FSBO may save money, but with headaches

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People who decide to sell their homes without a Realtor may be saving themselves some money, but they may be increasing their headaches, say Realtors.

However, some people selling their homes by themselves say that using the Internet and the Multiple Listing Service will not only sell their home, but leave them with more money in their own pockets.

“It’s certainly possible to sell your property by yourself, but there are so many pitfalls,” said Sara Frear, operations manager of Land Title Guarantee Company. “Your home is the most valuable asset you’ll own.

“There’s a substantial amount of money to be saved, but by doing that, you’re also taking on a substantial amount of risk.”

Having done considerable real estate investing, Dan Schmitt recently sold his house at 347 Caprice Court for $346,000 using the service forsalebyowner.com. Marketing on the Internet, he said, “is fantastic. It levels the playing field. You can easily save half the commission.”

I don’t spend very much time trying to convince someone to switch their strategies.”

— Sylvia Jennings, Realtor

 

Schmitt purchased a service through forsalebyowner.com that included listing in the Multiple Listing Service, or MLS. Available to Realtors, the MLS includes a detailed list, including size, photos and other details of the homes for sale. Forsalebyowner.com has five different options ranging from $80.95 per month to a one-time fee of $699:

For a monthly fee of $80.95, the homeowner gets 30 days’ standard listing on Zillow.com, Yahoo and Craigslist.org, in addition to forsalebyowner.com.

For $699, the homeowner gets the above plus a listing until sold, the option to upload a video, unlimited photos, featured listings on Zillow, Yahoo, Realtor.com, and forsalebyowner.com and an MLS listing.

On a $300,000 property with a 6 percent commission to be split between the buyer agent and the listing agent, the total commission would be $18,000, Schmitt said.

“I could save half that commission just by going to a buyer’s broker,” Schmitt said. “I’ve taken half that and chucked it in my pocket. I still paid the 3 percent buyer’s commission.”

“Zillow’s incredible to save the commission,” said Neil Torsenbo, a homeowner who listed his house on Zillow.com. “I’ve had the house for 20 years. Why would I want to give away thousands? I’ve saved thousands of dollars.”

Craigslist.org has hundreds of listings on it, most of which are placed by Realtors.

Kathy Taylor, who’s selling her 2416 W. Dale St., home via forsalebyowner.com said she’s doing that to save money. She chose an option that lists the home on Zillow and Craigslist, and so far she’s had just a few showings “from people who saw the sign,” she said. She said she and her husband aren’t “pushing” the sale yet.

The Taylors bought the house 15 years ago. At that time, she and the home’s then-owner “basically put the deal together,” but still “paid a hefty commission,” Taylor said.

Other stories aren’t as positive. Steve Anderson initially attempted to sell his 1214 Holmes Drive home via forsalebyowner.com. After seven weeks, with “very few showings,” Anderson listed it with a Realtor.

Harry Salzman has been a Realtor for decades in Colorado Springs. He advised against listing for sale by owner. Salzman warned about criminals who look at these listings so they can later steal from the homeowners.

“I would suggest they check with the police, check they are not someone who’s had problems with the police,” Salzman said.

Selling by owner can be rife with problems, he said.

“Maybe they’re not getting the best price, a qualified buyer, a proper sales contract, someone who’s going to give them realistic earnest money, dealing with a proper inspector,” Salzman said. “I could talk about this all day.”

Homeowners don’t necessarily get a better price if they sell by owner; they get a realistic price, he said. Also, he said a FSBO wouldn’t typically answer the question: What do I do now that I have an offer?

“There ain’t no such thing as a free lunch,” Salzman added.

Realtor Sylvia Jennings said people have relied more on Realtors through the recession, and there is typically an increase on FSBO when the market improves. Some people attempt first to sell their own home, and then appeal to Realtors after self-sale didn’t work, she said.

“That’s not uncommon,” Jennings said.

Jennings’ clients “already believe in our experience and our expertise,” she said. “I don’t spend very much time trying to convince someone to switch their strategies.”

Gus Taltavull is helping his girlfriend sell her house. He said he’s hired title companies for $300 to $400 to do a closing.

“If a Realtor brings me a customer, they get 2 to 3 percent,” Taltavull said “It’s all about money.”

The Land Title Guarantee Company has a marketing packet for homeowners who do not want to list their homes with a Realtor. In the packet are 14 documents which answer common questions, said Frear.

The title company takes the transaction from the contract between the buyer and seller and completes it to the closing, she said. That includes clearing the title from mechanics’ liens, child support liens, tax liens, Frear said. The service also ensures clear access and mineral rights.

“It ensures the homeowner or the lender that they have a clear title,” Frear said. “If there’s fraud, we take the risk on that.”

There’s been abuse in the title industry, she added.

“I wouldn’t buy a piece of property without title insurance,” she said.