Agent or No Agent?

Posted by Harvey Araton

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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