The last tenants were just too much. So, after spending $3,000 repairing the damage they left behind, Huntington Beach landlord Kelly Pointer decided to sell her three-bedroom rental.
And – because she doesn't want to pay a commission – she's selling it herself.
If it works out, that could translate into savings of up to $34,000. “We could save an enormous amount of money by selling it ourselves,” said Pointer, 52.
There's nothing new about “for sale by owner” deals like Pointer's, or FSBOs (pronounced fisbos) as they are called in the industry.
But Pointer isn't just putting out a sign like they did in the old days. She posted a listing on Fizber.com, an Orange County-based website that gives do-it-yourself home sellers a forum that looks and acts pretty much like listings on real estate sites such as Redfin and Realtor.com.
Fizber.com is one of a score of sites catering to homesellers without agents. With names like ForSaleByOwner.com, FSBO.com and Owner.com, site operators believe they're harnessing the power of the Internet to reverse a 27-year decline in the number of FSBOs in the U.S.
While industry insiders are skeptical, operators say FSBO websites will function much like TurboTax, guiding ordinary folks through an otherwise complex process.
“Sellers have access to all the same information and resources as real estate agents,” Eddie Tyner, general manager of Chicago-based ForSaleByOwner.com, said in an email. “And the process of selling your home by owner is the same as selling with a real estate agent. It's just a matter of who is doing the work.”
A group of Ladera Ranch investors acquired Fizber in late 2012, spent a year revamping the website and relaunched it in December. By mid-October, the company claimed more than 12,000 listings from across the country.
While many of the FSBO websites charge for listings on their venues, listings on Fizber are free. In addition, the listings automatically get uploaded to other free sites such as Zillow, Trulia, Homes.com and Yahoo Real Estate.
The site also is geared to helping sellers price and market their homes, guiding them through the FSBO process and providing free tools to upload photos, create fliers and brochures and produce home-tour videos.
Sellers have the option of offering commissions to buyers' agents, which still is half the amount they would pay when using their own agents.
Fizber then charges sellers who want additional supplies and assistance: Contracts or other legal forms; yard signs; posting listings on the broker-run multiple listing service (which all agents see); services for paperwork, escrow and title; and, should clients decide they want an agent after all, links to a network of discount brokers who charge smaller commissions.
“Whatever route you take to sell your home, we have things that will help you save,” said Fizber President Zack Zackrison.
If Fizber is to become profitable, it needs to “upsell” customers on these additional products, said CEO Evan Gentry.
“All the data is showing us we're on the right path,” said Gentry, who projects the firm will turn its first profit by June 2015. “And the customers just love it. It just tells me there's so much potential. People are selling homes and saving thousands of dollars.”
But getting more people to sell their own homes may be an uphill battle.
Figures from the National Association of Realtors show that the number of sellers marketing homes without an agent has dropped steadily since 1987, when 20 percent of U.S. homes were sold by owners.
In 2013, the latest NAR survey shows, that number had fallen to 9 percent. And only 6 percent of those sales were transactions between strangers, as opposed to deals between family and acquaintances.
Experts were at a loss to explain the reason for the steady decline, which occurred through good markets and bad, seller’s markets and buyer’s markets.
But experts agreed that possible factors include ballooning home values, increasing deal complexity and the explosion of information available to consumers.
People want the extra assurance and liability protection they get from an agent, said Leslie Appleton-Young, chief economist of the California Association of Realtors. And the abundance of information on the Internet could drive sellers to a professional to help make sense of it all.
“If you go back 40 years, forms that now are 20 pages were one page,” Appleton-Young said. “I think the complexity of the transaction is a big part of it.”
Steve Harney, a retired Long Island broker who now runs the Keeping Current Matters real estate news site, recently published an article listing five key arguments against doing a FSBO.
Among his chief reasons: Most do-it-yourself sellers lack the negotiating skills and online know-how to successfully market a home and navigate the contract and escrow process.
Harney believes also that buyers' agents are reluctant to show FSBOs to their clients because there's no guarantee they'll get paid a commission and because they'd rather deal with professionals than with amateurs. If there isn't a seller's agent, Harney said, the buyer's agent “will have to do twice the work.”
Harney argues further that homes sold by an agent tend to go for more money – offsetting the cost of a commission – because buyers expect to get a discount when dealing with an owner.
“There is a whole process to selling a house,” Harney said. “Realtors have a whole book of forms. Do you know all those forms? Do know what you're allowed to say and what you're not allowed to say? Did you study this for years? You just looked online and said, ‘This doesn't look so hard.’”
Sellers not intimidated
But San Francisco broker George Devine believes FSBOs can work for some who have the time to do the work involved.
“This is like filing your income tax return,” said Devine, author of the book, “For Sale By Owner in California.” “Can you do this by yourself? Sure.”
But there still are plenty of people who hire accountants – or do Turbo Tax and hire an accountant to look over their work. “Most people do something in the middle,” Devine said.
The new websites might increase the number of sellers able to do such deals.
ForSaleByOwner.com's Tyner said his site has 3 million unique visitors per month. “In 2013 alone, ForSaleByOwner.com customers sold approximately 9,000 homes worth a combined $2.3 billion,” he said.
Chris Ling of Huntington Beach used Fizber to sell a family-owned Costa Mesa home in March. He got $625,000 for it and saved about $20,000 in real estate commissions.
But, he said, “I'm not the average person.” He's had lots of experience, selling nine FSBOs over the past 20 years. And he has a real estate license, though he’s not a practicing agent.
Ling, 50, had been advertising the three-bedroom, 2.5-bathroom home on Craigslist when Fizber contacted him. He decided to list it there as well since the listing was free.
“It was a no-brainer. Why would you not do it?” Ling said.
Seller Alan Wilsig recently listed his his three-story, 7,500-square-foot home in lower Manhattan for $43.5 million on Fizber, the website's biggest listing ever. It’s the third home he is selling without an agent.
“No one can explain the house as well as I can,” Wilsig, 49, said in an email. “It would literally need to be an agent's only listing, and I'd need to train them for 30 days. There was just no need to be captive to one listing broker's marketing prowess and network.”
Kelly Pointer had been renting out her three-level townhome in Huntington Beach for 20 years when she soured on being a landlord. Several friends have successfully sold their homes without an agent, so she and her husband decided to give it a try.
After posting the listing on Zillow, Fizber contacted Pointer, promising more exposure.
Since the couple put the home up for sale, they've had multiple showings and held several open houses, but no offers.
“I've had two friends who sold homes as for sale by owner and saved a lot of money,” Pointer said. “Hopefully, if we find a buyer without an agent, then we can save 6 percent.”
FIVE COMMON MISTAKES BY OWNER-SELLERS
• Setting the price too high: Overpricing can lead to missed opportunities at the outset and prolong the time it takes to find a buyer. Even if someone is willing to pay a seller's price, there might be a rude surprise later if the lender's appraisal is too low. Those shopping for owner-only sales also may expect a discount since there's no agent commission.
• Skimping on home prep:Failing to paint the home, make repairs, improve "curb appeal," depersonalize the decor and remove clutter are huge turnoffs for buyers and can hurt the price. Buyers need to visualize themselves in the home, which is hard to do if a home is messy or decorations turn buyers off.
• Inadequate marketing: It takes more than putting out a yard sign and placing an ad in the local newspaper. Marketing includes taking good photos, writing effective sales descriptions, listing on numerous real estate and classified ad sites and, for an additional fee, getting a home listed in the multiple listing service.
• Not being objective:Sellers tend to have an emotional tie to their homes or overvalue improvements they made. They need to be detached and not take offense when buyers criticize their home's shortcomings.
• Mismanaging the sales process: This includes being unwilling to negotiate on price or repairs, not disclosing a home's defects, failing to adequately screen offers and failing to plan your move to a new home in case their deal takes longer or less time than expected. Sellers also need professional advice from attorneys or contractors as well as to be prepared to handle escrow, title insurance and closing costs.
Sources: Steve Harney of Keeping Current Matters, Fizber.com, Bankrate.com, Realtor.com and ActiveRain
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