Owners Selling Homes Must Be Savvy, Informed and Have a Little Luck

Thomas and Agnes Gunzler are home sellers who are going it alone --without a real estate agent, that is.

The couple relocated in early November and are now self-marketing their former home--a four-bedroom, three-bath ranch-style home in the hills of Encino--for $439,000.

The Gunzlers are spending about $400 a week to attract would-be buyers with newspaper advertisements. They have also held five open houses and taken lots of phone calls. They hope that the time and money they are spending now will save them the typical 6% commission that gets divided between real estate agents representing sellers and buyers.

“We wanted to sell the home ourselves to save money. The market is way down and saving up to 6% on broker commissions makes a big difference to us,” said Thomas Gunzler.

Any real estate agent who presents the Gunzlers with a buyer is being offered a less-than-usual 2% commission. “Half of the real estate agents who have called think our offer of 2% is reasonable. The other half want at least 3%,” Gunzler said.

The Gunzlers say they aren’t currently willing to offer buyer’s agents more in commissions or offer buyers much of a break on the asking price. “The house is at the high end of the spectrum in the area,” conceded Thomas Gunzler, “but we feel it’s the right price.”

If the house doesn’t sell within a few weeks, Gunzler said, he and his wife plan to take it off the market and instead offer it as a rental.

About 16% of U.S. home sellers go it alone like the Gunzlers. Another 9% try selling on their own and eventually surrender their home to a listing agent. The rest mostly use a real estate professional from the start, according to the National Assn. of Realtors. Home mortgage lenders report that roughly one out of every 12 loans they make are on properties that are “for sale by owner”--better known as FSBOs.

FSBOs aren’t the easiest way to sell a home or condo, nor do FSBOs generally get the benefit of being a part of multiple listing services sponsored by local real estate boards or other comprehensive listings restricted to real estate professionals.

Saving 6% on the sale of a typical $250,000 San Fernando Valley or Ventura County residence, however, is very tempting indeed. “You can sell your home independently in both good and bad markets,” said Northridge resident Crystal A. Russell, author of “Sell Your Home Yourself and Save Thousands.”

The book is temporarily out of print while Russell works up a second edition, but the first edition is available in libraries. To succeed as an FSBO “you must educate yourself; you have to make it a project,” said Russell, an attorney in private practice in Encino.

“The earthquake and the decline in the market has made it much harder to sell a home without a real estate professional,” she said. Still, it’s doable, Russell insisted. The Internet, for example, offers all sorts of ways to list a property for sale on public bulletin boards. Sellers just need to think creatively, Russell said.

“I’m not down on brokers; they do provide a real and valuable service. But brokers haven’t done a good job of explaining what they do to earn their money,” Russell said. Is a $500,000 home twice as much work to sell as a $250,000 home? Few brokers can offer an adequate answer to that question, she said.

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Local real estate agents maintain that the best way to sell a home is with professional help. After all, they say, would you consider going to court without the help of a lawyer? Selling a home has become more legally complex in recent years and sellers are increasingly attractive targets for lawsuits by disgruntled buyers. It’s also both time-consuming and expensive to market a property properly--especially when the Valley and Ventura County’s marketplace could be described as lackluster at best.

Sellers who want to try going it alone need to be prepared. Before even listing a house or condo for sale, sellers should carefully study the comps, or comparable sales in the neighborhood. It’s advisable to visit other homes for sale and compare prices and amenities. Sellers may also want to ask the opinion of local real estate agents about the right asking price. Next, sellers need to make an advertising budget and be prepared to spend at least several hundred dollars a week. Sellers who have been successful at selling their own homes also advise others to have a phone message that gives more details about the property being sold and, preferably, a telephone number where a live person can be reached by an interested caller.

Sellers should visit their local real estate board and scan the bookstore for reading materials and forms such as the standard California Assn. of Realtors’ Real Estate Purchase Contract and Receipt for Deposit. It may also be advisable for an FSBO seller to consult a real estate attorney to make sure that all the paperwork is properly completed and that a legally binding contract exists. Escrow can be handled through an independent escrow company or a title insurance company that also provides escrow services.

Disclosures are another essential part of selling a home today. Failure by a seller to make all of the needed disclosures related to a property can lead to a lawsuit. A good start for making disclosures is the California Assn. of Realtors’ standard Transfer Disclosure Statement. Sellers should keep in mind that there are special disclosures for earthquake zones, federal flood zones or state fire responsibility areas. Cities and counties have their own disclosure requirements.

All of the intricacies of selling a property can amount to a daunting and risky undertaking for the uninformed. Some sellers are opting for a middle ground between doing it all themselves and hiring a full-service brokerage.

Limited-service brokers, such as Help-U-Sell franchises, let sellers show their homes and handle potential buyers directly. Help-U-Sell charges a fixed fee that still offers sellers help and entry onto multiple listing services.

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One of the best places to begin thinking about selling a home, either by owner or with a real estate agent, is at the bookstore or library. Owners who want to sell on their own may want to review “The For Sale by Owner Kit” by Robert Irwin (Dearborn Financial Publishing Inc., Chicago). This 1993 book explains the pros and cons of selling without an agent and offers advice for do-it-yourselfers.

Ultimately, pulling off a sale without the help of a real estate agent depends on how savvy the seller is, the strength of the home market--and a little luck doesn’t hurt.