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.”