After watching friends sell their house on their own, John and Janet Selway decided that they could do the same and jumped into the market without using a real estate agent.

The couple put an advertisement in the newspaper and planted a "For Sale" sign in the front yard. And then they waited.

One month passed.

Another month went by.

Then, it was 90 days.

Finally, after four months they found a buyer.

Each year, about 15 percent of the 4.5 million people who put their homes on the market try to complete the transaction without an agent. Like the Selways, they often discover the process takes a lot of hard work.

"It takes a lot of time and dedication," Selway said. "Be prepared to give up your weekends, every weekend, for as long as your house is on the market."

On average, it takes about five to six months to sell a home in the Baltimore area, according to statistics compiled by Metropolitan Regional Information Systems Inc., the multiple-listing service for Realtors. The Selways held an open house almost every week for 16 weeks before getting a contract in January.

And the price they got for their two-story Colonial in Idlewylde?

L "Let's just say we got what we asked for," John Selway said.

As the real estate market enjoys one of its most robust years in memory, sales like the Selways' are causing some sellers to question the need for an agent. Some homebuyers prefer to take on the burden of selling their home -- becoming a "FSBO," an acronym for "For Sale by Owner" -- rather than pay a real estate agent the traditional 6 percent or 7 percent commission.

On a $200,000 house, that's a savings of $14,000.

Sounds like a good cost-saving strategy, especially for those who can't afford to pay an agent, have little equity in their home or haven't seen it appreciate greatly.

But remember that sellers such as Selway and experts in the real estate business -- and not just the agents and brokers, who have sales commissions at stake -- say selling a house involves a lot more than a sign in the yard and a few well-placed ads.

You must also be prepared to do your homework. "Selling a home isn't just a matter of putting an ad in the paper and boom, it's gone. It does take work," said Bruce Hahn, president of the American Homeowners Foundation, a national nonprofit consumer group in Arlington, Va.

"What you need to do, to get the price you deserve, is a lot of research," he said. "You've got to figure out the right price for your home and then develop a good marketing plan. Most importantly, you must have a bent for negotiating."

That might mean reading a book or calling friends in the real estate business for tips -- and then taking their advice. It also helps to have a relative in the real estate business. Selway's father is a builder who offered his son "lots of good advice," Selway said.

It takes a lot of work to sell a house. If you're a double-income family, or if you've got a lot of other responsibilities, "you may want to think twice," Hahn said, or at the very least, consider other alternatives.

Several real estate agents offer a smorgasbord of options, from basic consulting services to incentive programs that allow homeowners to forgo paying their sales agent a commission if they use the same agent to buy their new home.

In Severna Park, Dave McCollough has operated a Help-U-Sell franchise since 1992 and says his business has grown 60 percent through the years. McCollough said Help-U-Sell is a "full and complete service" that is based on a fee for services.

Owner shows property

"The only distinction is that the owner shows the property," said McCollough, a member of the National Association of Realtors. Although fees vary from franchise to franchise, McCollough said he charges anywhere from 1 percent to 6 percent of the sales price.

"The more choices we give the seller, the better they like it," he said.

However, the professionals say hiring an agent may be a good idea, especially if your home is in the upper price ranges.

"People who are in the market for a $600,000 house don't want to deal with amateurs," said Nathalie Mullinix, president of Realty Universal Inc. in Owings Mills, a non-traditional real estate firm that helps people sell their homes with -- or without -- an agent.

"In high-end transactions, a FSBO can really be hurt because the buyers may be the better negotiators," said Mullinix, who has been in the business 13 years. "That's where a good agent can help you."

About 675,000 people sold their homes without an agent last year, according to the National Association of Realtors. "For Sale by Owner" transactions have remained constant for the past decade, accounting for 13 percent to 16 percent of the market, said Jeff Lubar, the association's spokesman.

"But of the number that do sell on their own, more than half say they wouldn't do it that way again -- that the hassle just wasn't worth it," Lubar said.

The national group does not track the number of homeowners who hire an agent after unsuccessfully trying to sell without one. But real estate professionals say the figure is probably high.

'Tired of sitting around'

"The people who end up hiring a Realtor are usually the ones who have to sell quickly or are tired of sitting around on Sundays waiting for people to come to the house," said Jordan Clarke, president of the United Homeowners Association, a Washington nonprofit group that represents the interests of homeowners.

"Common sense is key," he said. "It's like fixing a car. People pay a lot of money taking their cars to mechanics. If you don't want to pay a mechanic $60 an hour, then you'd better be prepared to learn a lot about cars.

"The same goes for houses. If you don't have time to spend on the project, you'd better have a Realtor in mind," Clarke said.

So you've considered the pros and cons of selling your home on your own, and figure you have both the time and patience it takes to learn the process.

Consumer advocates suggest you begin by hiring an appraiser to determine the appropriate price for the house.

"Pricing a house too high or too low can be disastrous," said Mullinix. "Too high, and it could languish on the market. Too low and you could be cheating yourself."

Marketing plan

Once you've set your asking price, you must develop a marketing plan. This can include newspaper ads, fliers and signs. It can also mean getting it placed on the Internet and paying a broker a flat fee to add it to a multiple-listing service -- a database used by real estate agents to find homes for buyers.

For a one-time fee of $500, Mullinix will place your home on a listing service for six months, and after you've found a buyer, will review all contracts and attend settlement. She also offers other options, which are outlined in her copyrighted "Bill of Fare."

"Everything from a one-time consultation to a full-service listing and more," said Mullinix, who charges a commission fee of up to 10 percent, depending on what services the seller requires.

"With technology evolving, especially the Internet, there's more information about the sales process available to homeowners -- everything from how to market a home to what legal documents are required for the sale," said Mullinix.

"Clients are wanting to get more involved in the transaction," she said. "My nontraditional approach allows them to pick and choose which services they need and how involved they will be."

Need a handyman to fix up your home? Or how about weekly cleaning services to turn your house into a showcase model? Just name it, and Mullinix will make the necessary arrangements.

Her $500 "For Sale by Owner" option worked for Benjamin M. Hoffman, a real estate investor who recently used the program to sell a two-bedroom, two-bathroom condominium in the Upper Park Heights area of Northwest Baltimore.

Credits multiple listing

"I'm convinced I'd still have the condo today if I hadn't used this program," said Hoffman, who believes that placing the property on the multiple list was the key to a successful sale.

"I listed the condo in February and got a contract in early May," Hoffman said. "I had it up for sale for about two months before I used this service, with nothing but a bunch of tire-kickers calling. It was a total waste of time."

Homeowners who try to sell without an agent often discover, as Hoffman did, that it's difficult to find a qualified buyer.

"Usually it's the seller who pays the buyer's agent. So many agents aren't eager to show 'FSBO' listings," said Allan Dale of Regal Homes 3 1/2 % Realty Inc. in Carroll County. "It's not worth their while if they're not going to be rewarded for their effort."

Dale found a unique way to circumvent all of that. He simply waives his commission fee. But there is a small catch.

"You have to agree to buy your next home through me," said Dale. "I collect my fee from the second transaction."

In other words, the person who sells you your new home pays Dale a commission.

Frank W. Soltis of For Sale Buy Owner Real Estate Services in Bel Air tapped into the FSBO market about five years ago to compete with traditional real estate companies that refuse to haggle over commission rates.

Soltis, a longtime vocal opponent of high commission fees, charges a flat fee of $350 to place a home on the multiple list, and a 3.5 percent sales commission.

'House sells itself'

"Real estate companies put the fear of God in homeowners, telling them that if they don't pay a 7.5 percent commission, their house is not going to sell," said Soltis. "That's simply not true. Anyone who knows anything about the real estate business knows that a house sells itself."

Selway's advice: "Figure out what your home's selling points are. For me, it was the school district -- one of the best elementary school districts in the county -- and the fact that my house was the newest house in the neighborhood. I built it myself 22 years ago."

Once a marketing strategy is in place, hiring an attorney to handle the legal aspects of the sale may be a wise decision. Because the sale of a home is a legal transaction, any error in the paperwork could be legally binding -- or worse, land you in court.

Jonathan Azrael, Towson real estate attorney who has been in the business since 1966, says many problems can be avoided if the sale agreement is clear.

"Because each deal has its own issues and contingencies, I tell clients to write down the essential terms of the contract -- price, whether there will be a home inspection, whether the sale is contingent on financing and what's included in the sale," said Azrael, who charges between $250 and $750 to complete the transaction.

He also recommends that sellers take a deposit of at least $1,000 and let the buyer know the sale is subject to writing up a for- mal contract within three or four days.

But remember, a lawyer might not be able to help you with all aspects of the sale.

"There's more things in a real estate transaction than just the legal paperwork," said Marc Witman, president of the Greater Baltimore Board of Realtors. "That's why I get hired by lawyers to buy and sell houses."

Hard questions

Witman said that when you sell a house, you must be prepared to answer some hard questions:

How do I know the buyer is qualified? How much of a deposit should I hold? How do I maximize my market reach? What am I going to include in my contract of sale to make certain that the contract protects me, gives me the power to hold the buyer to the deal?

"A Realtor can answer these questions," Witman said. "And perhaps even more importantly, an agent has the ability to negotiate without letting emotion get involved."

Said Mullinix: "You really need a good negotiator to look out for your interests or the deal could blow up."

She saw this recently in a transaction where the buyers were more savvy than the sellers. The sellers knew this and resented it.

"Things just didn't click, and the sellers lost the contract," Mullinix said. They ended up hiring her and paying a 7 percent sales commission.

The lesson here, Mullinix said, is "be prepared. Mistakes could cost you."

Doing it yourself

Tips from the experts for homeowners considering a "For Sale by Owner" transaction:

* Educate yourself. And, if possible, seek advice from real estate agents -- and then follow their advice. Agents will sometimes answer your questions in hopes that if you're unable to sell on your own, they'll get the listing.

* Get an appraisal. This will help you price the house accurately for the market you're in. The cost is usually about $350.

* Develop a marketing plan. Place newspaper ads, print fliers, put up signs, consider paying a broker a flat fee -- between $200 and $500 -- to list your home on the multiple-listing service and Internet.

* Hire experts. Pay an attorney to draft the paperwork and hire a reputable home inspector. The home inspection will help you market your home -- you'll be able to head off any potential problems.

A sampling of companies

Help-U-Sell Real Estate

* A franchise business started in 1976. Five offices in Maryland. Fees and services vary by office. For example, Help-U-Sell of Severna Park/Pasadena (410-544-8500) will help sellers, who have found a buyer, prepare a contract and guide a transaction for a fee of $1,500 on homes selling for more than $100,000. www.helpusell.net

Owners Network

* This Internet marketing service charges sellers $115 for a premier package or $65 for a standard package. With a standard package, sellers get one photo, home summary checklist and unlimited comments. Premiere package includes the above items plus electronic "customized yard sign" and "custom taglines" as well as five photos. Names, address and phone numbers of sellers are listed. www.owners.com

FiSBO Registry Inc.

* An Internet database of "for sale by owner" properties. For $950, the service will place a home on its Web site. Name of owner and information regarding location of the property will not be listed. Buyers will contact owners by e-mail, using a code number supplied by the owner. www.fisbo.com

Pub Date: 11/29/98