Four years ago, when Judy Cruz decided to try to sell her house on her own, it couldn’t have been easier. She struck up a conversation with a neighbor who said he’d love to buy it from her. Deal done.

But when she decided to sell her Chicago condo this year, it was a different story.

"I tried advertising it online for four months," said Cruz, who explained that posting free classifieds on Craigslist were the sum of her efforts.

By MARY UMBERGER

Four years ago, when Judy Cruz decided to try to sell her house on her own, it couldn’t have been easier. She struck up a conversation with a neighbor who said he’d love to buy it from her. Deal done.

But when she decided to sell her Chicago condo this year, it was a different story.

"I tried advertising it online for four months," said Cruz, who explained that posting free classifieds on Craigslist were the sum of her efforts. "The only calls I got — and I think there were just five — were from people who wanted to know if I would consider rent-to-own."

That wasn’t an option, so right after Memorial Day she gave up and listed the unit with an agent. Her for-sale-by-owner experiences are a familiar story line in housing’s then-vs.-now saga, where time and effort have acquired new, sometimes painful meaning.

But "bottom line" has new meaning, too, considering home values have declined and the notion of milking every dime from a transaction has inspired many sellers to dig in their heels and go it alone to pocket the money they might otherwise have paid an agent.

So, even in a daunting down market such as this one — or perhaps because of it — the FSBOs are out there, amounting to perhaps 20 percent of all homes on the market today, by some estimates.

Money motivates

"In 2003, I could have sold this house in a heartbeat," said John Kerkam, who in May began advertising online for a buyer for his mountain cabin in Loudon County, Va., outside Washington, D.C. After one week, his ads had generated two calls, which he viewed as a good start.

He says his eyes are wide open to housing’s changed picture. Although over the years the former contractor built and fairly easily sold three homes on his own, he expects the sale of his own residence could be a prolonged affair.

"In the fall, I’ll probably pack it in for the winter if it hasn’t sold," he said. "And then I may turn it over to a friend who’s a real estate agent."

Or maybe not, once he runs the numbers. Saving the cost of an agent’s commission motivates him because he needs to maximize his retirement savings, he said.

"That’s their concept, trying to save the commission," said Palos Hills, Ill., agent Kathy Toscas, who said in her experience FSBOs lose money by spinning their wheels.

Pitfalls of flying solo

She recently has taken on listings of failed former FSBOs. She said where those homeowners tended to trip up — when they did attract potential buyers — was in the vetting process.

"The average FSBO is attracting people who aren’t qualified buyers, or if they are qualified, they still have a property to sell — and today, if a buyer has to sell their own property to sell first, forget it," Toscas said. "Or, they attract bargain hunters" who try to wheedle down the price too far.

So, in addition to asking hard questions about the qualifications of potential buyers, she says would-be FSBOs have to work hard to put the word out on the street, creating fliers and working the phones — calling everybody they can think of to say, "My house is for sale — do you know anybody who might be interested?"

"It’s hard work," she says. "You have to promote the daylights out of it on a daily basis."

Other agents also say FSBOs have to be wary of running afoul of property disclosure and fair-housing laws and of contract wording.

Firm data on for-sale-by-owner properties is by its very nature difficult to collect and subject to many qualifications. The National Association of Realtors and companies that assist for-sale-by-owner properties long have sparred over it.

Crunching FSBO numbers

NAR data show that FSBO sales vary widely by region, from 10 to 26 percent of all sales last year. Overall, they accounted for 13 percent of sales, up from 12 percent in 2007 and 2008, which he said were record lows.

However, many such transactions are complicated to classify, as they aren’t technically on the open market because they were between friends or relatives, according to NAR spokesman Walter Molony.

True open-market FSBOs accounted for 7 percent of transactions in 2008, which he characterized as a downtrend from 10 percent in 2004. …CONTINUED

Eric Mangan, a spokesman for ForSaleByOwner.com, which offers online marketing services and information for sellers, contends that FSBO properties sell more quickly than agent-assisted homes. He said NAR’s own research showed that in 2008, sellers in the open market sold their homes in a median six weeks vs. 10 weeks for agent-assisted sales.

He also said FSBO properties sold for more money, proportionately, than agent listings. Citing the Realtors’ 2008 report, "Profile of Home Buyers and Sellers," he said the median agent listing sold for 96 percent of its asking price vs. 97 percent for FSBOs in the open market.

The NAR report, however, also said that agent-assisted sales netted a $204,900 median vs. $153,000 for all FSBOs.

Mangan contends that FSBOs are plentiful today.

"We rely on data from RealTrends (an industry research and information company) and we think 20 percent of the market today is FSBO listings," he said. "But not all FSBOs are equal," meaning that the aggressiveness of their marketing will make all the difference.

Do-it-yourself marketing

"Somebody just putting a for-sale sign in the yard or just a Craigslist ad — they probably won’t be successful," he said. "Ninety percent of buyers use the Internet to search for a home, so online has to be the centerpiece of their marketing strategy, and it has to be everywhere — we tell people to advertise on Craigslist and we syndicate our listings to Yahoo, Google and CribFinder, the real estate application on Facebook.

"Then they have to go word-of-mouth, telling everyone at the PTA meeting and their neighbors. They do have to have yard signs, and those yard signs have to have a flier box," Mangan said.

But, Mangan agrees, the current market is a challenge that may turn out to be a learning experience to any FSBO seller who had an easy time of it a few years ago.

"This is one thing we’re telling sellers: The biggest thing in a slow market is to be patient," he said. "That, and not to make it an emotional event — to treat it like a business transaction."

Ryan Pilkington said he took that to heart when he posted his Lincoln, Neb., home at ForSaleByOwner.com in mid-February, paying the online company what he estimates at $200 to $300 for the online ad and various services.

"I didn’t really know a lot about selling for-sale-by-owner until we decided to do it," he said. "I downloaded some of the information on the site, and there’s a tutorial on the site on how to sell your house."

At first, he said, there wasn’t much activity. Then he and his wife, Jennifer, dug in.

HGTV, fliers and a price drop

"I watched a lot of HGTV," he said, laughing. He took their shows’ tips to heart, rearranging furniture and repainting the house’s front door for more appeal.

He said they got a lot of phone inquiries and distributed "a ton" of fliers. Their open houses — in all, about a dozen, he estimates — got old, but the couple decided they were necessary. They got one offer that fell through because of financing issues.

"I didn’t think to ask, ‘Are you preapproved?’ " he said. "We were going off his word that he was good to go."

Undaunted, they kept going on their own; they dropped the asking price from $139,900 to $138,000. In mid-May they got a solid contract for $136,000 from someone who had found the home online.

"Yeah, ideally, it would have been easier if we had had a real estate agent who could have done it for us," he said. "But the whole process wasn’t bad, and eventually we got our objective.

"I’d do it again."

Mary Umberger is a freelance writer in Chicago.

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