Should You Just Sell the Place Yourself?
Kim Babel was leery of selling her 130-year-old Vermont farmhouse on her own. Then a friend pointed out how much the commission would run on her $145,000 house. "How afraid are you?" her buddy asked.
So last year, the 38-year-old former day-care operator wound up selling not only her house in Georgia, Vt., but also a $135,000 duplex she owned in nearby Milton. This year, after her mother died, she put her mom's $700,000 Burlington commercial property on the market, too.
Do-it-yourself realty is not easy: It's time-consuming, and you must guide strangers through your home. Plus, you're on your own in moving the deal forward. But it can pay off. Babel says she spent $1,000 on signs and ads and invested 50 hours of her time showing the three properties. In return, she figures she saved $72,000 in commissions.
Plan on some prep time before you take the plunge. Babel read How To Sell Your Own Home: The Homeowner's Guide to Selling Property by Owner, by William F. Supple Jr. (Picket Fence Publishing, $17.95). She ignored the book's advice to get a professional appraisal, choosing instead to do her own research into what similar homes in her area were going for. A real-estate agent friend helped her price her mother's property: Many agents are happy to provide a report on comparable property sales in hopes of winning your business should you decide to list.
Babel had other assistance. The magazine where she advertised, Picket Fence Preview, gave her the necessary purchase and sales contracts and seller disclosure forms for lead paint, property condition, and so forth. (Office-supply stores also carry these forms.) She asked prospective buyers to bring a prequalification letter from a lender. A lawyer reviewed the sales contract and prepared the deeds, which cost $275 for each of her two properties and will likely cost less than $500 for her mother's. In some regions, sellers instead work through an escrow company, which can hold the downpayment money, says Robert Irwin, author of The For Sale By Owner Kit (Dearborn Trade Publishing, $17.95).
If you hope to save money but want some professional help, there is a middle ground: The simplest approach is to advertise the property yourself, but open your door to the agents who invariably call. This spring, Bill and Anuliina Santry offered their Annapolis (Md.) home on their own. In the end, they agreed to pay a 3% commission to an agent who brought the buyer--and handled the details. Even so, Bill Santry figures they saved more than $7,500 when you consider their costs vs. what a full 6% commission would have run on the $295,000 sale.
Companies such as Help-U-Sell Real Estate and YHD Foxtons offer savings to owners willing to do some work. In general, they require you to show the house while they help set the price, field calls from prospective buyers, schedule showings, negotiate the sales contract, and coordinate the closing. For extra fees, they can show the house--even enter it into the multiple-listing service so that other brokers will show it, too--but still charge less than a traditional broker. Assist-2-Sell includes showing your home as part of its basic package, which runs $1,995 to $3,995, depending on your area. For a flat $995, the company will help owners who have a buyer negotiate the deal and arrange the closing.
Ben LoCasto, a 55-year-old software executive, sold his house in Queens, N.Y., with Help-U-Sell this spring. It cost him $8,400, vs. the $26,100 a 6% commission would have run on the $435,000 property. All he had to do was show his house about a dozen times: He didn't mind, since he works at home anyway. Help-U-Sell screened callers to make sure they were serious lookers.
This wouldn't have been as easy in a tougher market, with houses taking months to sell. If you choose to sell on your own, decide beforehand how long you'll wait before calling in the pros. After all, saving money isn't your primary goal--selling your house is.
By Carol Marie Cropper