulnerable to the vicissitudes of Wall Street, real estate officials said. The listing service’s fourth-quarter closings reflect sales during the summer and “do not at all reflect the impact of the economic chaos that commenced in October of 2008,” Mr. Mercurio said. The damage to the real estate market from that period will not be officially known until the first-quarter numbers for 2009 are released in April.

A decrease in the average price of a house at the end of 2008 suggests that the high end of the market has already been affected by the loss of jobs and bonuses in the financial sector, the report said. For the first time since the listing service began tracking million-dollar-plus sales in 2000, there was a decrease in those houses’ market share. The luxury market constituted 22.8 percent of Westchester’s homes sales in 2008, compared with 25.4 percent in 2007 and 24.7 percent in 2006, the report said.

Responding to the pressure on the high end of the market, Babette Ballinger recently dropped the price of her four-bedroom Dutch colonial on four acres in Yorktown Heights to $999,999, from $1.2 million.

“When you look around you and see terrific houses just sitting, you realize that it’s a highly competitive marketplace we’re in, and that the old ways of selling a home don’t always apply,” Ms. Ballinger said. “You can’t just depend on real estate agents. You have to be aggressive and get out there and market the house yourself.”

She has also listed the house with one of the online services and said she would reduce the price even further if the deal is closed without the services of a sales agent.

But Leah Caro, the president and principal broker for Bronxville-Ley Real Estate in Bronxville, argued that especially in a tough market, sellers need seasoned professionals working for them. Moreover, with many homeowners behind on mortgage payments or facing foreclosure, agents trained to negotiate with banks are especially in demand, said Mark Boyland, president of the Multiple Listing Service.

If there is one bright spot in an otherwise grim market, it is the emergence of a new group of opportunists: first-time home buyers eager to take advantage of falling prices. They made up 41 percent of all buyers in 2008, up from 36 percent in 2006, according to a survey from the National Association of Realtors.

 

5 Top Blunders of Internet Home Buying  

While the painful real estate swoon appears likely to extend well into 2009—at least—the number of Americans using the Internet to find the home of their dreams is poised to keep on climbing. According to the 2008 National Association of Realtors Profile of Home Buyers and Sellers, 87 percent of home buyers used the Internet to search for homes in the past year. That's up steadily from 84 percent in 2007, 80 percent in 2006. But despite its mounting popularity, the Internet home-buying process can present a host of pitfalls. To help make your online real estate searching more effective, here's a look at the top five Internet home-buying blunders and what you can do to avoid them.

1) Assuming you can do it all yourself. The Internet allows users to handle for themselves many of the tasks that could once only be performed by real estate agents. The NAR profile, for example, found that the number of home buyers who first learned of their homes on the Internet has been rising in recent years—to 32 percent in 2008, up from a tiny 2 percent in 1997. Accordingly, the number of home buyers who first learned of their homes through agents has been declining—it was at 34 percent in 2008, down from 50 percent in 1997.

But although the Internet can provide heaps of helpful tips and research, it would be a mistake to assume that the Web is all you need to buy a house—unless you are an experienced real estate investor. The process of purchasing real estate can be extremely complicated from a legal standpoint, and it's easy to make a mistake if you don't have an expert advising you. And when it comes to something as expensive as real estate, those mistakes could cost you thousands of dollars. "Doing all the paperwork yourself is a huge mistake," says Joshua Dorkin, CEO of BiggerPockets.com, a real estate networking and information site. "There are so many things you can miss on a contract."

2) Looking too narrowly. The sheer amount of information about the real estate market online can be overwhelming. As a result, buyers can be tempted to stick to just one or two popular real estate search engines, like Realtor.com, for their research. The problem with doing that, however, is that you're missing out on the biggest advantages that the Internet offers.

First, you're closing yourself off to a smaller cross section of the homes that are out there. "A lot of the sites aren't comprehensive and don't have all of the new listings," says Pat Kitano, a cofounder of Domus Consulting Group, which works with real estate brokerage firms on technology marketing strategies. Don't assume that because a house is on one real estate website that it is on them all, says Greg Healy, vice president of operations at ForSaleByOwner.com. "It's still very fragmented," he says. Healy recommends using several websites to get a more complete picture.

Second, you miss all the breaking, up-to-the-minute information on the housing market that can make you a smarter consumer. Blogs have become a popular resource for real estate agents and others to post information as it happens. "If consumers are interested in a local area, they should find local real estate bloggers who know this breaking information," says Kitano.

3. Ignoring the indies. One area that major real estate search engines often overlook is the market for homes sold by the owners. "A lot of people forget to think how many homes are sold without agents. The current estimate is that 20 to 25 percent of homes are" listed by owner, says Healy.

Your dream house could easily fall into that 20 to 25 percent. So how do you bring homes sold independently into your online searches? "Craigslist is one of the best resources," says Dorkin.

4. Falling for fake listings. Remember, the Internet is a giant playground for scammers, and unfortunately they have penetrated the world of online home buying as well. Combine big dollars for online advertising and a lot of people searching for homes, and the result is a proliferation of fake home listings. There are a number of red flags to look out for. "If there are no photos [of the house], that's a big warning sign. That's just people trying to collect page views," says Healy. But even if there are photos, it's not guaranteed to be legitimate. Legitimate websites will put watermarks on their home photos to brand those photos as their own. If a home's photos have several different watermarks on it, then you can guess you are looking at the work of a scammer.

5. Putting too much stock in home valuation websites. Sites like Zillow.com and Cyberhomes.com have changed the way people buy homes by putting pricing information at buyers' fingertips. But they're not infallible. Don't assume to know what the value of a home should be based on what these sites tell you about the neighborhood. There are many elements of a home's value that home valuation sites cannot incorporate. "Take their values with a grain of salt," says Dorkin. He recommends using this information merely as a range. Do other research to narrow that range. For example, walkscore.com can tell you the number of amenities within walking distance of a location—those are some of the tangibles that can raise or lower the value of a home.

Combined Operation  

SUMMERFIELD -- If you drive up to Del Webb’s Spruce Creek Golf and Country Club community today, Saturday or Sunday and ask about the Open House, the guard will give you a map and a guide for 13 homes, which are for sale by owner.

The multiple-open-house event isn’t common at this 3,200-home retirement community.

But it would be a good idea, thought Lila Tuchman one day while driving around the neighborhood. Tuchman is a resident of Spruce Creek who has been one of the main organizers of the event.

She and her husband, Don, put their two-bedroom house for sale in early November after they decided to move closer to their son in Tampa.

They’ve had a handful of visitors so far on Fridays, Saturdays, and Sundays, when the Spruce Creek community allows open houses.

Lila had noticed that while some homes were on sale by Realtors, a few others had For Sale by Owner signs up. She thought it would be a good idea to have a community Open House for all the homes that were for sale by the owners. After all, the event could attract a larger group of visitors and potential buyers.

“So I called the neighbors who had the signs up and looked at the paper to see who had ads and called them,” said the cheerful 79-year-old, who has been married to Don for 60 years.

Some declined her offer and some were eager to join in.

“We ended up with 13 people,” she said. “We had three meetings to plan what we were going to do and we decided to have an Open House right after Christmas, when seasonal residents would be here.”

She then used the help of her friend Lucy Noe to place ads in the local paper and online.

Noe, too, is selling her three-bedroom, two-bath house on her own, hoping to move to a smaller house in the community. She said she has had her house for sale for six months.

The Tuchmans sold their first house on their own 20 years ago. They sold a second house a few years later.

But this time the situation is a bit different because the housing market is weak in most parts of the country. The Tuchmans say they could have sold the house for $100,000 more last year.

It is not clear if more owners are trying to sell their homes on their own in response to the market and economy.

And companies like ForSaleByOwner.com, one of the largest for-sale-by-owner Web sites, don’t keep track of such transactions, since there’s no nationwide database for such sales.

But the Web site’s early indicators show that there are more people nationwide who are looking to save on commission and sell their houses on their own, according to Eric Mangan, spokesman for ForSaleByOwner.com.

“Especially in Florida, where prices have dropped so drastically, people don’t want to lose another 6 percent of their home’s value by paying commission,” wrote Mangan in an e-mail. The company has not issued its 2008 figures yet, he added.

Bert Meadows, the new president of the Ocala/Marion County Association of Realtors, said he hasn’t noticed an increase in the number of for-sale-by-owner home sales here. But he said he has seen people who have been trying to sell their homes on their own come seeking the aid of a Realtor after months of waiting for a qualified buyer.

“There’s a list of 101 things that Realtors can help with,” he said.

Lila Tuchman said the 13 homes that are holding open houses this weekend are large and small and have a wide range of prices.

“We’re looking for definite buyers. We’re not going into this blindly. And everything is negotiable,” she said.

PR real-estate battle escalates on listings  

The National Association of Realtors has been dueling with the do-it-yourself real-estate listing service ForSaleByOwner.com in recent weeks over the impact of a six-month-old U.S. Department of Justice settlement.

Its weapon of choice: news releases.

ForSaleByOwner.com claims in one news release that the May 29 ruling against the Realtors association forces the group's online affiliate Realtor .com to accept the other Web-based company's customer listings even though they lack representation by a broker.

Not true, says a National Association of Realtors news release. Yes, true, says a ForSale ByOwner.com news release. "The DOJ-NAR settlement benefited consumers by giving them access to Realtor.com without the expensive cost of a commission fee," ForSale ByOwner.com Vice President Greg Healy is quoted as saying in a Nov. 12 news release. The Realtors followed up with a release containing a list of corrections to "inaccuracies and misleading statements" it said the online-listing site made.

"ForSaleByOwner.com does not in any way enable home sellers to advertise their home on Realtor.com without broker representation," a Nov. 14 release says.

ForSaleByOwner.com fired back on Nov. 25 with a statement that it "stands by the accuracy of our news release." The company has a Web page explaining how its customers can have their listings posted on Realtor.com for a $200 fee.

The Justice Department settlement with the National Association of Realtors stems from an investigation into unequal treatment of online real-estate brokers on the part of the association and its affiliated multiple-listing services.

The association agreed to treat Web-only brokers the same way it treats brokers with brick-and-mortar offices. The settlement doesn't mention ForSaleByOwner.com or anything about whether Realtor .com must list owner-represented properties.

Realtors, homeowners turn to Web to help sell properties  

Vicki Holmes is selling a sprawling, elegant ranch house in the heart of Colonia Solana, one of Tucson's most established neighborhoods.
Just a stone's throw from Hi Corbett Field and Reid Park, the home is in a prime spot with plenty of visibility. But to help get the word out, Holmes recently turned to the Internet, uploading a 90-second video tour of the $600,000 listing to the popular Youtube Web site. There, viewers can peer into the ranch house, taking in its hardwood floors, wood-beam ceilings and gourmet kitchen.
"Nowadays, with today's market, we have to be more creative, and you just have to continue to market, market, market," said Holmes, an agent with Long Realty.
In an attempt to spark interest and reach a wider audience, agents are marketing homes on Youtube and other popular Web sites not traditionally tied to real estate. These free videos and listings, agents say, only help to get the word out about a property or a neighborhood, particularly for people out of state.
But whether these videos or other Internet goodies actually lead to sales is debatable. Some say sites like Youtube or the free-classified Craigslist are too unfocused to actually spark interest in properties.
The Colonia Solana video has had about 120 views in two months, which Holmes thought was pretty good. One home she has made a video for has sold, although she said it wasn't necessarily because of the Youtube spot.
There are dozens of home tours for the Tucson area up on YouTube, which shows the number of hits each video gets. Some have had close to 1,500 views, and others have hardly ever been seen. Most of the videos seem to be for higher-end homes, but the tours span all price ranges, even including some homes described as foreclosures.
Some videos come with voice-overs, and others play swanky, mood-setting music or even nature sounds like bird calls that can make the videos more comical than informative.
"I do the voice-over because I would rather that be more prominent," said Holmes, who self-produces her videos and has three online. "I thought (the music) is too overbearing because it's losing the impact of the home."
Larry Appel, an agent who is also with Long, has posted numerous videos to Youtube in the past year, but, unlike Holmes, he outsources the work. The videos have never led to a direct sale, he said, but they have led to interest in a particular community or neighborhood. There have been times, Appel said, prospective buyers have seen a video and ended up buying a neighboring home.
"They didn't help sell the multimillion-dollar homes specifically, but they created significant interest in communities or subdivisions," Appel said. "The concept is to show people the community in addition to the various properties for sale."
Appel, for example, has a video tour of a luxury home near Honeybee Canyon in Oro Valley that features sweeping shots of the desert and the surrounding community before more detailed shots of the home.
Appel only uses the videos for high-end homes because he said most buyers of luxury homes are coming to Tucson from out of state. Because he outsources the work, the production quality is high, but it also comes at a price.
"I've been doing that just with the upper-level homes because it's so costly to do," he said.
But if agents have turned to Youtube and other Web sites to market homes, why wouldn't homeowners just do the same and cut out a middleman?
Youtube offers a smattering of for-sale-by-owner videos. Many more videos and slideshows can be found on the Forsalebyowner.com Web site.
Greg Healy, vice president of operations for Forsalebyowner.com, said he expects an uptick in listings on the site in many markets as the number of "upside-down" homes and foreclosures increase. People are upside-down when they owe more on their mortgages than the property is worth.
The buying process is "taking place on the Internet and more prominently without agents, and I think that's the tipping point," he said. But he described what's happening on Youtube, or other non-traditional sites like Craigslist, as unfocused competition.
"Youtube and Craigslist are not focused real estate channels," he said. "It makes it difficult for anything to lead to a sale."
Maybe so, but the listings and videos keep coming. Facebook, the popular social networking site, for example, now has a "Cribfinder" page where homes are listed. Many agents say understanding new media is crucial to staying in the real estate business.
Vito Teti, an agent with Remax Majestic, now exclusively markets homes on the Internet, relying on traditional sites like Realtor.com as well as Youtube videos, Craigslist and his own sites.
"You have to stay on top of the Internet. It's not a fad," he said, adding that a growing number of people start their home search online. To that end, the work ethic to market and sell a home hasn't changed. Just the medium.
"You have to . . . take advantage of every single outlet that is out there," Teti said. "It's very time-consuming, but that's what I get paid to do."

Expert Q and A: For Sale By Owner  

Gregory Healy, the vice president of operations for ForSaleByOwner.com, is answering readers’ questions about for-sale-by-owner, or FSBO, real estate sales this week.

 

I think many people would agree that, in theory, it is a good idea for owners to sell their own properties, because they can avoid paying a 5% commission to a real estate agent.

However, is this the case in all markets? I live in Boston, MA, and most condominiums here seem to be sold through real estate brokers. I assume that most prospective buyers are therefore looking for new properties by contacting a real estate agency and not looking online at craigslist or another internet site. How can a seller in such a market avoid using a broker and paying the 5% fee?

While it’s true that many homes are sold through brokers, it’s also true that the internet has become a more central means of marketing a home – whether you ultimately work through a broker or not. Based on a 2007 report issued by NAR, the National Association of Realtors, many buyers who purchased through an agent found the homes they ultimately purchased by going to the internet first.

This research indicates that the trend is definitely moving in the direction of more and more people looking online buy a home. Buyers are becoming ever more independent, and are doing more of the search on their own. According to additional research, for example, it’s clear that 60% of buyers still drive around and walk through neighborhoods to see potential properties and to get to know the neighborhood on their own, independent of agents. This is probably especially true in a “walking city” such as Boston.

Whether you choose to list with an agent and pay the 5%, it is of course your decision – but if you decide not to do so, the home searching trends are definitely moving in your direction.

Hi, I live in a loft in Manhattan. Due to the specifics of the New York City market, there is obviously a premium attached to units in Manhattan. Is there a price level above which you don’t think it is advisable to sell FSBO and use a broker instead? If so, would this level be 1M, 3M, 5M in Manhattan?

New York City is a really unique real estate market - however, I think higher offering prices do not limit a homeowner’s ability to sell the home “by owner”.

The three main things to consider to be successful are: first, price your property well, by doing a marketing comparison, visiting similar condos, and obtaining some pricing reports; second, “widen your net” by marketing the property on “by owner” real estate websites, other free sites and through your own personal network; and third, hire an attorney or title company to help you through the closing process.

I will be selling my apartment in UWS FSBO. If I state “buyers” brokers are welcome,” how do I handle the 3% fee that needs to go to them? It’s almost like I need to have two prices — one for buyers without brokers and one for buyers with brokers.

If you are willing to accept an offer from buyers who are represented by a broker, you do not need two selling prices. Most of the time, buyer agents understand they will receive 3% of the final sale prices. For example, if your property is listed for $310k and the final, accepted offer from a buyer represented by an agent is $300k, you would owe the buyer’s agent $9k. When you subtract the buying agent commission, you have $291k left - so when pricing the property and negotiating, make sure the $291k is above what you are willing to walk away with when the deal is done.

When you accept an offer, the final contract should state the percentage owed to the buying agent as well the final, accepted offer price and the commission payment. So in the example above, the $9k commission payment should be clearly stated. This is very straightforward and a common practice.

Another thing to keep in mind is that the 3% you mention is always negotiable. You can offer more than 3% or less than 3% based on what you think may attract buying agents and make your transaction compelling as well as cost-effective for you.

What is FSBO and what are the advantages of selling a property without a broker? What are the disadvantages?

FSBO, which can stand for the phrase “for sale by owner,” means a home seller who decides to sell their home without using a full-service real estate agent. One of the primary advantages of selling your property “by owner” is to save money. According to RealTrends, the national average commission rate was 5.12% last year. This means that if you sold your home yourself for $300,000, you would save over $15,000 versus using a full-service real estate agent and paying the average commission rate.

Selling a home without an agent can be hard work. However, thousands of home owners successfully sell their homes each year. Furthermore, academic studies by two of our nation’s leading universities, Stanford and Northwestern, found that “by owner” sellers were as effective as agents in maximizing the sales price of their homes. Selling a home yourself (or with the assistance of an agent) requires a personal commitment, but for many people the opportunity to save $15,000 or more is a worthwhile use of time and effort.

How do you get your FSBO property in the listings Real Estate agents use?

The listings services that agents use are commonly known as Multiple Listing Services (MLSs). An MLS is a database of homes listed by agents in a specific geographic area. There is no MLS for New York City, and there is no national MLS. Homeowners can have their homes placed in the local MLS while still retaining many of the advantages of selling their homes themselves by utilizing a “flat fee” broker.

If a home owner uses the services of a flat fee broker, s/he will pay a fee (which varies across the country, but generally costs about $300), complete the paperwork required by the local MLS, and sign an exclusive agency contract that commits the seller to paying a buyer agent commission of between 2-3% if the buyer is represented by an agent. In most areas, the home owner does not pay a commission to the broker who placed the listing in the MLS when the home is sold. A homeowner can complete these simple steps very quickly and have their home in the MLS in a few days.

If a buyer is not represented by an agent, the home seller does not pay any commission and will only have paid the flat fee at the beginning of the process.

Many sites, including ForSaleByOwner.com, have a nation-wide network of flat-fee brokers to enable their customers to have their homes appear in the local MLS using the process described above.

 

The Faces of For Sale By Owner  

Hal Ruzal personifies the do-it-yourself spirit.

He installed his own kitchen, built loft spaces for his office and sleeping area and tore down walls to convert his apartment in the meatpacking district from a one-bedroom to an open loft space. In the same vein, he is trying to sell his apartment without the aid of a real estate broker.

“The first five letters of broker is broke,” said Mr. Ruzal, 54, a mechanic at Bicycle Habitat in SoHo. “Say I get $525,000, a broker will get around $32,000 of that. I make $40,000 a year. For no work, they are getting about the same amount of money.”

Mr. Ruzal was referring to the 6 percent commission that real estate agents might earn on the sale of his 550-square-foot apartment, currently on the market for $525,000.

Since listing his apartment at the end of September on Craigslist.org with the tag line “Cheaper Than Renting,” Mr. Ruzal has spent every weekend walking around his neighborhood with a cardboard sign, shouting “Apartment for sale,” to passers-by and to diners sitting outside at the restaurant Pastis.

“You have to be original,” Mr. Ruzal said. “If you’re boring, you’ll just get passed over.”

Common wisdom might suggest that in an economic downturn, Mr. Ruzal and others taking the for-sale-by-owner, or FSBO (pronounced FIZZ-bo), route, would do better with a broker’s knowledge of the market and powerful advertising reach. On the other hand, at a time of cutting corners, the savings implied by a FSBO sale may appeal more than ever.

During the housing boom in recent years, online FSBO sites surged, enabling homeowners to market properties on their own and save the broker’s commission, said Jonathan Miller, the chief executive of Miller Samuel Inc., a real estate research company.

The housing market now, though, is on the decline. “We are in an environment where the actual success rate in FSBOs has fallen off considerably,” Mr. Miller said. “In this downturn, there is a greater volume of listings. Sellers are going to be much more conservative when competing with more listings.” And, he added, they will be more likely to list their homes with brokers.

But many sellers aren’t giving up yet. In August, in response to user requests, Craigslist added a FSBO category to its real estate section, said Susan MacTavish Best, a spokeswoman for the company.

“We have seen in the last three years much more enthusiasm on the part of homeowners to post their real estate on the site themselves as a FSBO property,” Ms. MacTavish Best wrote in a recent e-mail message. “It’s appealing for owners to post the ads themselves, controlling much of the home-selling process throughout.”

There is no official multiple listing service in New York City and FSBO sales are not tracked. But in the real estate advertising section of nytimes.com, the Web site of The New York Times, the number of listings bought as individual ads tripled, to 14,117, in 2007, from 4,640 in 2002, according to internal data compiled by The New York Times. Brokers typically buy multiple ads. In the first 10 months of 2008, nytimes.com had 12,649 single listings, about the same number as for the same period last year.

Even with the advertising reach of the Internet at their finger tips, sellers are still facing a slumping market.

“It’s a little scary right now,” said Boris Schaefer, 38, director of customer relations for a German cosmetics-packaging company, who is trying to sell his five-bedroom two-and-a-half-bath colonial in Montclair, N.J. “Right after the bank crisis, traffic slowed down,” Mr. Schaefer said. “There were less people calling and responding to ads.”

After cleaning and decluttering their home, he and his wife, Silke Willms, also 38, first listed their property for $689,000 over the summer.

He created a slide show of interiors and exteriors on Flickr.com, a photo-sharing Web site, and placed ads on Craigslist and the Park Slope Parents classifieds list, an online bulletin board for families living in or near Park Slope, Brooklyn, hoping to interest those looking for more space.

He attended open houses in Montclair to see how they were staged and to gauge the right selling price. “I compared those houses with the condition of our house,” he said. He and his wife held open houses and received a couple of offers, but they fell through.

Mr. Schaefer decided not to use a broker because he had the time to sell the property himself, he said, and he doesn’t want to pay a commission. “Six percent is a lot of money,” said Mr. Schaefer, who is returning to his native Germany at the end of the year for his job. (His wife and two children moved in August to start the school year there.)

Brokers say that FSBO sellers are missing out on the marketing prowess of agencies, expertise in setting a price and the ability to present a home to the right potential buyers. “I think the vast majority of FSBOs are not serious sellers,” said Ari Harkov, an associate broker with Halstead Properties in New York. “They are only willing to sell at a certain price.”

After a series of disappointments, Mr. Schaefer had been considering going with a real estate agent after all. But at one of his open houses, he met a broker who lamented that her agency had only five houses go into contract over the previous four weeks.

“That explained to me why the last weeks were so quiet,” Mr. Schaefer said. “I am thinking if there are no buyers out there, the Realtor cannot do a better job than me.”

Since then, he has dropped his asking price by $40,000, to $649,000, and listed his home on realtor.com through a company called Housepad, a flat-fee listing service that posts properties on multiple listing services on behalf of sellers who are not licensed real estate agents. He is hopeful that the new listing will attract more potential buyers.

With the recent victory of Barack Obama in the presidential election, Mr. Schaefer said he believed that “many people in our area will be more optimistic about the future.” If he cannot sell his home by the time he has to move back to Germany, he said he would either list the house with a broker or find a renter.

Some sellers who are bullish on the FSBO process actually sold before the current financial crisis.

“It’s all common sense,” said Matthew Morse, 46, a magazine editor. He and his wife, Sarah, sold their two-and-a-half-bedroom one-bath co-op in Brooklyn Heights on Pierrepont Street in June.

“We put it on the market at $799,000,” Mr. Morse said. “We didn’t want to go below asking, but we ended up selling it for $737,500. I don’t think a broker would have gotten full asking price, and they would have chopped off 6 percent.”

The couple created a Web site with photos and a floor plan, advertised the apartment on nytimes.com at the beginning of May and then held open houses every weekend. Before each open house, they cleaned their apartment and crammed their children’s toys into closets.

Apart from the time it took to show their property for six weekends in a row, “the most annoying thing were the real estate agents and brokers who constantly called and harassed us to get our business,” Mr. Morse said.

Other FSBO sellers agree, saying they have scores of business cards from agents angling for a listing.

Still, Mr. Morse said that if he were selling in today’s market, he would go with a broker. He said he would worry about how long it might take to find a buyer and did not think he could put in the time needed. “It’s a whole brave new world out there,” he added.

But Greg Healy, the vice president of operations of ForSaleByOwner.com, sees that brave new world in a different way. “This market has been really tough,” Mr. Healy said. “We are seeing a strong surge of people who need to sell by owner.”

The number of sellers in the five boroughs of New York City advertising on ForSaleByOwner.com has increased by 22 percent so far this year over the same period last year, Mr. Healy said.

Customers surveyed by the site said they had seen their retirement and college savings hit hard by the financial crisis, Mr. Healy said. They are trying to get every penny they can from the sales of their homes.

“I think there are people out there who can do this,” said Lawrence Burak, 61, who listed his East End Avenue one-bedroom one-bath apartment for $850,000 on ForSaleByOwner.com at the beginning of October.

Eschewing open houses to avoid the possibility of damage to his home, Mr. Burak, a sales and marketing consultant in broadcast media, is showing his apartment by appointment. He believes the strongest selling point of his eighth-floor 950-square-foot co-op, as described in his ad, “is the totally unobstructed, and never to be obscured, northeastern view of the East River.”

A few people have come to see the apartment, he said, but he has not received any offers. “The view is worth the asking price,” he said. “To this day, when I look out the window of where I live, I never tire of it.”

For Allison and Marc Milgrom, the owners of a duplex apartment in Park Slope that is listed for $599,000, working with brokers over the summer was frustrating. “I felt like I had all the marketing ideas,” said Ms. Milgrom, a stay-at-home mother. “They did everything I asked, but didn’t offer anything more. They just didn’t seem to have a lot of experience.”

Once the listing expired, the Milgroms decided to take a stab at selling the apartment themselves. But when it came to writing a description of their co-op for a listing, they found themselves in a quandary. “At first we described it as a ‘two-bedroom, plus office apartment,’ ” Ms. Milgrom said. The apartment has a master bedroom on the ground floor, and a windowed 400-square-foot lower level that could be renovated into a bedroom and office space. “But families with kids came by and were disappointed that there weren’t two real bedrooms.”

When they changed their listing to say “one-bedroom plus” instead, they received more inquiries from couples and individuals. There were a few offers, but none have come to fruition.

Recently, Ms. Milgrom placed a for-sale sign in a street-level window, which resulted in a couple of showings. “I think if we don’t sell it soon, we will rent it,” she said, “because we have to do something.”

The Milgroms have bought a two-family house nearby and cannot continue paying two mortgages.

Not all sellers have a deadline to find a buyer. Though Mr. Ruzal is hoping to buy a house in the Midwood section of Brooklyn, he is not worried about how long it may take to sell his studio in the meatpacking district.

“You succeed in this world if you actually try at doing something,” he said. “The worst that can happen is I am stuck with the apartment — I’ll have a roof over my head.” 

FSBOs Get Agent-Free Access to Realtor.com  

An earlier version of this story described ForSaleByOwner.com’s new service as a “partnership” with Realtor.com. While the service does allow non-agent-affiliated sellers to advertise their homes on Realtor.com, it does not represent a formal partnership.

ForSaleByOwner.com, a Web-based company that markets the homes of independent sellers, has unveiled a new service product that allows customers to list their homes on the popular Realtor.com real estate site without having to go through a local multiple listing service.

From the press release:

ForSaleByOwner.com today announced that it has become the nation’s first “by owner” real estate website to enable home sellers to advertise their home on Realtor.com without appearing on a local Multiple Listing Service (MLS). This new direct access to Realtor.com follows the May 2008 settlement between the U.S. Department of Justice and the National Association of Realtors.

"The DOJ-NAR settlement benefited consumers by giving them access to Realtor.com without the expensive cost of a commission fee," said Greg Healy, Vice President of Operations at ForSaleByOwner.com. "We're proud to be the first to offer this new consumer-friendly access to Realtor.com. In today's challenging housing market, sellers need cost-saving ways to sell their homes."

"Our typical home seller saves nearly $13,000 in commission and this new access to Realtor.com will help even more people sell their home without using the services of a real estate agent," added Healy.

Realtor.com is a popular real estate website that attracts nearly five million monthly visits. The new Realtor.com Showcase Listing service from ForSaleByOwner.com will allow sellers to have their homes marketed on Realtor.com, and interested buyers will be able to directly contact these sellers.

Rent-to-own: A debatable path to homeownership  

Not quite an owner, but more than a renter: A lease-to-own agreement is a bit like housing purgatory.

But the arrangement is increasingly popular today because more sellers are having trouble unloading their homes in the real estate recession and plenty of buyers can't get a mortgage because skittish lenders are cutting back on making loans.

Through a rent-to-own contract, a renter locks in the right to buy a home at a later date at a set price. The renter puts down a nonrefundable deposit, and sometimes — depending on the contract — part of the monthly rent goes toward the down payment.

There are pros and cons on both sides. These agreements can help a seller get through a slow market with a little cash in the pocket, but a bad tenant can spoil the deal. Renters can potentially build home equity now even though they're not ready to buy. But it might be better to wait until you're financially settled before jumping into a large commitment.

The Web site ForSaleByOwner.com is receiving more requests for rent-to-own listings from both buyers and sellers, and it's working overtime to make searching for that option on their site easier, says Greg Healy, vice president of the company's operations.

And anecdotal evidence from real estate agents around the country suggests that these types of deals are on the rise, especially in the old boomtown markets where housing prices are still unaffordable despite recent sharp declines.

"We're seeing more of these than in a normal market," says Steve Goddard, a broker manager for Re/Max Marquee Partners in Manhattan Beach, Calif.

The arrangement is complicated with many moving parts. Think of it as combining a purchase and rental agreement. Both parties should go into it with help from a real estate attorney or at least a real estate agent well-versed on rent-to-own arrangements.

"You need to have a strong contract to make it work, not just a good handshake," Goddard says.

To start, the renter and seller agree on a fair price for the home. This can be tricky. A renter could lose out if the home declines in value before he or she can buy it. Or, the seller could get the short end if home prices appreciate more than expected.

Once a price is set, the renter pays a deposit, or option payment, to the seller, guaranteeing his or her right to buy the home in a set time. For example, a seller may ask for $10,000, or 2 percent, on a $500,000 home.

The two parties must also agree on a monthly payment and determine if any of it goes toward the down payment. Often times, rent-to-owners are willing to pay up to 10 percent above market rents to secure the home, especially if part of the money goes toward adding to the down payment, Goddard says.

In addition to the purchase price and rent, there are many other important conditions that should be outlined in the agreement. Consider the gamut of scenarios for the sale and the rental arrangement and try to head off conflict before running into one of them.

For example, can the terms be extended if the renter can't buy at the set time? If so, for how long, and should the renter be required to increase his or her deposit? What happens if the renter falls behind on the monthly payments? Who pays for the maintenance and repairs of the house?

The eventual buyer should be ready for a vetting process that mirrors most rental applications. Prudent sellers will run credit checks and ask for income and employment verification to make sure the renter can afford the monthly payments.

The worst-case scenario for a seller is getting a tenant who can't pay rent, trashes the place and doesn't buy it.

Similarly, renters should treat the agreement like they're buying a house. Get an appraisal and a home inspection. Check into the seller's mortgage status too. He should be making his monthly bills on time.

"You're taking the normal steps of purchasing a home. You're not skipping out on the work," Healy says.

However, if you're not financially ready to buy a home, don't rent-to-own, says Chris Krehmeyer, a housing counselor with Beyond Housing in St. Louis. Skip the shortcuts. Wait a few years. Create a financial game plan. Clean up your credit. Save a little cash each month for a down payment.

He worries that people will jump into agreements without fully understanding the financial considerations, similar to buyers during the housing boom who signed up for exotic loans they didn't understand and ultimately couldn't afford.

He also suggests contacting a nonprofit credit or housing counseling service to help with the planning.

"We can set you on the path to the American Dream," he says.

© 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

ForSaleByOwner.com Says: Sell Your Own Home  

Last month I took a look at ways to sell your home on the internet, as well as a Realtor's take on going the For Sale By Owner (FSBO) route. It was all part of my quest to make an informed decision.

After these stories ran I was contacted by ForSaleByOwner.com, one of the services I looked at in the FSBO website showdown. I was able to speak with Eric Mangan and Greg Healy to get a better understanding of a typical for-sale-by-owner transaction, as well as greater trends in the sell-your-own arena.

Since price seems to be most important in this buyer's market, I asked Greg how the commonly held idea that consumers don't know how to accurately price their homes fits into the option of going the FSBO route. Greg explained that while the issue of home valuation was a valid concern in the late 80's and even mid 90's, the Internet and open flow of data has enabled consumers to get the same pricing data a Realtor would use for determining a valuation.For example: Zillow.com allows you to not only see pricing information for your own home but sale prices of comparable homes nearby and values of your neighbors' homes. In addition to sites like Zillow, most county auditor websites now allow online access to tax and property records, which provides you with a wealth of information to determine your home's value. On top of these free services, ForSaleByOwner.com provides a valuation with many of its packages. In fact a study by the National Bureau of Economic Research found that using a broker had no significant impact on initial asking price.

The next issue we discussed was the cost of the various experts that are often needed when selling a home such as stagers or lawyers. If you are a first-time seller, you may be as surprised as I was to learn from Greg that, "99% of the time, you'll be paying for these costs whether you use an agent or sell on your own." I was always under the impression that these items were included in the fee paid to a Realtor.

Possibly one of the largest upsides to using a Realtor has been the exposure your house gains by being listed on the MLS, a service which you can only list on by contracting with an agent. Many do-it-yourself sites including ForSaleByOwner.com allow users to list on the MLS for an upfront fee and a smaller commission paid to the buyer's agent. Listing on the MLS can eat into the savings associated with going the FSBO route and may not be necessary unless you are in a hurry to move your home.

Northwestern University compared the selling price and time on the market for homes in Madison Wisc. and found that listing your home on the MLS does not translate into a higher selling price than using a FSBO website. The study did show and ForSaleByOwner.com's website also notes that using the MLS will in many cases reduce the time your home is on the market but this comes at an additional cost of 2-3% of the sale price.

ForSalebyOwner.com also recently released a study which looks at what sources buyers used to find homes over the last 10 years. The study found a pronounced shift in the number of people who find their home using the Internet; in fact it was the only category which experienced growth every year. Since more consumers are finding their new homes through the Internet rather than a buyer's agent, the need for a Realtor becomes less pronounced. Sellers should keep this trend in mind, as it means they are less likely to pay a buyer's agent commission. Personally my wife and I have been using the Internet and our local newspaper to look for homes in our price range, which isn't to say that we won't use a Realtor in the future. But if we find the house we love online, we'll be contacting the seller directly.

Throughout the process of talking with a Realtor and perusing a for-sale-by owner site, I've discovered quite a bit about the home selling process, both of which have their pros and cons. After learning about the step by step seller's workbook that ForSaleByOwner.com provides and the percentage of people who are using the Internet to find homes I can definitely see myself trying to sell my own house with an online service such as ForSaleByOwner.com.

Before you make your decision you should definitely read a Realtor's opinion of the for-sale-by owner route and make sure you educate yourself about the pros and cons of each option in order to find the selling method that is the best fit for your market, life and home!

For Sale By Owner  

Frank Grove is not an expert in real estate but that's not keeping him from selling his house on his own.

"One of the things that my wife and I talked about was that no body knows this house better than we do," says Grove.

With that, and the help of the website, forsalebyowner.com, Grove and his family's home are open for business. Grove says, "It's really been a good help. We've had a lot of hits. The last time I looked at it we had over 900 hits."

The company is designed to help people sell their home without an agent.

According to the forsalebyowner website, it can save you thousands of dollars in agent commission fees.

"Six percent is a lot of money. In today's economy it makes a difference," said Grove.

Guy Gunn is the senior vice president of residential sales for Fickling and Company. He says selling a home is a complex transaction with some risks involved.

"That's sort of the name of the game. You're going to be meeting strangers and inviting them into your home without anybody else there like a real estate agent to accompany. There's an old saying that anybody's job is easy until you have to do it yourself. So I would say people are in for some surprises when they try that and some frustration," said Gunn.

Gunn says it pays to have a professional to walk you through the entire home selling process.

"Your home is your largest family investment whether you are a buyer or a seller."

Gunn says he's had clients who have failed at selling on their own.

"Other times the worse situation is people have had their home sold or so they thought and it tied them up for a significant period of time," said Gunn.

As for Grove, he's sticking to his first option.

"It's been a little frustrating but I'm optimistic," says Grove.

He's being patient about taking a stab at selling real estate in a market that's not what it used to be. Forsalebyowner.com charges an up front fee that ranges from 64 to 600 dollars.

Eric Mangan, the director of media relations, says for competitor purposes they don't disclose year to year numbers on sales and inventory. But on the main page of the forsalebyowner website, it says over 100 thousand homes sold. According to Mangan, the company has been in business since 1999.


The pros and cons of FSBO  

MIRAMAR, Fla. -

Despite the glut of homes on the market, falling prices in many areas, and competition from bargain-basement foreclosures, plenty of homeowners still want to sell their properties without a real estate agent.

For the intrepid and value-minded homeowner, selling a home without an agent has some distinct advantages: saving the typical 6 percent commission, no conflicts of interest, and more control over the process.

But going solo also can be time consuming and mentally challenging. Sellers must research the market, advertise and show the home, negotiate with buyers and learn the legal and financial details behind real estate transactions.

"The majority of people that use our services are independent-minded folks," said Greg Healy, vice president of ForSaleByOwner.com. "A lot of these people want to sell the property on their own for the feeling of being successful ... They're going to know the best features of their property better than some agent who is going to some in and ask them a million questions."

One of his successful clients was Jim Seidel, in Miramar, Fla. With skidding prices and slow sales, Seidel wanted to avoid paying the commission.

He noticed a neighbor was being foreclosed upon and the house was for sale. So he found out the price, and slashed his asking price on his Internet listing by about $100,000 to $355,000, and sold his home in just five weeks.

"Obviously we wanted to save money in commissions," said Seidel, a clinical specialist for pacemakers. "We wanted to sell it right away, rather than wait, because we figured the prices would keep falling. We did a quick price comparison and we priced it fairly."

Of course, real estate agents have their benefits. They have access to the Multiple Listing Service, which advertises homes for sale to other agents, and contain property details and sales transaction data. The agents pay for advertising and marketing costs, and can often devote more time to showing the property than an owner.

The ideal agent also has a more sophisticated knowledge of the local market and contract laws, and can provide negotiation and screening skills that are integral to securing a buyer. The ideal agent also knows how to prepare a home for sale.

"The value that a Realtor brings to the transaction is helping a buyer sort through all the information," said Walter Molony, a spokesman for the National Association of Realtors. "Buyers want negotiation skills ... If you don't have an intermediary, you can be at a disadvantage."

Last year, 12 percent of sellers skipped the real estate agent, down a peak of 18 percent in 1997, according to an NAR survey. Why? The complexity of real estate transactions has increased, as has the time it takes to market a property, according to the survey.

But spending that time may be worth it for some sellers.

A study last year by Stanford University analyzed housing transactions on its campus over 26 years. It found that using a broker did not significantly affect either the average initial asking price or the average selling price of a home in the sample - indicating that brokers did not "pay for themselves by obtaining prices high enough to offset their commissions."

However, the Stanford campus study did show that using a broker did lead to a quicker sale, suggesting that brokers can add value to the entire process.

Seidel's approach was unique, in that his father-in-law is a real estate agent and had access to the Multiple Listing Service. He paid a 1 percent commission to BuyOwner.com, which provided an online listing and connected him with a title company.

Seidel showed the house just one weekend, and in the end saved about $17,000 off the standard agent's commission. He also learned a key lesson in sales - remove emotions from the process.

Like ByOwner.com, other online listing services - such as FSBO.com and ForSaleByOwner.com - have packages that are priced differently, based on services provided.

For example, ForSaleByOwner.com has packages ranging from $89.95 to $899. Basic features include an online listing with color photos, and printable flyers. Packages also can include yard signs, a report with data on up to 20 recent sales in the area, and even an MLS listing.

After researching the Internet, sellers then should learn about pricing in their area, realizing the tried-but-true cliches that "All real estate is local."

Access to the MLS would be great, but daily driving tours of the neighborhood also are useful because sellers can pinpoint homes with for sale signs on their lawns and question the owners on how much they are asking and how much interest their are getting.

Then, it's time for a key step: Decide on a fair price based on your home's size, age, appearance and location. Choosing a price that's too high could limit the amount of buyer interest, while pricing it too low cuts into profits.

Next is preparing the home for buyer visits. Small fixes, such as changing old doorknobs or musty curtains, rearranging or removing furniture, and cleaning the garage can improve the appearance of a home. An inspector should be hired to check for any needed repairs. Attend other open houses to learn tricks in showing the home.

"We talk to people all the time who put their home on the market and they are just not ready, they have not prepped their home," said Healy of ForSaleByOwner.com. "People are just turned off by that."

Marketing comes next, with newspaper advertising, flyers, yard signs and Web sites such as craigslist.com providing several options in addition to the "for sale by owner" Internet sites. Healy recommends that sellers live in or near the property to quickly respond to potential buyers who want to visit.

When a buyer is found, a price is negotiated. Sellers can hire a lawyer to help with negotiation and legal matters, and either hire their own title company or get one through one of the Web sites. The title company and/or the real estate attorney can help sellers dot the i's and cross the t's on the paperwork, and close the deal.

Copyright 2008 Associated Press. All rights reserved.

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.”

 

Selling Your Home On Your Own  

(CBS) Many people selling their homes in this very trying market are doing it solo -- without the aid of a real estate broker or agent -- so they don't have to pay the commissions such providers get -- typically six percent of the sale price. Agents contend you'll get more money for your home and sell it more quickly if you use them. But, explains Early Show money maven Ray Martin in the column below, if you choose the "FSBO" route -- there are several strategies you could use to up your chances of being successful.

As the housing market downturn continues, one thing is clear: Folks are having a tough time selling their homes. And if that isn't enough to concern home sellers, here's another: the commission you'll have to fork over to real estate broker.

Paying six percent of the selling price to a broker can often mean the difference between breaking even on the sale or having to dip into your savings. With the median home price at about $215,000, paying a typical six percent commission to a realtor can amount to almost $13,000. If you sell your house for what you owe on your mortgage, you'll have to dip into your savings just to pay the realtor.

Some sellers look at the issue this way: Paying a commission to a listing agent is money paid to a person who does nothing more than put your home on the Multiple Listing Service. When another agent sells your home, the listing agent collects half of the commission. Others say listing a house with an agent can provide marketing advice and save time and the hassle of arranging showings, all of which is worth the commission paid to the agent.

For these reasons, For Sale By Owner, aka FSBO, pronounced “fizbo,” without the help of an agent, is an option that seems to be gaining the attention of more home sellers.

It can be a good strategy when your home is in a desirable area, at a price that is affordable to a lot of potential buyers, where a home like yours is in short supply.

There are conflicting numbers on how many homeowners are selling their homes themselves, but industry reports suggest as many as a quarter of home sellers try to do it solo. The average number of days on the market for FSBO sellers is about 114, and about 12 percent actually close, fetching about 96 percent of their asking price.

If you are considering selling your home yourself, it's wise to consider this advice:

Think Like a Buyer: It's important to keep abreast of the trends and what is working to sell a house. The National Association of Realtors Profile of Home Buyers and Sellers can be of some help to home sellers.

In order to successfully sell a home, you'll need to think like a buyer. A report from the National Association of Realtors helps with these insights:

Most buyers use the Internet to search for a home. Such use has risen dramatically over the past few years and now, over 77 percent of buyers report doing so.

Buyers first learned about the home they bought from three main sources: 36 percent from a buyer's real estate agent, 24 percent from an Internet search, and 15 percent from yard signs.

A typical buyer visited nine homes, conducted their search for eight weeks, and bought a home an average of 12 miles from their previous residence.

The take-away from this is that it is critical to your selling success to get your home listed on the Internet and to attract the attention of a large number of real estate agents in your local area.

There are many services where you can, without using a traditional real estate broker, get your house listed on your local area Multiple Listing Service, thus avoiding paying a commission to a listing broker. In doing so, you can still offer to pay a three percent commission to a selling agent, thus creating an incentive to show and sell your home.

But, while every home seller should try to save on real estate broker commissions, being your own real estate broker is not for everyone. There are some things you will need to pay careful attention to:

Set the Right Price: After getting a listing on the MLS, this continues to be the single most important factor in successfully selling a house. The housing market is constantly changing, and you really need to have a good feel for the market and good information in order to set the right price to sell your home. Not only is a home the biggest purchase most people make, it's also the biggest asset people have to sell, and setting the wrong price can cost you real money. You don't want to leave money on the table by setting a price that's too low, and you don't want to scare buyers away by asking too much.

But here is another thing to think about: A successful pricing strategy in a buyers' market is much different than in a sellers' market. In the latter, you would typically set the price for as much as you can get. But in a buyers' market, where competition for a limited number of buyers is fierce and the supply of homes is high, sellers are advised to research the market and set the price at the low end of their competition. Pricing at the lower price point of comparable homes will ensure that your house will get the attention of bargain-hunting buyers.

When setting the listing price for your house, use round numbers, in increments of $5,000. According to industry professionals, buyers who use the Internet typically will search in increments of $5,000. So a listing at a price of $250,000 will turn up in more searches for homes priced at $200,000 to $250,000 and $250,000 to $300,000.

Get the Word Out: Putting a "For Sale" sign on your lawn is probably not going to sell your house. To know why, just think like a buyer. Most buyers don't have time to drive around neighborhoods, searching for signs. The fact is that most buyers will begin their search either on the Internet or by asking a realtor to search the listing services of the local market for them. When a home is “listed” with a broker, they place information about the house in the area's Multiple Listing Service (MLS). That alerts all real estate agents in the area that your home is for sale. The MLS also makes it easy for other realtors with access to the MLS to search for a home by location and price range, and if yours fits their search criteria, they will show it to potential buyers.

Consider All Offers: Selling a home is one of the most emotional transactions you'll ever make, second only to buying one. Mixing emotion and a large financial transaction is never a good thing. If a buyer comes through the door and immediately points out your home's flaws instead of the beautifully restored floors or newly painted walls, it's likely to hurt your feelings. You may be tempted to turn down this buyer's offer, even if it's for a fair price. This is where a realtor can help, by showing a home and selling its features to would-be buyers and keeping the colorful comments out of the report back to the seller. To the realtor, it's not a home, it a deal, and a deal they want to get done so they can get paid!

Despite these pitfalls, I'm not trying to steer people away from selling their homes themselves. You need to be aware of the pitfalls and, if you think you can tackle them, give it a try, particularly if your home is of the price, size and location that is in demand or in short supply in your locale. Remember, you can try the FSBO route for a set amount of time, and if you're not successful, you can turn to a broker. Some sellers even report that they first unsuccessfully listed their home with a local real estate broker, only to re-list using FSBO and sell successfully later, saving money in the process.

If nothing else, use the knowledge that you “could” be your own broker to NEGOTIATE a lower commission with a broker. That storied six- percent is a result of tradition, and nowhere does it say that you HAVE to pay real estate brokers a six-percent commission.

FSBO Alternatives

There's no question that there are a lot of services targeted to sellers looking to go FSBO. If you are looking for an alternative to a traditional six-percent real estate agent, some of the options that are becoming popular include:

• Flat-Fee Brokers: These are companies such as Help-U-Sell and Assist-2-Sell. Both are franchises that offer to connect you with the offices of local licensed real estate agents who subscribe to their low-cost realtor business model. You agree to show your home yourself, they perform all other duties of a traditional broker, such as advertising, marketing, helping with contracts, and even arranging inspections. The best part: You pay them one flat fee that varies based on home's value, location, etc. If you pay them a little more, the realtors from these companies will show your house, too. They can also list you home on the local MLS, but if they do, and another brokers brings you a buyer, you'll have to pay that broker their commission of 2.5 to 3 percent.

• For Sale By Owner: Other companies, such as FSBO.com and ForSaleByOwner.com, offer home sellers a variety of marketing options at different pricepoints. You can choose to have your home listed on the companies' Web sites; you can pay more and have yard signs and color brochures designed for your home, and pay even more and have a virtual tour included in your home's listing. Each company is different and offers different listing packages, which can include listing your house on the local MLS -- the same place a real estate agent would list your home. Again, there's the catch: If a buyer is brought to your home by an agent who saw the listing on MLS, you DO have to pay that broker's half of the traditional commission, which is two to three percent.

• Negotiate Brokers Commission: There is no law stating that you have to pay a six-percent commission. As a matter of fact, commissions now average a bit over five percent, according to a survey by Real Trends publishers. If your home is an above average-priced home in a market where homes like yours are in short supply, you should have a serious conversation about a reduced commission with any prospective broker who asks to list your home. If you list your house with a real estate broker, they will charge you a five-to six percentage point commission when your house sells, even if all they do is list your home. But if you list your house on the MLS using one of the services above and a real estate agent brings you a buyer, you will only pay the commission charged by the buyer's agent, which is typically half the amount charged by a listing real estate broker. Use this point and your knowledge of how your house compares to the supply on the local market to drive your negotiation for a lower commission.

Housing market slump in full effect  

Jill and Jim Gallagher placed their Westminster home on the market nearly 10 months ago, and it’s still sitting there today.

In today’s real estate market, however, this is nothing out of the ordinary, as houses are staying on the market much longer than in previous years before the real estate bubble burst and the credit crisis began, said Russ Blackburn, president of the Carroll County Association of Realtors.

Luckily for Jill Gallagher, her family wasn’t in a terrible rush to sell their home and they were able to relocate to their new home elsewhere in the county while waiting for their old one to sell.

According to Blackburn, there’s a high housing inventory right now for buyers, which means there are too many choices for buyers and more competition for sellers.

“At the current time there’s about 1,300 homes on the market in Carroll County,” Blackburn said. “That’s higher than usual.”

Blackburn said more houses are continuing to add to the inventory than are being disposed of. In July, 281 new county listings went on the market, while just 90 properties went under contract to be sold during that same month, he said.

The average number of days a house remains on the market in Carroll County currently is 125, while in 2007 it was 110 and in 2006 it was 65, according to the CCAR.

Home values are also down from recent years in today’s market, and Blackburn blamed numerous variables for that. Factors contributing to the lower property values include the higher housing inventory, inflation, the uncertain economy, sellers competing with foreclosures and sellers taking any “reasonable offer” after an extended amount of time on the market, he said.

Jill Gallagher said she thought her home was listed at a fair price, with the $310,000 asking price below it’s tax assessment.

“We think that we’re asking a fair price, however if it sits another six months we may consider lowering it,” Jill Gallagher said.

Jill Gallagher and her husband are attempting to sell their house themselves without the aid of a real estate agent by listing the house on www.forsalebyowner.com. Prior to listing the house online, Jill Gallagher said they placed a sign in the front yard and used a broker in Virginia to get multiple listings for the house. “It seemed as though houses weren’t moving one way or the other whether you listed it with a real estate agent or not,” Jill Gallagher said. “Financially we can save a few thousands [of dollars] and it just made sense.”

Two offers have been made on Jill Gallagher’s house so far, she said, but in both incidences the buyers couldn’t get the financing they needed so the offers weren’t able to materialize into a deal.

According to Blackburn, banks are being more selective about giving out loans these days.

“You can throw their previous requirements out the window,” he said.

The quality of buyers in today’s real estate market is more important than in the past, but Blackburn maintained that there is money to be had out there for people with good credit and a good credit history. But Blackburn said despite public perception, homes that are in good condition with a competitive sale price are selling.

“I think advice to give to sellers is they have to have their house in excellent condition … uncluttered and because we live in an electronic age … ready to show at all times,” Blackburn said.

Going solo vs. hiring an agent  

The moribund housing market has put a new spin on that eternal real estate argument: Should you hire an agent or sell the place on your own? What's new is that, in this age of rising anxiety and falling prices, being able to hang on to the commission might well mean the difference between coming out ahead or taking a bath.

"Many people are turning to us because they've worked with agents for six to 12 months and they need to change direction," said Greg Healy, vice president of operations for ForSaleByOwner.com, which provides services to FSBOs. "Hiring an agent is a luxury that many people cannot afford."

For some sellers, every nickel can be critical in a climate of generally declining prices: The Standard & Poor's/Case-Shiller monthly study, for example, showed Chicago-area prices dropping 9.4 percent in May from a year earlier.

Healy suggests that 20 to 25 percent of sellers now try it alone—though it's unclear what percentage of those close the deals. The National Association of Realtors in March said the percentage of FSBO sellers that succeed on their own had fallen to 12 percent in 2007 from 18 percent in 1997.

"The odds have not been worse, in my memory, for someone to try and do it themselves," Jim Merrion, regional director for Re/Max Northern Illinois, said of the increase in for-sale-by-owner listings. He said brokerages are seeing a wave of clients who have gone the FSBO (pronounced "fizzbo") route and given up.

Still, a recent poll of its users by FSBO.com, another by-owner listings site, says that though the average number of days on the market for FSBOs nationwide lengthened to 114 from 93 in the second quarter, those who sold averaged 96 percent of their asking prices.

Merrion estimates that Chicago-area commissions average 5 to 5.5 percent, a figure in line with some industry studies. It's also a number that had a big effect on Ed Corboy Jr., who in mid-July put his Wilmette townhouse on the market for $449,900, aiming to sell it himself.

He said he did extensive research, and he's willing to give the effort at least 10 weeks.

"If I were going to list with an agent, I would have added another 10 percent to the price," he said. "But I realize by doing that it would put me in a price bracket that's higher, and would eliminate some potential buyers who wouldn't qualify for the [higher] mortgage."

And, with a 5 percent commission, would have cost nearly $23,000.

After about one month on the market, Corboy estimated he had spent about $970 for print and online advertising. And he—aided by relatives and friends—had hosted seven open houses, some of them on Saturdays. He says 45 to 50 people have seen the place.

But the asking price came down, fairly quickly, to $429,900.

At midweek, he said he believed he had two interested parties, who had asked for copies of the townhouse's homeowners association bylaws—though no firm offers had materialized.

A couple of open-house visitors had told him they would like to buy his property—if they can sell their homes first. He says he's not discouraged.

"I've done my homework, I know what else is out there, and I know I have the best value on the market," Corboy said. "If it takes 10 weeks of open houses every Sunday, then so be it."

That's what Jill and Michael Sylvester thought when they set out to sell their Old Town condo in November. After advertising it online and numerous showings and open houses—and no offers—they called an agent in May.

"The reason we went on our own was to save ourselves the margin, the commission," Michael said. "But there is a certain point where my time and my wife's time are worth something, and we feel that all the time and effort we put into it on our own, we could have had somebody else doing it for us. The cost will be about the same."

"They got worn down," said @properties agent Dana Gerstenschlager, who brought in a stager to furnish several rooms of the vacant, fourth-floor walk-up, at a cost of $3,000, paid by the Sylvesters. He also has hosted open houses, sent out mailings and placed listings at numerous online sites.

The couple's listing agreement sets the overall commission at 6 percent, Sylvester said. At midweek, Sylvester estimated the unit was getting half a dozen showings a week.

Gerstenschlager also got them to lower the price, to $500,000, including parking, from $535,000, he said.

"Today, the seller, more than anything else, needs a coach," Merrion said. "The big mistake I see happening most frequently when properties haven't sold is that nobody sat the seller down to give them the facts of life."

But Healy said those "facts of life" are widely available.

"No one needs an agent, is what we tell people," said Healy, whose firm is owned by Tribune Co., which publishes this newspaper.

He said the home-sale process has three major components. "You need to be able to price your home, market your home and transfer the title."

For the first, the gateway to pricing information has been opened for consumers, he said. "With the advent of the Internet, you can find comparable-sale data and current market conditions at your fingertips—this is open and free information."

The Internet also has simplified marketing, he said, with dozens of companies, including his own, that will place homes on local multiple-listing services and myriad other sites. His company offers services for FSBOs that range from $90 to $899; he said many firms will charge $200 to $300 to just place homes on MLSs.

Real estate lawyers and title companies can handle the third need—title transfer and other services for a closing, he said.

Merrion, too, sees three issues, which he says call for an expert.

"What kills a lot of FSBO deals is that they aren't equipped to handle what I call 'the hurdle trinity,' " he said. "First you have to clear the inspector hurdle, then the appraiser hurdle and the lender hurdle.

"And you'll have other issues come up, and those really frustrate somebody who is trying to sell by himself," he said, citing legal disclosures and haggling.

"They have a difficult time negotiating—they get aggravated with the buyer because it's person-to-person and you don't have the benefit of a buffer, of an agent in between," he said.

Pricing, Merrion said, is no easy task in this market. "Sellers say, 'what's at the top of the market?' And they price it that way. But today, you have to see that there are 12 other competitors and you have to go to the bottom of that list, just get under those, and you'll automatically get more traffic."

All this said, neither the Wilmette townhouse nor the Old Town condo has sold.

Click on a Home  

More homebuyers are using the Web to find the home they end up buying, a new Web report said.

Some 34% of buyers found their homes through a real estate agent in 2007, a 16% drop from 1997, according to ForSaleByOwner.com. During the same period, the real estate market has seen a 15-fold increase in buyers who used the Web to find the house they ultimately bought.

 

Technology That Can Help With a Home Sale  

In a recent story called the Virtual Vacation Home, I wrote about how some vacation home owners are using inexpensive Webcams to market their homes on the Internet. Since the vast majority of buyers and renters start looking for a place on the Web, it makes sense to add a webcam to your home's online profile.

But Webcams aren't the only unusual way that sellers and landlords are using technology to make their homes stand out. In fact, many owners are borrowing tools that were originally marketed to real estate agents to make them more interactive and compelling. Here are three that are becoming more popular:

Virtual tours: Though they take a lot of time to view and sometimes make you dizzy, virtual tours are nearly ubiquitous on real estate agents' Web sites these days. That wasn't true a few years ago, because the tours required hiring photographers with special cameras, at costs running into the hundreds of dollars.

But costs for professional photographers have dropped dramatically. And with a rotating tripod, a photo-stitching system, a digital camera -- and a lot of patience -- do-it-yourselfers can produce virtual tours, too.

Once you have the video in hand, you can upload it on your home's Web site, or on one of several sell-it-yourself Web sites, like ForSaleByOwner.com and BuyOwner.com.

Real Estate E-Cards. Hoping to cash in on the e-card craze, August Gilges, an entrepreneur in Portland, Ore., came up with the "real estate e-card": a short photo montage of a property set to background music, from a crackling fire to a string quartet. Though an e-card might seem too commercial for sending season's greetings to Grandma or declaring your love to your Valentine, it's a relatively low-key way to alert potential buyers that your house is for sale, particularly in the traditionally slow times around major holidays. Single-use cards themed to an event (think a backyard grill for Memorial Day) cost $20, while an annual subscription with unlimited use of all the cards is $150. Or, if you're happy with a single image rather than a photomontage, you can make up a card for free on Ecards-gallery.com.

Talking signs. On their face, chatty yard signs are simple, even mysterious. Interested parties can call a toll-free number and plug in the digits for more information, like location, price, size and maybe a description of the built-in backyard grill or the Tara-like staircase. The spiel runs 24 hours a day.

That's an advantage for sellers, who don't have to run out and replenish printed listing sheets in a plastic box on their front yards. But it's also a risk, since buyers who don't have cell phones handy might lose interest and drive on by.

Nevertheless, talking signs have become so cheap in recent years that they're worth considering. For example, Front Royal, Va. company Home Phone sells a 18- by 24-inch talking yard sign for $10.95, plus a $2 monthly fee.

Best of all, they allow an owner to keep embarrassing details, like whether the house will be auctioned or is in foreclosure, out of sight of the neighbors...if not out of earshot. 

More ways than ever to find that dream house  

In the beginning, home buyers hired real estate agents because they needed information. How else to know which homes were for sale? Or what price was fair? Or the proper reaction to a form that said your children might be poisoned by lead?

Agents served buyers not just as personal shoppers, but as personal reference libraries, constantly available to translate obscure language, to validate decisions, and to offer the comfort that you were making the same choices as other people.

All for a handsome fee. The buyer paid for the home, and the seller gave 3 percent of the price to the buyer's agent.

As it has done to other businesses, the Internet is changing the real estate industry. A 2007 survey by the National Association of Realtors found 84 percent of buyers now use the Web to search for homes - the same share that use a real estate agent.

Many buyers simply search directories created by the traditional real estate industry, the so-called multiple listing services where companies list properties available for sale. A limited version of these listings is widely available, but increased access generally requires signing up for access to an agent's website. And even then, some of the data usually remain hidden from public view. Online real estate start-ups such as Redfin.com offer discounted access to complete MLS listings.

Meanwhile, sellers and their agents also are listing the same properties on open services such as those found at Yahoo.com, Google.com, and Craigslist.com. Some properties listed on those sites - and others like ForSalebyOwner.com and FSBO.com - cannot be found in the MLS directories.

As a result, buyers have more ways than ever to search for a home.

For example, Trulia.com offers "heat maps," or color-coded maps of property values that can help shoppers figure out which parts of a metropolitan area are in their price range.

Google Maps (maps.google.com) lets users search by zooming in on a geographical area. The search can be further restricted by standard attributes such as price, or the number of bedrooms and bathrooms. The site also allows users to search for particular language in the listing, such as "fireplace" or "slate roof."

Once you've found some homes to visit, you can turn to the aptly named IdealRoute.com, which mimics another classic agent duty - mapping out a day of visits to homes. The site was created by the Virginia Association of Realtors for the benefit of its members, but it works just as well for others. Type in the addresses of several homes you'd like to visit, and the site returns directions for the quickest route.

Once you've found a desirable home, it's time to take the measure of the surrounding neighborhood. While online tools are no match for a good conversation with a longtime resident, and some are more mesmerizing than practical, they increasingly offer answers to the most basic questions.

Trulia.com integrates information about schools, including a quality rating from GreatSchools.net, into each property listing. Less helpful is TruliaHindsight, an interactive map that shows the development of a town over time.

Walkscore.com allows users to quickly survey neighborhood amenities for a given address, including the nearest supermarkets and drugstores, coffee shops and bars, parks and libraries. The information is presented on an interactive map, with a score summarizing the "walkability" of each neighborhood.

And in many cities, it's possible to find online crime maps that can help you judge the safety of a neighborhood, such the map of violent crime in Boston at UniversalHub/Crime.

The Internet also makes it easy for armchair analysts to research property values. Most counties have put property records online, making it simple to check the past sales prices for a particular home. Prospective buyers also can check the square footage figures used by the county - often lower than the figures listed by the real estate agent - and the taxable value of a home.

Sites such as Zillow.com return immediate information on the sales of comparable properties. And several services, like Domania.com, allow buyers to purchase an automated appraisal of a property's value - the same kind of automated assessment used by many mortgage companies to check the work of appraisers. Domania charges $30.

Many buyers still prefer to work with a real estate agent, of course - they might not have the time or inclination to do their own research. Or they decide an agent with years of experience can conduct research more effectively. But the Internet does give do-it-yourself buyers an opportunity. And that is a fundamental change.

ForSaleByOwner.com Distributes Listings Through Facebook Application  

ForSaleByOwner.com, a Web site that allows homeowners to post information about their own for-sale homes, announced today that its listings will be included in the Cribfinder application on the Facebook social networking platform. Starting today, all ForSaleByOwner.com customers will have their property listings automatically posted to Cribfinder at no additional cost, enabling customers to locate homes in the Facebook community.

Cribfinder is owned by Jenius Industries Inc., an Internet company specializing in Facebook applications. ForSaleByOwner.com, which syndicates property listings on other sites, including Google Base, Yahoo.com, USAToday.com and AOL.com, also offers Florida home sellers with real estate-related prepaid legal services.

Do You Need an Agent to Sell a Home? (Day 2)  

Note: ForSaleByOwner.com participated in a U.S. News & World Report online debate on the subject: "Do you need a real estate agent to sell your home?"

A Realtor opened on Day 1, and ForSaleByOwner.com responded on Day 2 (below).
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What we're here discussing is whether an agent is needed to sell a home, and the answer to this question is "no." To put this more clearly, an agent is not required—legally or otherwise—to be part of any real estate transaction. Of course agents are part of the marketplace and people can choose to use their services, but they should be mindful that an agent charges an expensive commission equal to 6 percent of a home's purchase price. That's $18,000 on a $300,000 home.

To figure out if hiring an agent is worth losing that 6 percent of home value, let's ask ourselves some questions:

Is an agent needed to put a home on the MLS? No. Websites like ForSaleByOwner.com have access to put listings on the MLS.

What about to market a home? Again, the answer is an emphatic "no." Even the agent's own trade group—the National Association of Realtors—says that more than 84 percent of buyers go online to search for homes, up from 2 percent in 1997. This tells us that sellers don't need agents to market their homes but rather a quality Internet site to do the marketing work. Listings on our website, for example, get in front of 2 million people.

How about to price a home? Nope. There are plenty of online pricing reports and professional appraisers that can price a home better than an agent can.

But who gets the most money for a home, an agent or a FSBO? According to studies from Northwestern and Stanford universities, FSBO sellers are as effective at maximizing their home price as agents. Further, once commissions are factored into the equation, the FSBO seller came out ahead financially.

My debate counterpart, Jay Thompson, used part of his remarks to talk about the complexity of a real estate sale. There's no denying that there's some paperwork to handle, but Jay didn't point out that a real estate attorney and/or title company can handle most, if not all, of the paperwork for the seller. An attorney can be hired for less than $1,000, which is just a fraction of the cost of an agent's 6 percent commission.

In today's market, it's important that people know the benefits of going FSBO. Home prices have dropped by more than 15 percent nationwide. Since commissions cost another 6 percent, having an agent is a luxury that too many people simply cannot afford.

PrePaid Legal Services in Fla. a 1st Step in FSBO Co.'s National Plan  

A real estate listing service that focuses on for-sale-by-owner properties is now offering to home sellers what it says is a nationwide first--an opportunity to purchase prepaid legal services for their real estate deals at below-market prices.

While the legal services, which are being provided by Spira, Beadle & McGarrell, are now available only in Florida, "this is something we would want to roll out to the other 49 states," says Eric Mangan, the director of media and consumer relations for ForSaleByOwner.com.

Home sellers are offered three options--attorney consultation, over the phone or by e-mail, for a total one-time fee of $169; attorney review of up to two real estate purchase contracts (assuming that one deal might fall through) for a total fee of $299; and a combination of both attorney consultation and contract review services for a total fee of $369.

Fair-market prices in Florida for these services are $300 per hour for legal advice and $400 to review a real estate purchase contract, Mangan tells ABAJournal.com in a telephone interview.

The company's Florida prepaid legal services have been approved by the Pre-Paid Legal Committee of the Florida Bar, he says, and would have to be approved by comparable groups in other states, too, before they could be offered there.
 

The Lure of Cutting the Middleman  

Selling a house is often a tricky business even in the best of times, but in a down market like the current one, realizing a profit is increasingly difficult. That is particularly true for owners who bought when prices peaked three years ago and now want to move.

For sellers who have watched the prices on their houses slide in recent months, the idea of eliminating the middleman — a real estate agent and his or her 6 percent commission — can be alluring.

Like Libi and Sanjay Varghese, a Yonkers couple with a four-bedroom colonial for sale, many sellers in today’s market are turning to online for-sale-by-owner Web sites to eke out whatever profit they can or to minimize their loss.

Mr. and Mrs. Varghese are asking $624,000 for their house, which they bought two and a half years ago for about $30,000 less. The couple are relocating to another state where Mr. Varghese, a pharmacist, has a new job. Seeking to avoid paying a commission to a real estate agent, they listed their house on HomesByOwner.com, which started in 1995 as one of the first for-sale-by-owner Web sites.

Such sites try to demystify the process of selling a house. Many offer customers a variety of assistance, including advice on how to advertise, design a flier, complete the required paperwork, prepare a property so it shows well and act as a host for open houses.

For a fee of $129.99, a seller on HomesByOwner.com can buy a package that includes an online slide show of pictures of their home, yard signs and Web advertisements. Other online sites popular with home sellers include ByOwner.com, FSBO.com, owner.com, owners.com and zillow.com.

The premium package that Mr. and Mrs. Varghese chose included ads on Yahoo Real Estate, among other sites.

Not surprisingly, real estate agents say that couples like the Vargheses could face difficulty in trying to sell without help, especially in a weak market. The credit squeeze, they say, is complicating sellers’ problems.

In fact, two months ago, after a couple of deals for their house fell through, Mr. and Mrs. Varghese selected an option offered by HomesByOwner.com to have their house listed on the local multiple listing service but still without a contract with a specific agency.

In the Westchester area, the listing costs about $500, said Wayne Strobel, the president of HomesByOwner.com. If Century 21, which is listed on a sign on the Vargheses’ lawn, or another agency were to sell the house, it would receive a 2 percent commission.

Brokers, of course, believe that during a market slump, sellers need more professional representation, not less. As P. Gilbert Mercurio, the chief executive of the Westchester County Board of Realtors, observed, “This is far from the best time to be out there on your own trying to assess a buyer’s creditworthiness.”

He said many sellers were unaware of financial tools that might be helpful — like, for example, a short sale, in which a lender forgives some of the money owed on the mortgage, enabling the owner to sell the house for less than the full mortgage amount and still head off foreclosure.

Mr. Mercurio estimated that in Westchester, 85 percent of sellers who start out as do-it-yourself sellers end up working with a real estate agency “once they get a taste of how difficult it can be.”

The risks of going it alone notwithstanding, the lure of online sales remains especially appealing to “that first group of people who are now seeing their houses worth less than when they purchased it a few years ago,” said Eric Mangan, a spokesman for ForSaleByOwner.com.

Before the downturn, homeowners often realized a profit even after only two or three years because prices were rising so fast, he said.

Caught in a down market two years after buying a two-bedroom luxury condominium in White Plains, Evan and Meg Kaplow believed they were prime candidates for a for-sale-by-owner transaction. Hoping to take advantage of the slow market, they want to buy a house in Chappaqua, but first they needed to sell their condo.

Internet-savvy, they studied information readily available on a variety of Web sites about pricing and showing a home. They have not yet received an acceptable offer for the condo, which is on the market for $659,000, but Mr. Kaplow, who owns an insurance agency, said he did not want to turn to a real estate agent because his potential profit margin was so slim.

For Mr. and Mrs. Kaplow, the sales commission on their condominium would be $39,540. By contrast, the online firm charges $89 to $899, depending on the advertising and real estate resources offered in its various packages of services.

The National Association of Realtors has conducted research showing, it says, that do-it-yourself sellers do not come out ahead financially if they rely on the Internet to attract buyers. According to the trade group, homes sold with the help of real estate professionals went for an average of 32 percent more in 2006 than for-sale-by-owner transactions. The median for-sale-by-owner selling price in 2006 was $187,200, compared with $247,000 for agent-assisted transactions, it said.

But these findings were disputed by a study last year of the residential real estate market in Madison, Wis., by researchers from the department of economics at Northwestern University and from the departments of economics and of real estate and urban land economics at the University of Wisconsin.

The research found that listing a house with a multiple listing service in Madison did indeed shorten the time it took to sell the property. But the authors concluded, “We do not find support for the hypothesis that listing on the M.L.S. helps sellers obtain a significantly higher sale price.”

Meanwhile, many sellers seem increasingly discouraged in the current market, Mr. Mercurio reported. Both sellers working on the Internet and those who have properties listed with agencies are struggling to make sales.

At ForSaleByOwner.com, Greg Healy, vice president of operations, said that the number of sellers listing homes has dropped this year, although he would not give specific numbers.

As for Mr. Kaplow in White Plains, he vowed, “I’m not going to settle.” He and his wife have decided to try to buy a new house and to offer their condo for rent, with the idea of waiting out the downturn before selling it.

Banish the Broker: Sell Your Home Yourself  

If you think it's hard to buy a home in today's real estate market, with jump-through-hoops loans and the fear of overpaying, try selling your home.

You've got sleepless nights thinking about how much you can afford to let your price drop, all the while working with a real estate agent who's trying to juggle a notebook of unsold inventory and can't remember your first name. And on top of that, you have the average 6% commission you'll pay this person to sell your home. For a home that sells for $500,000, that's $30,000.

As the economy gets tougher and less certain, more sellers are looking to save by being their own broker. In the past, For Sale by Owners (or FSBOs as they're called) were mainly real estate pros selling their own homes or cranks who didn't trust realtors, banks, the government or anyone who dressed up for work. Today a number of companies and Web sites are available to walk sellers through the do-it-yourself process.

"I've seen many people who come from jobs where they're responsible for huge sales and transactions, yet they're a little squeamish about handling their own home sale," said Eric Mangan, director of consumer relations for ForSaleByOwner.com in New York City. "Once they learn how home sales work, they realize they can do it, and they can save themselves quite a bit of money."

Advertise Online

The first step is learning about marketing a house on your own, which in today's world means taking a little old-school water cooler talk (e.g. "You know anyone who's looking to buy a home?") and spicing it up with the Internet.

The experts recommend getting the word out by talking to friends, family, neighbors and co-workers that you've got a home to sell. You can advertise it for free on Web sites like Craigslist.com and Zillow.com. You can also create an inexpensive or free Web site that features more details about your home, additional photos and a home-made video tour of the house and neighborhood. Craigslist and Zillow will let you link to this site.

Host an Open House

Just like your realtor, you can also host an open house. It helps to time it to coincide with one or two other open houses on your street so you can draw people interested in the neighborhood. It helps to have some colorful flags and big, professional-looking signs, and don't forget flyers with pictures, a description and the price.

Get on the List

If these roads aren't getting buyers to the front door, you can take a semi-traditional route, but it will cost you. Many FSBO Web sites will allow you to list your property on the multiple listing service (MLS), which will get your property noticed by agents looking to sell their clients a house. However, the catch is that you'll owe them 3% of the sales price after closing. That's still better than 6%, however.

Maybe Not 100% Yourself

You can get help with the scariest part -- the paperwork -- early in the process by engaging the assistance of a real estate attorney or title company. "Depending on where you are in the country, an attorney or title company will be your best friend, making sure all the disclosures and the other forms are signed correctly," said Mangan.

Overall, is it worth the time and energy to sell your home yourself? "Only you can judge that factor. But take into account how much you'll be paying in commissions. It's worth at least a good try," said Mangan.

5 Reasons You Don't Need an Agent  

For homeowners, there are thousands of reasons to bypass real estate agents and sell your property yourself. "If you cut out all agents...you would essentially cut out on average about 6 percent of commission," says Greg Healy, vice president of operations at ForSaleByOwner.com, a Web-based company that markets homes for independent sellers. "On a $300,000 home, that's about $18,000 of savings." But despite this huge potential savings, many home sellers—especially in today's tough housing market—feel that a real estate agent's expertise is essential.

Healy begs to differ and offers five reasons home sellers don't need agents:

1. Just point and click: With the rise of online real estate search tools, homeowners are no longer beholden to real estate agents for the resources and information they need to sell property. "The Internet has essentially changed the face of real estate," Healy says. "It's essentially leveled the playing field across the market."

2. You can market yourself: With the emergence of online platforms designed specifically to market the homes of sellers not affiliated with agents—such as ForSaleByOwner.com—homeowners no longer need agents to get their property in front of prospective buyers, Healy says. Plus, "agents leverage the multiple listing service as their primary 'marketing tool,' " Healy says. But "anybody can access that if they want to pay for it." (Homeowners can put their homes on the MLS for a couple of hundred dollars, according to ForSaleByOwner.com.)

3. Agents aren't appraisers: Appraisers—not agents—are the key to getting an accurate home valuation, Healy says. "An agent is going to give you their perspective based on what they are seeing, [but] they have no true professional training in that aspect," Healy says. Home sellers working without an agent can obtain the services of an appraiser on their own for roughly $200 to $300, he says. "Even if you used an agent, you would still bring in an appraiser," Healy says.

4. Agents aren't lawyers: At the same time, real estate lawyers—not agents—are responsible for ensuring that documents and other legal matters pertaining to the sale are in good order. "There is a myth out there that the agent helps you with this paperwork," Healy says. "They may offer direction, but they are not legally capable to provide that expertise." As is the case with appraisers, independent home sellers can find a real estate attorney on their own to handle the legal aspects of the process, he says.

5. You can do what an agent can: The main service that real estate agents provide is convenience, Healy says. All of the services they offer—finding a real estate attorney, coordinating home viewings, and so on—can be done by any homeowner willing to put in the effort. "Remember that a real estate agent license takes under two weeks to get," Healy says. "So after those two weeks, that person can be in charge of the selling or buying of a person's home, which is one of the largest financial assets in a person's life."

Selling a House Without an Agent  

Although most homeowners continue to sell property the same way their parents did—by listing it with a real estate agent—a sizable chunk of Americans are choosing instead to go it alone. The appeal is obvious: By cutting out the middleman, home sellers can save thousands of dollars that would otherwise end up as commission in an agent's pocket.

But can an inexperienced home seller really engineer a transaction in today's turbulent real estate market without the guidance of a professional? Yes indeed, says Greg Healy, vice president of operations at ForSaleByOwner.com, a Web-based company that markets homes for independent sellers. In an interview with U.S. News, Healy underscored the benefits of solo home selling and insisted that it's not as difficult as you might think. Excerpts:

How much money can a homeowner save by not using an agent?
If you cut out all agents—meaning post your own online ad, put out a yard sign, and sold your home on your own—you would essentially cut out on average about 6 percent of commission. On a $300,000 home, that's about $18,000 of savings. There are some markets—and I believe Maine is one of them—where commissions run even higher, I believe 7.5 to 8 percent.

Why wouldn't a home seller need to use an agent?
The No. 1 reason that you don't need an agent to sell your house is the rise of the Internet. The Internet has essentially changed the face of real estate. It's essentially leveled the playing field across the market. The Internet allows sellers to easily market their homes to millions of people within minutes. Pricing information—recently sold homes, the competitive landscape of the homes that are being sold—is accessible within seconds on a search engine. Ten years ago, agents controlled all the information, and that's why you had to go to them. Today, it's a completely different ballgame.

What about someone who has never sold a home before?
Again, with the Internet allowing access to information, companies like ours provide information and show sellers step-by-step instructions on how to sell your home. That information is easily readable. We provide it—and other services provide it—to bring that confidence to that person who has not done it.

But what about pricing a home? Wouldn't a homeowner need a professional to help with that?
Yes and no. First, again, the accessibility of information of automated valuation tools, which we provide free of charge to our customers, provides a pricing estimate. So, independent home sellers can compile all the data that an agent would see, if not more. Other services, like Zillow.com, that do online pricing as well are always a great place to start. Second, an agent is going to give you their perspective based on what they are seeing. They have no true professional training in that aspect. So we recommend to anybody, if you need confidence in the price of your home, get an appraiser to come in for $200 to $300 to provide that professional insight. Again, the agent is not involved in that. Even if you used an agent, you would still bring in an appraiser.

How about the legal aspects? Is an average homeowner qualified to take care of that?
We recommend that in every transaction a real estate attorney or a title company—depending on where you are located—represent you and sign off on the final paperwork. There is a myth out there that the agent helps you with this paperwork. They may offer direction, but they are not legally capable to provide that expertise. A lawyer or a professional from a title company—depending on where you are—is a must in any transaction. They are the ones that really help get any seller through the process.

What about marketing? Clearly, an agent would help bring more exposure to a home.
Again, that comes back to the two points that we have raised already. The Internet allows you to get in front of people without an agent. Our site has nearly 2 million visitors on a monthly basis looking for homes, so that makes it easy to bypass an agent. In 1997, just 2 percent of buyers used the Internet to search for a home. Right now, it's more than 84 percent. Secondly, when it comes to marketing, agents have fliers. We offer fliers. Consumers can make their own fliers. Signs? We offer signs, or someone can buy one in the store. Agents leverage the multiple listing service (MLS) as their primary "marketing tool," and anybody can access that if they want to pay for it.

It sounds to me that you're saying a real estate agent's job is not all that difficult.
That's true, and remember that a real estate agent license takes under two weeks to get. So after those two weeks, that person can be in charge of the selling or buying of a person's home, which is one of the largest financial assets in a person's life.

Are there times when the interests of the agent and the seller are skewed?
Agents are willing to drop the price of the seller's home more and faster than perhaps a seller may want. That's where representing their interests may break apart. And second, they don't want to wait. They want to get the commission. Timing and interest: That's where you might have conflicts. The only other point I would put out there is that the person who owns the home is going to know the home the best. We hear it from customers all the time, "I stopped using an agent because they called me 30 times to ask me questions about my house." You know, "When was the last time you cut the grass?" The sellers are obviously going to be able to answer those questions and save time and hopefully sell your home quicker.

So what value do real estate agents bring to this process?
There was an independent study done last summer by two professors from Northwestern University. They compared the prices of homes sold "for sale by owner" versus homes sold by agents. And their two conclusions were, one, FSBO sellers can get the same price, if not slightly more, when they sell their homes. Their second conclusion is that you are essentially paying these agents for the convenience of having someone do the work for you. So for that 6 percent commission, they'll do the work—bring the real estate attorney, do the showings, field calls for you, be at your house if someone wants to see it.

But these are all services that homeowners could do for themselves?
Absolutely.

 

 

Is For Sale by Owner Right for You?  

As the mortgage crisis drags down prices across the country, homeowners can squeeze additional tens of thousands of dollars from the sale of their property by becoming their own agents. "If you cut out all agents—meaning post your own online ad, put out a yard sign, and sold your home on your own—you would essentially cut out on average about 6 percent of commission," says Greg Healy, vice president of operations at ForSaleByOwner.com, a Web-based company that markets the homes of independent sellers. "On a $300,000 home, that's about $18,000 of savings."

Although the data vary, sellers who aren't affiliated with an agent clearly represent a significant chunk of the overall market today. The National Association of Realtors says that independent sellers accounted for 12 percent of all homes sold in 2007, down from 18 percent in 1997. ForSaleByOwner.com, however, argues that NAR's figures—which don't include all independent sellers using the multiple listing service—understate the prevalence of independent sellers. For his part, Steve Murray, the editor of residential real estate research publisher Real Trends, says his company found in 2006 that sellers not affiliated with an agent made up roughly 20 percent of the market.

But while the potential savings are large, so is the task of selling one's home in today's downtrodden market. "It's much more complicated than just putting an ad in the paper and showing your house and having someone buy it," says Judy Moore of Re/Max Landmark Realtors in Lexington, Mass. "The value that a Realtor brings to the transaction is that they are able to provide services on so many different levels—things that sellers can't even anticipate in many cases—because they have that kind of professional experience."

To be sure, there is nothing a real estate agent does—setting the asking price, marketing the home, arranging open houses, enlisting a real estate attorney to handle legal documents, negotiating with buyers, and so on—that self-starting home sellers couldn't do for themselves. But since the process is filled with time-consuming and tedious hassles, independent home sellers have to earn every penny they save by cutting out agents.

So is independent home selling right for you? Perhaps it's best to look at the question this way: Do you have the time and energy to take on a part-time job that pays roughly 6 percent of the selling price of your home? If the answer is yes, consider going solo. If not, hire a pro.

via U.S. News & World Report 

Top Five Ways to Sell Your Home Fast  

Need to sell your home fast? With a glut of unsold homes on the market and foreclosures on the rise, you may be feeling discouraged. But there's no reason your property needs to sit unsold for months.

Here are five ways to expedite the process and sell your home quickly.

1. Price it right
With homes sales slowing and prices plunging, there's little doubt that selling for a good price in today's market is going to be tricky. The median existing home price dropped more than 7% last month compared with the same month last year, according to the National Association of Realtors. So if you try to ask as much for your property as your neighbor got six months or a year ago, you're going to turn off potential buyers. Instead, price your home conservatively by looking at similar houses currently on the market, says Michael Corbett, author of "Ready, Set, Sold!" Also look at the homes that aren't selling. Chances are those owners priced their dwellings too high, he says.

"If you really want to stimulate a sale, you should under price your property by just a hair," says Susan Singer, a New York-based real estate broker with Corcoran. Just shaving a few thousand dollars off can generate more foot traffic and create a buzz.

2. Make it inviting
There's no faster way to turn off a potential buyer than to show them a home stuffed with kids' toys, family knickknacks and a stinky kitty litter. Even stodgy furniture can make a property more difficult to unload. That's why many high-end real estate agents employ professional "home stagers" when they want to guarantee a quick sale. For anywhere from a few hundred dollars to several thousand dollars, these folks will do everything from remove clutter and rearrange furniture to rent all new furnishings. Corcoran's Singer says her staged properties tend to sell faster and for more money than ones that aren't prepped in this fashion.

Fortunately, there are some inexpensive things homeowners can do on their own to attract a buyer. Whether you live in a cozy Cape Cod or a 4,000-square-foot McMansion, make your space feel as open and clean as possible. Get rid of clutter, organize the closets and remove all personal items that may make it more difficult for someone to imagine living in your house, says Corbett. See our story for more ways to make your home inviting or watch our video for advice on how to do it on your own.

3. Get an inspector
A home that's in good working order will always sell faster than one that needs pricey repairs, says Walter Molony, a spokesman for the National Association of Realtors. That's why it's a good idea to get your home inspected before you put it on the market. The benefits are twofold. First, it's always cheaper and faster to make your own repairs rather than have a buyer drag out the negotiating process to accommodate any necessary work. Second, you'll also avoid any nasty last-minute surprises that could derail a deal should the buyer's inspector discover you need, say, to replace the roof.

4. Fill your listing with photos
No matter how you sell your home — on your own or with a broker — make sure you have an eye-catching online listing. Some 84% of people start their real estate searches online, according to the National Association of Realtors. While it used to be enough to simply slap up one or two blurry photos, buyers now prefer a slew of pictures so that they don't waste their time touring a home that doesn't meet their requirements.

What should your listing include? If you really want to stand out from the competition consider including a video tour in your listing, says Eric Mangan, director of consumer relations for Forsalebyowner.com. It's also worthwhile to hire a professional photographer or find a broker who uses one. At the very least, take half a dozen or more photos that highlight your home's best features. Make sure to include a shot of the outside on a sunny day, and one of the kitchen, a bathroom, dining room, and a bedroom. "It's incredibly important to include multiple photos in an online property ad since homes without several pictures are likely to get passed over by buyers," says Mangan.

5. Throw in a little something extra
With home sales stalled, motivated sellers are offering incentives to buyers such as paying for the closing costs or points on a mortgage, says the National Association of Realtors' Molony. Such tactics are especially attractive to first-time shoppers who can afford mortgage payments but struggle to come up with both the closing costs and the larger down payments lenders now require.

Some other ideas: Consider replacing drafty windows with ones that are energy-efficient. If you installed a 40-inch plasma TV with a surround-sound stereo system in the living room, offer to include it with the house. Chances are you won't be able to take it with you anyway. If you're selling a second home on the water, throw in the jet-ski and dock rights. If you pad the asking price by just a couple of thousand dollars, you'll still come out ahead, says Corbett.

via SmartMoney.com

A New Reality for Real Estate Agents  

Web-based services such as Zillow and HomeGain have set real estate information free, realtors' commissions are dropping.

When Cindy Brockwell, 58, and Bill Dailey, 62, sold their townhouse in Reston, Va. in early April, the only real estate agent involved was the one who brought them their buyers.

Instead of a listing broker, they used Internet services including ForSaleByOwner.com to price their house and do all the other things a broker would normally do.

"We decided that the value of the listing agent was minimal," says Brockwell, who found a buyer in just five weeks. The total commission came to 3%.

Up until now: You couldn't really operate in the residential real estate market without access to the National Association of Realtors' multiple-listing service. The monopoly meant that only realtors really knew what homes in your area were selling for. They'd be happy to share the data - in return for the standard 6% commission.

The next evolution: Real estate information wants to be free. An estimate for just about any home's value at any time will soon be available online at Zillow.com, HomeGain.com, RealEstateABC.com and other websites.

Zillow and its ilk are not perfect. Zillow's valuation program, for example, tends to work best for mid-price homes in areas where there are a lot of transactions, less so in neighborhoods where people seldom move. But the time may come when Zillow is seen as more reliable than human brokers. Like owners, brokers get anchored to higher prices as home values fall, and they have an incentive to inflate estimates to win prospective clients. Zillow has no such biases. If your house is worth $50,000 less than you paid a year ago, Zillow will tell you. It can't be fired.

John Vogel, who teaches economics and real estate at Dartmouth, says the democratization of data spells the end of the 6% commission. "You go to an agent for information," says Vogel. "Free access to it should be a major threat to the brokerage business."

Real estate brokers will still have a role as marketers, especially in tough times like these. But like stock brokers before them, they'll find that as they lose their traditional monopoly on information, they just can't command their traditional price.

via CNN Money

Six Secrets of Internet Home Buying  

With the worst housing slump in a generation slashing home prices across the country, the dynamics of the market have shifted squarely in favor of buyers. And as the real estate industry grows increasingly Web-savvy, house hunters can now scour through neighborhoods, inspect front porches, and even peek inside bedrooms from the comfort of their desktops. But while this surge of new information can help you find that perfect home, it can also—at times—make the whole process overwhelming. Here are six ways to ensure that your online real estate search is as efficient and effective as possible.

1. Know when to say when. There are plenty of ways to waste time on the Internet. When it comes to home buying, searching through properties you admire—but can't afford—tops the list. So before you grab for that mouse, contact a lender and get preapproved for a mortgage. That way you'll know exactly what you can afford. "It's not difficult," says Elizabeth Deal, senior vice president of ICBA Mortgage, a subsidiary of the trade group Independent Community Bankers of America. After contacting a lender, prospective home buyers will typically be asked to provide information about their income and debts, Deal says. (In some cases, lenders will want to see a credit report as well.) From that information, the lender will be able to issue a letter outlining the price range that the buyer can afford. The whole process can take as little as a half-hour, Deal says.

2. Find the right tools... Real estate search engines are getting better and better. Pat Kitano, a cofounder of Domus Consulting Group, which works with real estate brokerage firms on technology marketing strategies, calls Trulia.com "the most complete national site." Kitano also recommends DotHomes. Jay Thompson, of Thompson's Realty in Arizona, suggests using Zillow.com or Realtor.com, the official site of the National Association of Realtors. Realtor.com "has probably the most listings of any national site," Thompson says. "Just about anything that is on a local [multiple listing service] will be on realtor.com." But rather than limit your search to national search engines, Thompson says, it's a good idea to visit the Web sites of real estate agents and brokers in the market that you are considering as well.

3. ...and put them in a belt. Instead of trying to pinpoint the one "best" search engine, home buyers should put together a list of resources and use them in tandem. After all, no single search engine can provide a complete picture of the entire housing market. But by using several as a group, prospective home buyers can get a much better look at the inventory. "A consumer has to go to multiple sites to figure out the whole landscape," Kitano says

4. Don't forget the indies. The majority of Internet search tools enable users to look through homes that are being sold through agents. But if you use those exclusively, you will miss the sizable chunk of homes being sold independently. "Agents list about 77 to 78 percent of the homes on the market, so there is another 22 to 23 percent of homes that 10 to 15 years ago people wouldn't be able to find," says Greg Healy, vice president of operations at ForSaleByOwner.com, which markets the homes of sellers who are looking to cut out the agent and save on commission. "Using sites that are not agent-related is really critical."

Joshua Dorkin, the founder and CEO of BiggerPockets.com, a real estate networking and information site, says that Craigslist is a great way to find non-agent-affiliated listings that might not show up on mainstream real estate search engines. "It's the classified powerhouse of the world now," Dorkin says.

5. Be alert. Some online real estate resources now offer e-mail alerts or RSS feeds that provide instant notification of new listings and other information of interest to prospective home buyers. Sign up! This is a great way to stay on top of the changing real estate market as your home search progresses. "Rather than actually pulling the information from a particular source, you want that information pushed to you," says Douglas de Jager, cofounder of DotHomes. "It saves you time."

6. Find a good blog. Few resources allow home buyers to take the pulse of the national and local markets like real estate blogs. "Real estate bloggers know in real time what is going on in the market," Kitano says. Like anything else on the Internet, some blogs are better than others. Shop around. Use your favorite search engine to find a couple of blogs that cover real estate in the markets you are interested in, bookmark them and click through them every day. (Pay special attention to the blogs with the most comments and postings.) By and large, the real estate blogging community understands the dynamics of today's housing market in the way few others do. They've emerged as an important voice on housing issues and a wonderful resource for prospective home buyers.

via U.S. News & World Report 

5 Things to know before you sell your house yourself  

Generic for sale sign infront of a suburban home.Selling a home without an agent isn't for everyone - it takes more than just planting for-sale signs in the neighborhood.

"Most sellers throw in the towel after 30 to 45 days," says Michael Kloian, author of "Sell It by Owner and Save" (H-2 Press, $17.95). "They just don't know what they don't know."

In the past four years, about 28 percent of buyers and sellers have gone into the real estate market with limited or no help from agents, says Steve Murray, editor of REAL Trends, a publication that does research for the residential brokerage industry. About half the owners selling their own homes succeeded, with the rest going to full-service agents or businesses that offered limited help but charged flat-fee and discount rates, he says.

In fact, according to the National Association of Realtors, 5 percent of all home sellers try to sell their homes on their own and end up turning to a real estate agent.

"They need to understand ... they are doing the listing agent's job," says Westchester-based broker Michele Barnette, who bought Century 21's New York c21clickit.com franchise, which offers a flat-fee service that allows people selling on their own to be placed in the Multiple Listing Service. "They are making the ap-pointments, they are doing the follow-up, they negotiate themselves."

Sellers, agents and Web site operators say understanding some key points might make the difference between waiting for the doorbell to ring and needing an organizer to keep track of potential buyers:

Be prepared to work hard

Madeleine Gagatch doesn't leave home without it - a stack of for-sale fliers that plug her Kings Park home of 35 years.

The North Carolina-bound waitress has her eye out for any public bulletin board in a five-mile vicinity of her home, whether it's a supermarket or a medical center. "I'm making this a little job for myself," says Ga-gatch, 60, who's asking $489,000 for her five-bedroom high ranch.

Nowadays, with heaps of homes stacked up in a sluggish market, sellers must devise marketing plans the way businesses do - especially if they don't have

Multiple Listing Service's outreach. Some sacrifice Fri-day nights to plant scores of for-sale signs. Others go to stores they patronize regularly and ask about leaving brochures.

David Levine's 32tiffanyway.com looks basic, but it does the job of showing off his three-bedroom town house in Nesconset, including 17 photos and details such as a three-car-length driveway.

Since September, when he put the house on the market, the site has logged about 800 hits, and after lookers weed themselves out, Levine averages about five to seven showings a week at his home, which will go for the best offer above $550,000.

"I just wanted to get information out there and minimize my wasted time," says Levine, 36, an insurance broker who built his first-ever site with Microsoft's Front Page software.

The savvy get into the trenches of selling, like Plainview contractor Richard Agrillo, 57, who has given out scores of fliers in public places such as The Home Depot.

"In heavy traffic areas, they go fast," says Agrillo, who rebuilt a three-bedroom Colonial in Farmingdale and wants $585,999.

Realize it's not going to be cheap

Levine hasn't seen a penny from his house yet, but he's already spent at least $2,100.

He paid $300 to get on MLS, $1,500 for news-paper ads and $300 for 100 corrugated, plastic for-sale signs - a better deal than 50 signs, especially if any get stolen or confiscated.

That up-front spending was a little unexpected, but Levine saw the advantages, especially when he got more calls than did neighbors trying to sell their town homes.

"If you're not spending at least $1,000, you're not serious enough to get it sold," he says. "Be prepared to understand that going in and not expect that you're going to prepare little fliers and get it sold."
All this spending may sound counter to the point of by-owner sales, but not paying to get the word out could lead to losses in time and money when the house stays on the market.

It may also help to hire a real estate attorney before putting the house on the market. Some attorneys will help explain real estate jargon and prepare the seller for what's needed.

Ira Kaplan of Old Bethpage says real estate attorneys like himself can be sounding boards for potential buyers' demands, from putting carpet over wood floors to setting up an escrow account.

"They have to be aware that people are going to nitpick and look for problems," Kaplan says.

Price is right

Knowing buyers had the pick of houses in Sayille, Steve Anglim says last spring he ignored agents' sug-gested $515,000 price for his three-bedroom ranch and instead decided to ask $465,000. But when he dropped that to $419,000 in August, Sunday open-house attendance doubled to about five couples.

"Then I was getting questions and interested looks," says Anglim, 70, a retired Long Island Rail Road manager who is moving to Florida.

When cable TV marketing consultant Brad Mintz was selling his duplex in Holtsville, he subtracted the expected 5 percent agent's commission from the market value of his home. "If I tried to get top dollar for my house, I could still be sitting there waiting for somebody to meet my price," says Mintz, 32, who sold for $330,000 and moved last month to North Carolina.

Pricing needs to reflect many variables, including school district, and negatives such as an old roof, sell-ers and agents say.

"It's the hardest part," says Colby Sambrotto, chief operations officer of forsalebyowner.com, which is owned by Tribune Interactive, a subsidiary of Newsday's parent company, Tribune Co.

Experts suggest going to competitors' open houses, looking at ads and talking to agents. Sambrotto says several real estate sites, including zillow.com, give free or inexpensive but very general appraisals, which take into account facts like recent sales in the neighborhood and the number of bedrooms.

Real estate author Michael Kloian says a certified appraisal, which generally costs a few hundred dollars, can help smooth price negotiations. Unlike most free and online valuations, a certified appraiser will inspect for damage and "functional obsolescence," such as tiny closets.

Have a plan for the agents

Last summer, when Mintz put his home on the market and wrote "no agents" on his Craig's List blurb, one called to say he had a potential buyer for the Holtsville town house. "I have to see it first," Mintz recalls the agent saying.

But when Mintz insisted the buyer come along, neither the agent nor the buyer visited. Mintz says he got the sense that the agent just wanted to get in the door to pitch him to sign up for his services.

Do-it-yourselfers should expect agents to contact them - sometimes many agents - ready with sales pitches on why they can do the job better. There are stories of agents who won't identify themselves right away or pose as buyers just to see a house.

Michael T. Malkasian, president of Atlanta-based FSBO.com, one of the three biggest Web operators to assist homeowners selling on their own, knows of businesses that go to sites such as his, copy listings and sell "hot sheets" of homes to real estate offices.

"There's really no way I can protect people from that," Malkasian says. "It's pretty much public knowledge once you're on the Web site."
But when agents call, it can be opportunity knocking. Handy for advice, they can also give free market values of the home and "comps," or prices of comparable houses recently sold and listed in the neighborhood.

The hope is for payback when the homeowner can't take selling anymore, says Dawn Noak, who drops off pitch letters to self-sellers as an agent with Berry Hills Associate in Commack: "By you doing them that favor ... they might be inclined to call you."

Asking agents for advice is a good way to find out who you like. After all, you may tire of selling on your own.

You might pay anyway

Carlis Thompson, a retired prison warden from Medford, paid $899 to an online business to put his Baldwin property on several Web sites and publications, but he was a little surprised when it came to getting on the Multiple Listing Service of Long Island as part of the package.

He was told a real estate agent would call him - only agents can put listings on MLS. Plus, he'd have to sign an agreement on the commission that he'd pay the buyer's agent, if there was one. "You determine the percentage," he says he was told.

Most Web sites suggest 2 percent, and while specifying something like 0.5 percent is tempting, Thomp-son and others say low commissions won't be worth agents' time.

"If you do that . . . they're not going to push your house," Thompson says.

There are dozens of for-owner sites with free advice, including ones set up by real estate companies ea-ger to get a piece of this growing trend. These online businesses sell a variety of services in different pack-ages - including yard signs, generic contracts, MLS listings and virtual tours - sometimes for very different prices.

Malkasian suggests avoiding services that have time limits on how long the listings stay up. After all, it doesn't take much for the site to keep a listing online until the house sells.

via Newsday
Syndicated with permission.

Bypassing the Agent  

It's a quiet Sunday afternoon on the Upper East Side and newlyweds Jon and Milissa Aronson are perched expectantly on their sofa. A plate of cookies and a sign-in sheet sit strategically on a kitchen counter.

The couple (he's 35 and a broadcasting exec, she's 33 and a social worker) have sent their dog to the neighbors, and vacuumed, dusted and tidied their 550-square-foot, one-bedroom apartment, all in hopes of selling their home without a broker. They're asking $459,000.

"We decided to sell on our own basically because of money," said Jon Aronson. "If you factor in a broker's fee of 6%, plus the 1% flip tax we'll have to pay the co-op board, plus 1.4% we'll have to pay the city and state for the tax on the sale, that's 8.4% of the sale price that we wouldn't get."

In a tough real estate market, the Aronsons are hardly alone among New Yorkers in their quest to sell minus a broker fee. In the first half of 2007, metro-area homes comprised nearly 13% of the listings on ForSaleByOwner.com, which charges $89.95 and up.

Eric Mangan, an exec at the Web site, said use of the Internet to search for real estate has helped owners everywhere connect directly with buyers, but said New York "is one of our strongest markets."

"Homebuyers tend to be very savvy with using the Internet and sellers understand that they can sell a house on their own," Mangan said. "Plus, they look at the bottom line. ... They take into account the cost of that 6% commission."

Walter Molony, a spokesman for the National Association of Realtors, acknowledged that commissions often drive sellers to go without brokers, although "consumers also need to keep in mind that commission rates are sometimes negotiable."

"But the other side of the coin," he said, "is that [buyers] are dealing directly with the owner, so sometimes they think they can get a discount on the price." He also said statistics "show that the selling price is lower when homes are sold directly by owners" - although the best-selling book "Freakonomics" argued that just the opposite was often true, since it pays for brokers to close a deal quickly and move on, rather than try to win a higher price, of which they'd keep proportionately little.

One way do-it-yourselfers often hurt themselves is on pricing. "It is all about proper pricing," one Corcoran broker said. Ask too much, and many would-be buyers won't bid.

Costly commissions aren't the only reasons some owners prefer to take command of the sale. Elle Lopes, 39, has sold three of her homes on her own.

"It's more convenient and I don't have to leave my home for the broker to show it," said Lopes, a Wall Street research analyst who's now negotiating on the sale of her co-op on Fifth Ave. at E. 108th St. "I am more familiar with the neighbors and the board. I know more than a broker would know about this building and the process."

Although they haven't sold their place in seven weeks, Jon Aronson is glad he and his wife are trying on their own. He acknowledged it requires considerable effort. He said there are potential advantages for buyers, as well; since do-it-yourselfers don't pay a commission, they might be more flexible on price.

That factor is just one reason Joseph Chang, 35, a magazine editor, prefers to buy directly from an owner. "Also, you may be able to preempt competition, as a seller may be not be willing to continue conducting open houses or showings if they're confident they have a deal," said Chang, who bought a Manhattan studio directly from an owner in 2006.

But the benefits of cutting out the broker can give way to impatience, he warned.

"You have to be willing to do the research on the local market [and] financing," Chang said. "Few have the patience for this, however, and would be better off using a broker."

via New York Daily News

Checking with Buyers  

Cindy Lawson won't venture from her sofa for anything less than a two-bedroom condominium with a parking space and washer and dryer.

In the meantime, she continues her year-long search by scanning the list of Arlington homes in her price range that is sent to her automatically from her agent's Web site. When she sees something interesting, her agent, Brian Block, sends her the full listing. Rarely do they speak on the phone.

"It's nice to be able to stay here and do that," said Lawson, 56, a legal secretary. "Especially something like buying a house that can be really tedious."

Online real estate search engines have become an established part of the home-buying process over the past decade, but such sites are evolving to offer a wider variety of services, in some cases changing the relationships among buyers, sellers and real estate agents.

For example, Trulia allows users to check out a home's surroundings through a street-level view of its 2.5 million real estate listings and discover unadvertised neighbors -- a park or a cemetery, for example. On BestHomeSearchEver.com, buyers can limit their searches to homes that have been on the market for more than three months and may be vulnerable to price reduction; then they can watch a YouTube video about how to submit a lowball offer.

This part of the online real estate market is still in its early stages but is likely to evolve as a younger generation of buyers and sellers look for ways to trade more information about property, said Saul Klein, a consultant to the National Association of Realtors when it developed its Web site, Realtor.com, in the mid-1990s. "In time, it may become commonplace," he said.

On another site, FranklyMLS, real estate agents are encouraged to leave comments about homes they have taken their clients to visit. On the listing for one four-bedroom house in Woodbridge, an agent said: "Nice place. Water issue in bathrooms????" On a three-bedroom Alexandria home, another agent wrote: "Where's the fridge? Maybe the cockroaches carried it away."

Even negative information about a home can help the sales process if it assures that the buyer knows all of the potential pitfalls in a property, said Frank Borges Llosa, who runs FranklyMLS. "The more information someone has, the more likely they are to make a purchase," said Llosa, who doesn't vouch for the accuracy of comments on the site. "Learning negatives about the house removes the uncertainty factor, which is more of a hindrance than having the information."

Unlike some of its larger competitors, FranklyMLS is a sparse site that relies on keyword searches. It also lacks some of the ease of larger sites that allow users to narrow their search by a number of bedrooms, for example, but it allows real estate agents who have visited a property to add photos to those provided by the seller's agent.

"I don't trust listing agents' photos. They represent only the best side and make it look amazing. It is not necessarily what they look like when you get there," Llosa said.

Real estate agents have fought to control how the listings of their clients' homes are used on the Internet, including in an ongoing lawsuit brought by the Department of Justice. But the National Association of Realtors said that sellers' and agents' growing acceptance of the Internet may have made the point moot. "The policy that we were fighting was adopted five years ago. Things have changed," said Laurie Janik, the trade group's chief counsel.

The group's Web site, http://www.Realtor.com, is still the most-visited real estate page on the Web, according to the market research firm Hitwise. But even it is changing: Recently the site added a feature allowing users to narrow their searches by a neighborhood's "hip factor," based on several criteria, including how close it is to four-year universities, the age of residents and how long people tend to live there.

But the Realtors' site is facing ever-increasing competition from smaller sites, such as Roost, which says it has come up with a more intuitive and faster search engine. Since launching earlier this year, Roost.com has added information about listings from more than a dozen markets, including the Washington area, but still doesn't cover the entire nation. HomesDatabase, which is run by Metropolitan Regional Information Systems, focuses on real estate listings in the Washington area. Other Web sites, such as Owners.com and ForSaleByOwner.com, target homes being sold directly by their owners.

Jim Duncan, an agent for Century 21 Manley in Charlottesville, said he resents that some real estate search engines make agents buy information about users who have expressed an interest in a home they are selling. "They're not adding any value to the transaction," he said. "As a Realtor, they charge me a fee to get that buyer back when they haven't done anything. I have an issue with that."

But even as agents seek to control how their listings are used, the information available online has changed the way buyers, sellers and their agents interact.

After placing a home on the market, sellers can grow anxious wondering how home shoppers perceive their place. Another new real estate Web site, HomeFeedback.com, offers to send e-mails to agents who have visited the property, soliciting their opinions.

Tony Hain, a real estate agent who has been using that service for about a year, said that after reviewing the comments, one client decided that his basement unit was overpriced. "You can't change the fact that it is in the basement, but you can adjust the price," said Hain, who works out of Long & Foster's Woodley Park office in the District.

Block, Lawson's agent and an associate broker with Re/Max Allegiance in Alexandria, said he attracts up to 80 percent of his clients through his Web site, which includes a searchable database of Washington area real estate listings. Some clients do much of the work of narrowing down potential homes themselves and then call him when they want to tour a particular property or want to submit a bid on a home, Block said. "These days, our job as a Realtor is to help negotiate the deal, instead of just finding the house for them," he said.

Sharon Kimball and her husband, Bob, interviewed several real estate agents referred by friends after moving to Washington from New Mexico six months ago. While researching an Arlington condo they had visited, the Kimballs came across a blog by Jay Seville, an agent in Re/Max Allegiance's Arlington office, predicting that prices in the area would be dragged down by the opening of another condo building this year.

That insight persuaded them to sign up for Seville's e-mail service, JustNewListings.com, which automatically alerts them when two-bedroom, two-bathroom homes in their area come on the market. They say they have spent 10 hours a week on their online searches, looking at listings, mapping their distance to the Metro, and researching builders and management companies.

"I have looked at hundreds of properties and pictures," said Sharon Kimball, 54, a federal prosecutor. "You can do it all in the middle of the night when you can't sleep."

They are now in the final stages of negotiating the purchase of a two-bedroom condo in Alexandria that they found through Seville's service and hope to move in within the next couple of months.

"It saved us weeks, no doubt, of work in terms of being able to look at pictures and get descriptions and map locations, just sitting right there in your own den," Kimball said. "It helps you narrow the search and weed out the places that you're not interested in."

Via Washington Post

ForSaleByOwner.com Leads in Online Real Estate Category  

Reflecting the growth of the Internet for buying and selling real estate, ForSaleByOwner.com announced that it attracts more online visitors than most residential real estate brokerage companies- according to independent data from comScore, Inc. Compared to other “for sale by owner” companies, ForSaleByOwner.com is the overwhelming leader and attracts nearly three times as many visitors as its next closet competitor.

“We attract more visitors because our complete line of products and services are helping people sell and buy homes without paying commission,” said Greg Healy, vice president of Operations for ForSaleByOwner.com. “With rich online listings, home pricing tools, step-by-step real estate guidance and live customer support, we are an effective and affordable alternative to using an expensive real estate brokerage firm.”

According to the National Association of Realtors, more than 84% of buyers use the Internet in their home search in 2007, up from 80% in 2006 and from just 2% in 1997. To help its customers take advantage of this growth, ForSaleByOwner.com also syndicates property listings to GoogleBase.com, Yahoo.com, USAToday.com, AOL.com, among other sites. Customers can also have their homes placed on the MLS and on Realtor.com.

comScore, Inc. is a global Internet information provider that measures consumer behavior on the Internet. Information contained in this press release refers to total unique visitors that comScore, Inc. tracked for February 2008. Websites for real estate companies referenced above include PrudentialProperties.com, KW.com, ERA.com and GMACrealestate.com.

ForSaleByOwner.com was also recently recognized by real estate expert Barbara Corcoran as the best real estate website for buying a house without a broker.

via RIS Media

Selling Your Home Yourself? Go online  

It always happens in a slow real estate market: A flood of home sellers looking to save the 6% or so agent commission try a do-it-yourself sale. And because 84% of home buyers in a National Association of Realtors study went online last year to find a new home, DIYers will want to be on the Internet, too. Ready to do it?

Sign up with websites that let buyers search homes sold directly by owners, like your local paper's online classifieds or ForSaleByOwner.com. For a fee of about $400, many sites allow you to advertise your home on the coveted Multiple Listing Service, the database of homes that Realtors use.

Post plenty of professional-looking photographs of your home's interior and exterior online, says Eric Mangan of ForSaleByOwner.com. This is the most important thing that you can do to market your home and get potential buyers psyched about seeing it before they've even crossed your doorstep.

via USA Today 

Home Seller's Checklist  

From before you list to once you've accepted an offer, here's a step-by-step guide for making your home sale as smooth as possible.

Be realistic. Ask for help. Have patience.

That's the advice from real-estate professionals wading through today's tough seller's market.

If you're selling a house, don't skimp on a pro's services -- which can earn you more than it costs -- and be prepared to live in a showroom during what could be a bit of a wait for a buyer. "Price your home realistically," says Rob Wigton, president of the Nevada Association of Realtors, "be patient and know that things will stabilize."

That said, following is a checklist to use as a guide throughout the sales process, with links to additional resources.

I - Before you list

Consider a real-estate lawyer: Real-estate lawyers can help whether you hire an agent or not. They can refer you to reputable agents, provide required disclosure forms for your state, answer questions throughout the process and ensure you receive payment. Thomas Moens, a real-estate lawyer in Illinois, offers these services for a flat fee of $300.

"While agents are reputable, an attorney's fee isn't based on the purchase price or on whether it closes. And we're ethically obligated to represent only our client," he says. "It's pretty cheap insurance to have someone who's just working for you."

Decide whether to hire an agent: The long-standing justification for paying an agent's typical 6% commission is that the agent more than makes up for it with a higher sale price. Today's difficult selling climate would seem to bolster that argument. For the year ending June 2007, the median price for all agent-assisted sales was $240,000, while the median price for all homes sold by the owners was $180,000, the National Association of Realtors (NAR) reports. Agents have access to great marketing techniques, and also represent and bring over buyers. They also know the legal requirements and have liability insurance, should something go wrong.

But depending on your community and the intricacies of your local real-estate market, going with an agent may not provide a leg up. In a study of the Madison, Wis., market, for sale by owner (FSBO) sellers were able to garner roughly the same price for their homes as real-estate agents, meaning they pocketed more by not paying hefty commissions (read more here). In addition to your local market's trends, the decision to go it alone likely comes down to your own comfort level and your marketing resources, which includes the amount of time you have to give to the process. If you're eager to give it a shot, ForSaleByOwner.com is a decent place to start learning the ins and outs.

Not going FSBO? Select an agent: Selling a house is likely to be one of the largest financial transactions of your life. Find a real-estate agent whose experience and commitment you trust. Ask friends and neighbors for referrals then interview several. Some things to ask include:

  • What's your marketing strategy? This is where your agent really makes the difference. Does she list online, in newspapers, magazines? "That's very, very important," says Andrea DeHaven, a Realtor with Coldwell Banker Anchor Real Estate. "Some agents just list in the MLS."
  • Will you represent me exclusively in the transaction, or the buyer, as well?
  • What are your commissions and fees?
  • What's your impression of my home?
  • Can you provide the names and contact information for previous clients?

Read more in "Find a superstar real-estate agent."

Gather your paperwork: Once you select an agent, he is going to ask you for a lot of information. Gather these documents:

  • Prior year's tax bill, utility bills, water and sewer bills;
  • Declarations, covenants or deed restrictions on the property;
  • Assessments, surveys and plats;
  • Sales and repairs of major appliances and building components;
  • Inspections for pests or environmental hazards;
  • Lists of items to be included in or excluded from the sale.

An agent will also run through the disclosures you need to make on the property, basically any problems that could potentially make the home less valuable.

"Without knowing those, you can pretty much blow the whole sale," says Moens, the real-estate lawyer.

You can also find out which disclosure forms are required from your state's real-estate division. It's important, because even the most upstanding seller can forget a repair or minor blemish from long ago.

"In Nevada, for instance, if you don't disclose something, and it's found that you did have knowledge, you can be subject to triple damages," says Wigton.

Get an appraisal: You can hire an independent certified appraiser or get a few real-estate agents to prepare comparative market analyses. CMAs will detail similar houses that have sold in your area over the past three months and will drive the agent's suggested price per square foot for your home.

Online sites such as Zillow and Cyberhomes.com also can provide automated home valuations, though these can differ from what your agent reports. For now, deep local experience still trumps the computer models, so expect to revise your list price based on your agent's feedback.

"There's not a lot of subjectivity," says Wigton. "The seller needs to be realistic and realize that the agent has all the tools needed to get an accurate picture of what the price needs to be to sell."

Price it right: Buyers today are savvy, says Walter Molony, of the NAR. Eighty-four percent look online before contacting an agent, and two-thirds hire an agent to represent them.

The biggest mistake sellers make is overpricing their homes, he says. Overpricing leads to price reductions and increased time on the market, both of which look bad.

"When your home sits on the market and sits on the market, then your home becomes stale and it looks to buyers like they can negotiate further and the price drops more," Wigton says. "They say if you set the right price at the beginning, chances are you'll get pretty close to it." Read more in "8 tips for pricing your home in a buyer's market."

Consider a home inspection: As a seller, it is not your responsibility to conduct a home inspection. But for about $300, you can uncover potential problems and fix them before listing your home.

Prepare your home: Listen to your agent. They all have stories of how homes sold for $10,000 or $20,000 less because of some minor repairs, dirt or clutter that could have been resolved for a couple thousand.

Take a look at other homes on the market. Then proceed with your own preparation, in this order of importance:

  • Major fixes: If you've become accustomed to the cracks and dents, have a friend or the agent point them out. "If you notice them and the agent notices them, then nine times out of 10 that buyer is going to notice them," DeHaven says. Read "10 must-do repairs before selling" and use this checklist from the NAR as you walk through your home.
  • Start on the outside: Buyers won't step inside at all if your home is unappealing curbside. "A lot of times you'll drive up to the neighborhood, there might be weeds growing, some paint peeling, and they'll say, 'No, let's just skip that one,'" Wigton says.
  • Paint the interior walls and clean the floors: This is the most important inside spruce-up, agents say. "You make one first impression, and when that buyer walks through you want everything to be as clean and new-feeling as you can," DeHaven says. Go with uniform, neutral earth tones.
  • Declutter: One person's cherished objects is another person's junk. All that stuff, every bit of it, is distracting. Trust the eyes of someone who isn’t attached to it, such as your real-estate agent, and be ruthless: Dump it, sell it or store it.
  • Depersonalize: "Buyers don't want to place your family in a home, they want to place their family in a home," DeHaven says. Personal items also distract buyers from imagining the home's bare potential.

Consider hiring a home stager: Barb Schwarz, CEO of StagedHomes.com, says 18% of home sellers are now hiring professional stagers, people who spend a day making your home look appealing to buyers. Their fees average $1,800 in the Midwest, $2,800 on the West Coast and $3,800 on the East Coast, and are based on the size of the home and the amount of clutter. (For more details, see this story on staging and view the accompanying slide show of before and after photos.)

II - While your home is on the market

Keep your home show ready: If you're serious about selling, then your home has to be a sales showroom first and a living area second. Not a neat freak? Follow this simple tip: Keep up on a daily basis."If you've done little things -- made the bed, picked up the laundry before you left for work -- then you can send the agent through," DeHaven says.

Be able to clear out: Have a place to go, as well as somewhere for kids and pets. You don't want to be home when prospective buyers walk through. It can make buyers feel uncomfortable, restrain them from asking questions and even potentially be a turn-off.

Stay in touch with your agent: Ask your agent where and how your home is being listed and for updates on buyer interest. Establish a system early on for when and how your agent will provide updates. Put reminders in your own calendar to check for updates.

III - After the close

Stay focused: "A lot of times, sellers think once you have the contract, oh great, you’re over the hurdle,” says Stephanie Singer, of the NAR. But on average more than 20 steps remain. "It's like climbing Mount Everest: You made it to the top of the mountain but you still have to come down."

The NAR lists these 10 last pre-closing steps for sellers:

1. Select an escrow agent.

2. Assemble any condo or homeowners association financial statements and recent reports for the buyer.

3. Order a preliminary title report.

4. Request a satisfaction letter from your present lender.

5. Coordinate the home appraisal and inspections.

6. Arrange final utility readings and payments.

7. Obtain a home warranty policy if you've agreed to provide this to the buyer.

8. Create a formal plan for handling repairs. When repairs are made, and who pays, is flexible. However, it's important that you and the buyer spell out your agreement before closing so no questions arise later. Put money for any outstanding repairs in an escrow account.

9. Have an attorney prepare the deed. (If you're working with an agent, he will typically work with the attorney on this.)

10. Arrange for payment of transfer taxes. Your agent will make sure that the financial requirements of your county are included in your closing paperwork and discuss possible payment options.

Finally, make sure everyone -- and everything -- important moves with you:

  • Notify the post office, utility and insurance companies, and friends of a forwarding address several weeks in advance.
  • Make copies of important records, such as transcripts, employment and financial documents, that you might need immediately or can't risk losing in the move.
  • Find a mover. You can search and reserve a moving van online at Moving.com.
via MSN Real Estate

How To Be Your Own Realtor  

If you’ve ever planted a "for sale" sign in your front yard, you’ve at least considered the possibility of selling your home without a realtor. Why should someone who offers little more than a multiple listing service, you reason, pocket 5 or 6 percent of your sales price? (On a $400,000 house, that’s $24,000.)

It’s a question that becomes all the more pertinent, given the slumping housing market. With the amount of equity in many homes on the decline, the potential savings make a pretty strong case for the for-sale-by-owner (FSBO) approach.

Indeed, by leaving brokers out of the equation, homeowners could effectively slash their asking price by 3 –

even - 4 percent below comparable listings in their neighborhood, helping them sell their house faster and still come out ahead.

It worked for Eric Maas, owner of a national entertainment franchise who has sold two homes that way in the last five years.

"I didn’t think we’d be able to do it again in this market, especially since our house was outside of town [near Omaha, Neb.] so no one was going to see our ‘for sale’ sign," he said. "When I would talk to agents, they were a little angry and told us bad things would happen and that it all looked fine now, but it would all fall apart at the negotiating table. It never did."

Indeed, by leaving brokers out of the equation, homeowners could effectively slash their asking price by 3 –

even - 4 percent below comparable listings in their neighborhood, helping them sell their house faster and still come out ahead.

It worked for Eric Maas, owner of a national entertainment franchise who has sold two homes that way in the last five years.

"I didn’t think we’d be able to do it again in this market, especially since our house was outside of town [near Omaha, Neb.] so no one was going to see our ‘for sale’ sign," he said. "When I would talk to agents, they were a little angry and told us bad things would happen and that it all looked fine now, but it would all fall apart at the negotiating table. It never did."

Who's Doing It

Despite the financial incentive and growing access to online listing services, the FSBO [pronounced "fizzbo"] market has been trending down from a high of 19 percent of the market in 1997 to roughly 12 percent today, according to the National Association of Realtors.

Some 81 percent of home sellers still use full-service realtors, 9 percent rely on limited service providers including discount brokerages and the remaining sellers, roughly 9 percent, use minimal service (including FSBOs and those who pay only for the use of an MLS).

It’s worth noting, too, that some 40 percent of sales in that "minimal service" market are completed as a closed transaction, meaning the buyer already knew the homeowner as a friend or family member.

According to NAR's Walter Molony, the majority of homeowners still rely on agents because their home is often their largest asset and they want an experienced professional on hand to protect their interests. "They want someone with knowledge and expertise walking them through the disclosures and all the paperwork," he says.

Indeed, some homeowners still require the help of realtors to sell their home, says Kevin Wood, a former real estate agent who now runs ByOwner.com, an online FSBO listing service.

Those who can’t be physically on site to show their home and those who are not comfortable selling or promoting their house are not good candidates for the FSBO approach, he says.

"Selling one’s home isn’t for everyone," says Wood. "But I maintain that many more people who otherwise thought they needed a broker have the capacity, tools and opportunity to sell their own home."

What's Involved

While the real estate recession has some homeowners wary of selling solo, Greg Healy, vice president of operations for ForSaleByOwner.com, says the sell-by-owner strategy actually makes more sense today than during the boom.

"It’s actually a great time to sell by owner, especially in markets like California and Florida where prices are dropping much faster than people expected," he said. "If you bought your home two years ago and it’s down 10 percent or 15 percent, I don’t think people have much choice but to try to sell by owner."

He admits, however, the housing slump makes it all the more important to market your home effectively.

Above all, that means listing your house for a fair price.

It’s easy enough to find out what your home is worth. Sites like realtor.com, zillow.com and homegain.com can help you review comparable real estate listings available in your neighborhood.

You should also ask a realtor or two to stop by for a comparative market analysis. They don’t charge for the service, you can be honest about your intent to sell-by-owner (they’ll be waiting if it doesn’t work out) and they might even give you some good ideas on quick fixes to help you sell faster.

Once you’ve settled on a fair market price, you can either list for that amount or, better yet, considering the growing inventory of available homes, discount that price just enough to position your property as a bargain.

For example, if your home would normally list for $450,000 with a realtor, consider lowering your asking price by 3 percent to $436,500. If you’re really eager to sell, you could reduce by 4 percent, sell for $432,000 and still profit from your effort.

What You May Need

Even a well priced home, however, isn’t going to move if buyers don’t know it exists.

Ads in the local newspaper, which cost as little as $25 per month, can be surprisingly effective, considering a large percentage of buyers across the country upgrade into homes within their existing community.

But you’ll have better luck if you pony up for a listing service, which publishes the specifics of available homes to realtors and potential buyers.

For instance, ForSaleByOwner.com’s fees start at $89 per month for a listing on its own Web site. Packages priced at $299 and up also include a listing on third party Web sites with which the company is affiliated, including the real estate sections of Google, Yahoo! and Gannett's national daIy newspaper USAToday. For $899, you also get a listing on the MLS nearest you.

ByOwner.com, meanwhile, charges an average $399 for its listing service. Both companies provide yard signs, printable flyers and instructional material to help you prepare, price and negotiate the sale of your home.

According to Wood, it is essential to carefully screen potential buyers. "With this credit market, it is more important than ever to get your buyers prequalified or preapproved," he said. "I absolutely recommend the seller take control of the sales process from the beginning and after doing open houses they can require a pre-approved mortgage letter with any written offer that emerges."

It’s equally important to work with a lawyer or title company during the closing, says Healy. "This is a legal contract so it’s critical that when you’re doing a transaction like this that you have legal representation, someone who understands the components and can alleviate risks," he says. "That’s true whether you sell-by-owner or not."

The Downside

Before you set out to save a buck, of course, there are some potential disadvantages to consider.

For starters, there’s the added time commitment of showing your own home. (If you’re at work, you may miss a sale.)

You may also feel uncomfortable opening your home to just anyone –

whereas a realtor is bringing only bona fide potential buyers to your door.

Realtors also, of course, handle all the paperwork, provide legally binding contracts that account for local disclosure ordinances and know which lender to direct your low credit score-buyer to when their financing goes sour.

Finally, because they are exposed to a wider audience of potential buyers, some would argue agents may be able to obtain a higher sales price for your home, which can offset some or all of their commission.

A 2007 survey by NAR found the median price for sellers who used an agent was $240,000, while homes sold directly by the owners fetched closer to $208,000.

(Molony notes, however, the significant price spread in the most recent survey was partly due to the fact that FSBO properties were more likely to be in rural areas, and more likely to be manufactured or mobile homes. That suggests the homes might be worth less to begin with, he said.)

A smaller survey by Northwestern University last year of all homes sold in Madison, Wisc. between 1998 and 2004 found those who joined a for-sale-by-owner Web site got as least as much for their homes as sellers who either used an agent or the MLS.

The study shows that FSBO sellers ended up with a "significantly enhanced net sale price because they didn’t have to pay the brokerage commission that real estate agents charge sellers, generally 6 percent of a house’s sale price," the summary report said.

It did find, however, that homes sold through the MLS were more likely to sell faster – 20 days faster on average. (And that was during the real estate boom.) It also found that over 20 percent of FSBO listings did not sell by owner, and ultimately had to list anew on the MLS.

The increased time to sell can be tough to swallow for homeowners who are carrying two mortgages at once. If your home sits too many extra months on the market, of course, it would have been cheaper to simply hire an agent and cough up the commission.

Despite the potential drawbacks, however, Maas says he and his family wouldn’t have it any other way.

"I would definitely do a FSBO again," he said. "I’d have to be in a very bad position at this point to put my home up with an agent again."

via CNBC

Solo Home Sellers Find FSBO Help Online  

Are you thinking about selling your home on your own?

A recent study by the U.S. Department of Justice found that people who sell their own homes -- an approach known as "for sale by owner," or FSBO (pronounced FIZZ-bo) -- can save as much as $7,500 in real estate commissions on the sale of a median-priced house.

To increase the odds of a sale, many solo sellers turn to companies that help with the FSBO process.

These organizations suggest ways to create professional "for sale" listings and offer other services, all without charging full real estate commissions.

"With a little bit of work, anybody can sell their home on their own and save thousands of dollars," says Eric Mangan, a spokesman for ForSaleByOwner.com.

However, it's important to understand the potential rewards and challenges of a FSBO sale before trying this approach.

Going it alone
Traditionally, most people have sold their homes by hiring real estate agents. These agents help market the house by scheduling showings and hosting open houses.

Real estate agents also have access to a multiple listing service, which is a database of homes offered for sale in a given area.

"You have to be a licensed real estate agent or broker in order to list a house in the MLS, and it is the single best tool most agents have," says Robert Irwin, author of "The For Sale by Owner Kit."

If the house sells, the seller pays a commission of around 6 percent of the home's price. The money usually is split equally between the listing agent and the buyer's agent (if there is one).

By contrast, people who go the FSBO route bear the responsibility for marketing and selling their homes. These sellers set the sale price and show the house. In some cases they also help the buyer through the purchase process.

The reward for such hard work can be a substantial savings by eliminating the commissions typically paid out to real estate agents.

Today, several companies provide help guiding sellers through the FSBO process. These companies are generally found online and offer various services.

For example, many FSBO companies allow you to list your home on their Web sites, and some do not charge for this service.

"It's important to take advantage of that offer," Irwin says. "Selling is a numbers game, and some sites can reach literally millions of people."

To get your house listed, fill out a form with all the important information: square footage, number of bedrooms, number of baths, etc. You can also upload pictures of your house.

"The pictures are important because that's what really helps sell a home," Irwin says. "The potential buyer can start to identify with your house, even though they haven't physically driven through your neighborhood."

Some FSBO company Web sites include other information about the home, including the local school district, neighborhood crime rates and the type of shopping located nearby, Irwin says.

"It's more or less a level playing field with something an agent would offer," Irwin says.

FSBO companies also offer telephone or Web-based guidance to sellers who are marketing their homes on their own. Other FSBO products include yard signs, brochure dispensers and downloadable fliers.

Perhaps most importantly, many FSBO companies offer access to a multiple listing service without requiring the seller to pay a full listing agent's commission. When a home is listed in the MLS, it might also show up on major Web sites, such as Realtor.com, the official site of the National Association of Realtors.

"When your home appears on Realtor.com, it is open for anyone to look at -- potential buyers who are working with agents as well as those who are not," says Irwin. "Your listing could also be picked up by the real estate pages of other sites like Yahoo and AOL."

Special rules may apply before a listing can be uploaded to a major site. For example, you may not be able to include "FSBO" in your advertising. If you are working with a FSBO company to get an MLS listing, make sure you understand the requirements upfront.

FSBO companies are able to place homes in an MLS because they work with licensed real estate brokers who have access to the system. These brokers, along with the company, charge a discounted rate, usually a flat fee. As a result of this lower fee, the brokers don't typically offer full face-to-face service to the seller.

The cost
The prices FSBO companies charge vary widely. Some let you put your listing on their site for free. Others charge monthly rates that are as high as $100 for a similar benefit.

These companies also offer flat-rate prices that generally range from $200 to more than $1,000, depending on the services provided.

If all you want is the MLS listing without the extras, you can probably get it done for a flat fee of around $400. Some companies may offer this basic service for free. As a comparison, a full-service listing agent's commission on the sale of a $200,000 home would be around $6,000.

It's important to note that although sellers can save through a FSBO approach, they may not escape all fees.

For example, if a buyer finds your house on a multiple listing service, there's a chance that the buyer will have a buyer's agent. To make the sale, you'll probably have to pay the commission of the buyer's agent. For a $200,000 home, that fee would be about $6,000.

Add that total to the flat fee you pay to list the housing in the MLS, and you end up with a good-sized chunk of change.

However, the amount is still less than the combined $12,000 in commissions you'd likely pay to traditional real estate listing and buyer's agents.

Seller's responsibilities
The FSBO process involves a lot of extra work for the seller. It's not as easy as simply scribbling "for sale" on a piece of poster board and sticking the sign in your front yard.

"If you don't show much effort, you probably won't attract serious buyers," says Michael T. Malkasian, president of FSBO.com.

First off, sellers planning to use the FSBO process must make sure they aren't under any prohibitive agreements with a real estate agent.

"If you're already with an agent, and you want to switch to selling on your own, check your contract," Mangan says. "Most people are under a time-frame commitment. If you want to break the contract, that's something you have to discuss with your agent."

Otherwise, you could pay to sell your house on your own, and end up owing the agent their full commission.

Secondly, sellers must determine a proper sale price for their home. A lot of FSBO companies offer a comparative market analysis on your home for about $25, Irwin says.

"In today's market, prices are falling in several areas," Irwin says. "You have to stay ahead of the curve, regardless of the method you use to sell your home. That means if prices are falling 5 percent a year in your area, you may need to price your house for 5 percent less than last year's prices in order to sell your home faster."

FSBO sellers also are responsible for showing the home to prospective buyers. Another responsibility for the seller is to lead the buyer through the process, if necessary.

"When a potential buyer wants to come see the house, the seller should have a list of two or three mortgage people to refer the buyer to, if necessary," says Malkasian. "The seller should also have blank contracts for the buyer to fill out, and the names of one or two real estate attorneys (who can handle the closing)."

FSBO sellers also should be sure to have enough cash on hand to cover last-minute costs. Don't forget that whether you choose to use a full-service real estate agent or FSBO company, you'll still have to be responsible for the seller-paid closing costs such as home warranties, homeowner's association dues and taxes.

Measures of success
How much can you benefit from using a FSBO company?

"We conduct exit interviews and we've found that over 50 percent of our people have successfully sold their home before they deactivate (their Web site ad)," says Mangan. "As for everyone else, are they deactivating because they want to rent their house or they just don't want to sell it anymore? That's the information that we don't have."

More formal analysis of these organizations is harder to come by.

"There is no statewide or national independent study that I've seen that details the success of 'for sale by owner' services," Irwin says.

Real estate agency organizations have released studies showing that only 15 percent or fewer properties are sold by the owner, Irwin says. On the other hand, he saw one small, independent study that statistically looked at properties, comparing those listed with agents against those offered "for sale by owner."

"The study found that the 'for sale by owner' homes took longer to sell, but got higher prices," Irwin says.

Experts stress that one key to success is doing your homework before choosing a FSBO company. Because many of the costs associated with the FSBO process are prepaid, be sure to research any company you plan to use before paying them.

Check to see if they have a live customer service representative to answer any of your questions. Read the privacy policy and terms of use on the company's Web site to see how they plan to keep your personal information secure.

Check the site's "frequently asked questions" section to see how problems will be resolved. Also, look at how much instruction they provide online.

Irwin says that the amount of information on the company's site is a good indicator of the quality of the service.

"Fly-by-night businesses typically do not have the wherewithal to post a lot of educational material on their Web pages," he says. "The companies that have been around for many years have instructional articles on their sites. They want to provide information because when they have an educated customer, it ends up being a win-win situation."

via Bankrate.com

 

 

 

18 Best Real Estate Sites  

What makes a good real estate Web site and where should you look for what? I have compiled a list of places to find the best information fast — sites that require the fewest clicks and offer the most detailed, current information. From snooping into your neighbor's backyard to finding a foreclosure property, discover the best Web sites to get what you need:

Most houses to choose from: Realtor.com
This is the official site of the National Association of Realtors, which lists over 3 million properties for sale and rent.

Best local information: Terabitz
This is a right-brain approach to home shopping. Buyers can create “mashups” of data by dropping “bitz” of information they’re interested in, things like restaurants, shops, banks and cafes.

Best site to price comparable properties: Trulia
Currently listed and recently sold properties appear on the page with each “for sale” listing, along with graphs showing how that house compares with similar homes. It also gives you the year built, square footage and sales history.

To find out what your neighbor’s house is worth: Zillow.com
Zillow estimates the market value of more than 67 million homes. All you need is the address.

Find the right neighborhood: Neighborhoodscout.com
Click “Build a Neighborhood” and describe your dream. They’ll instantly give you the neighborhood that’s just right for you.

Buy a house at auction: eBay.com
The “world’s largest marketplace” also has plenty of properties for auction in all 50 states and many foreign countries.

To find a foreclosure property: Propertyshark.com
This is an easy-to-use site with plenty of listings.

Buy a house without a broker: Forsalebyowner.com
It gives you the owner’s name and phone number so you can contact them directly.

Get Zagat-like reviews of a particular street: Streetadvisor.com
Local residents and visitors submit detailed descriptions and ratings of streets and blocks. It includes overall atmosphere, cell phone, TV and Internet reception and whether or not the street is good value for the money.

Snoop into your neighbors’ backyards: Zillow.com
“Bird’s Eye View” gives high-resolution, 3D-like aerial views of anyone’s backyard. You can check out your neighbor’s noisy basketball court or the local neighborhood dump.

Get the dish on noisy neighbors: Rottenneighbor.com
You’ll find where the “smelly hippies,” “psycho pet haters” and the “mean old lady with no life” live. It also gives you information on the great neighbors, too!

Check out the schools: Homefair.com
Get a free school report for any city or town in the country.

Check on local crime rates: Areaconnect.com/crime
Compares crime rates based on FBI crime stats.

Find local sex offenders: Familywatchdog.us
The maps here show you where offenders live and work, and the crimes they’ve committed.

Check out the local job market: bls.gov/eag/
This Web site tells you how many new jobs are being created and how many jobs are being lost city by city. Statistics and charts are easy to read.

To talk with your soon-to-be new neighbor before you buy: Meetup.com
Whether you’re interested in politics, dogs, poker or physics, it will connect you with a group of like-minded souls in the neighborhood.

Most homes for rent: Craigslist.org
Gives you the price and lets you contact the owner directly.

Swap your house with someone else: Homelink.org
This is the largest international house-swapping site.

Now you have everything you need to buy a home without moving a muscle. Happy hunting!

via NBC Today 

 

 

How To Sell Your Home in a Tight Market  

Now that the New Year is underway, a lot of people are wondering what 2008 has in store for the real estate market. Industry experts say it could be a tough year for people who put their home on the market.

With more than 4.2 million homes currently on the market and more to come as spring "selling season" arrives, home prices are falling to entice buyers to get off the sidelines. Buyers, of course, are drawn to houses offering the best deal for the money. With home prices threatening to go lower or, at best, remain unchanged, many home sellers are concerned about selling their home for less than it was worth just a year or two ago. Add to that the fact that real estate agents typically eat up five to six percent of a home's sales price, and that's even less money that will go to the seller.

This probably explains why many sellers are choosing to forgo working with an agent and save on commission, allowing them to price their homes more competitively. There are now more people using ForSaleByOwner.com, the nation's largest Web site for these home sellers, than at any other time in the company's history.

There's big money to be saved. An analysis performed by the company found that real estate agents and brokers collected $55 billion in commissions in 2007, an average of $13,900 per home sold. People like Joseph De Luca of Enfield, Conn., question the wisdom of paying so much when, with a little effort, he could do the job himself and save thousands of dollars.

"An agent is going to market the home by putting a yard sign out front, posting an ad on the Internet and holding a few open houses. Why pay a five or six percent commission when I can do that myself," asks De Luca.

Instead of spending thousands on an agent, he invested $249 to market his three-bedroom home on ForSaleByOwner.com. DeLuca's listing package included a guidebook to selling your own home, and other resources to walk him through the entire real estate process. He also received a ForSaleByOwner.com yard sign that signaled potential buyers to view his home on the Internet, and a home appraisal report that compared his home to others in the area and gave him market information so that he could price his home accurately.

De Luca noticed that similar homes in his neighborhood were listed at more than $340,000 and hadn't moved. Figuring that he was saving on commissions, he sold his house for $335,000 within 45 days. Had he gone with a commissioned agent, it would have had to sell for $355,000 in order for him to pocket the same amount. "I'll never use a real estate agent again," De Luca proudly says.

Another ForSaleByOwner.com customer, Bruce Brandywine of Tampa, Fla., attracted a buyer who saw his online ForSaleByOwner.com property ad and toured it during an open house that he hosted himself. "Who knows my home and can possibly explain its features and attributes better than myself?" he asked rhetorically. To close the deal and give him piece of mind that nothing was overlooked, he hired a real estate attorney to handle all of the necessary paperwork.

Brandywine is not the only one choosing to skip the "middleman." ForSaleByOwner.com estimates that 'for sale by owner' sellers saved almost $9 billion in home value during 2007.

"The real estate market is expected to be tough for at least the first half of 2008, so we expect more people will avoid using a commissioned agent in order to price their home competitively and save more of their home's value." says Eric Mangan, director of consumer relations at ForSaleByOwner.com.

Whether you're planning to sell in the near future, or are looking to buy, log on to www.ForSaleByOwner.com for the help you need today.

via NBC New York 

8 Tips for Pricing Your Home in a Buyer's Market  

It's tough being the seller in a buyer's market. But you can improve your odds with the right research. In many cases, making a smart deal and getting the best price comes down to studying your market and being an informed seller. For more about pricing your home to sell, please visit our comprehensive Pricing Guide. "You've got to know more than you would have if you'd sold a year ago," says William Poorvu, professor emeritus at Harvard Business School and author of  "Creating and Growing Real Estate Wealth." "If you want to protect yourself, you have to become knowledgeable." 1. Recognize that housing markets are local. Home prices are like the weather -- very different in different areas. In addition, demand will change depending on the price range and even the neighborhood. What you need to know: What's the demand for a house like yours in your area? "You have to look at what's being sold and at what price," says Poorvu. "That's important." Look at comparables for similar houses. Study prices and sales for one year ago, six months ago, three months ago and current numbers, says Dick Gaylord, past president of the National Association of Realtors. What are the trends? Are prices going up or down -- and by how much? How many days are homes staying on the market? If they are on the market longer, how much of that could be seasonal? In many areas, spring and summer are the busy seasons. Pay special attention to "the delta between the list price and the sales price," says Ron Phipps, broker with Phipps Realty in Warwick, R.I. That is, look for a meaningful relationship between list price and sales price. Perhaps most homes are selling for 5 percent less than the list price. "An agent who works the market will be in the best position" to find "the tipping point between nice, attractive and interesting -- and being sold," Phipps says. You want to find the point between, "Hey, that's interesting," and "It's too good to pass up." If you're not using a real estate agent, it's especially important to use the Internet, visit open houses in your area and study home sales in your Sunday paper, according to Eddie Tyner, general manager of  ForSaleByOwner.com. Another reliable source: public records of recently sold properties. You will be able to see not only the price history of houses in your neighborhood, but also permits for improvements. This will enable you to estimate how much value was actually added by home improvements – and how much those homeowners recouped when they sold. But you also need to realize that the paperwork alone only tells part of the story. While sales and prices are public, many times seller concessions are not. For example, a seller  might have added in a lawn mower and snow blower, for free. In practical terms, that might have added $500 to the value of the sale, but it is not reflected in the official records. 2. Analyze who is buying and selling in your market. What's your competition? Who are the buyers, and why are they shopping? Do you live in an area like Phoenix, "a growing market with people coming in," says Poorvu. Or are you living in an area that doesn't attract a lot of new residents, where many shoppers are "bottom fishers" who don't have to buy but are "looking to pick up a bargain," he says. Are you competing against a flood of new houses from builders eager to sell, or are you selling a newer home in an area where most of the housing stock is older? Employment trends are a major factor. The stronger the employment base, the more stable the housing values. 3. Ask the professionals. Don't ignore the elephant in the living room. When you interview real estate agents, ask about the market conditions for your area and price rang. pecifically, ask about the "absorption rate" says Phipps. What that means: In the current conditions with the current inventory, how long would it take the market to absorb or sell, all the houses on the market? If the supply is much larger than the demand, ask potential agents how they would "price to offset that inventory," he says. 4. Know what your house is worth. Talk to a handful of agents. Get an appraisal from a certified professional appraiser. Look at your comparables. Taken together, that information will give you a pretty good idea of what your home is currently worth. 5. Consider strategic pricing. Here's how it works: If prices in your area are dropping 1 percent each month, and you want to sell within the next three months, you take 3 percent off your price right off the bat, says Phipps. So if you were going to put your home on the market for $400,000, you set the price at roughly $388,000. The upside: You'll have the competitive edge over the guy who's dropping his price every month, without the air of desperation. Plus, in a market where prices are falling, you'll make more money if you sell quickly. The downside: Predicting the market is a tough call, even for the pros. And it's really difficult to raise the price if your market starts to rebound, Phipps says. 6. Rebate your 'commission.' If you're selling it yourself and need to move quickly, consider subtracting half of what would have been the commission from the sales price, says Tyner. The standard commission is about 6 percent, so if you subtract 3 percent, your $300,000 house would go on the market for $291,000, he says. Listing a home for "$9,000 to $10,000 under that value should create higher interest," especially if it's new to the market, says Tyner. The downside: If the house doesn't sell and you end up hiring an agent, you'll need to cover the commission, which may mean raising your sales price or taking a smaller profit. 7. Evaluate whether you really have to sell now. If you want to get the best possible price for your home and the local market is tanking, "see if you can delay the sale," says Poorvu. Otherwise, in a lot of markets, sellers have "to be willing to accept a pretty good haircut over what they thought their home was worth last year," he says. The downside of waiting: The market could decline or your circumstances could change to the point that you might need to sell quickly. But for situations where the move is optional (or you might be able to rent the property until your local market improves), waiting is a solid option. Just because you've already planted that "for sale" sign doesn't mean you can't change your mind if you're not seeing the interest you anticipated. 8. Assess the market where you plan to buy. If you're selling one house and buying another, look at the market where you plan to move. Says Poorvu, "It might be that, with the housing there, it's a great time to buy." via Bankrate.com/originally published in 2008, this story was updated and edited in August 2010.