I have always wondered why commissions to agents are so high here in the USA vs what we pay in Australia. Aivars Lode
By Paul Owers, Sun Sentinel
4:36 p.m. EDT, May 19, 2012
As the once-beleaguered housing market improves, homeowners are showing more interest in selling solo.
Delray Beach-based BuyOwner.com says home sales in Miami-Dade, Broward and Palm Beach counties are up 200 percent this year, compared with the same period of 2011. Listings have increased 150 percent, the company said.
ForSaleByOwner.com, a Chicago-based site, has seen a 400 percent increase in Florida sellers visiting the site from January through April, compared with the same period a year ago. That far outpaces the 183 percent increase in sellers nationally. The two websites declined to release specific figures.
"People are starting to hear more stories from their neighbors about how quickly they're selling," said Eddie Tyner, general manager of ForSaleByOwner. "There's more confidence now that the market is recovering."
ForSaleByOwner is owned by a division of the Tribune Co., which owns the Sun Sentinel and other newspapers.
During the housing boom of 2000 to 2005, homes often sold themselves for top dollar, prompting many sellers to eschew a real estate agent charging a standard 6 percent commission based on the sale price. A homeowner selling for $300,000, for instance, would save the $18,000 commission.
The housing crash that followed sent many sellers back to agents and the multiple listing service, the collection of homes for sale in a particular area.
Now, though, multiple offers and bidding wars have returned, mostly on homes $200,000 or less. That is convincing owners of homes near that price that they may be able to sell on their own through Craigslist or one of the for-sale-by-owner sites.
Sellers can buy packages on the websites, spending less than $100, up to a few thousand dollars.
Basic packages give sellers a handful of home photos and listings on various websites. More-expensive services include access to a local MLS and assistance handling the contract from a real estate attorney.
For-sale-by-owner isn't for everyone, said Jon Holbrook, president of BuyOwner. One of his employees, Dan Bodenstein, has sold three houses by himself, including one in October.
"Cash-wise, it's silly not to try it," said Bodenstein, 43, of Royal Palm Beach.
Some solo sellers don't save as much as they first thought because they end up hiring lawyers to review the contracts. Also, some have to pay a 3 percent commission to a real estate agent who brings them a buyer.
Agents, of course, say for-sale-by-owner generally is a bad idea.
They're trained negotiators who earn their money in casting a wide net for buyers and coordinating appraisals and home inspections, said Jon Klein, an agent for Real Living 1st Choice Realty in Coral Springs.
"The hardest part is from the signed contract to the closing," Klein said. "There are so many things that can happen."
Some buyers will insist on price discounts because no commissions are involved, said Joe Kohn, a Fort Lauderdale real estate lawyer. In other cases, uninformed sellers don't make as good a deal as they could have because they don't know the market, he said.
"Are there exceptions? Yes," Kohn said. "But overall, most people who do it on their own have problems."