Joseph and Mary Steneman never considered the traditional option of listing with a Realtor when they wanted to sell their home and buy a larger one.
Instead, they went the route of "for sale by owner," and successfully sold their Canton home within weeks of putting it on the market.
They are not alone in a housing market that has tilted toward sell- ers.
A recent National Association of Realtors survey of 5,700 homes sold nationwide found that about 17 percent were for-sale-by-owner transactions.
The allure of what the real estate industry calls a "FSBO" is fairly clear: By forgoing the use of a listing agent, some sellers believe they can save thousands of dollars in commission fees. Typically, sellers pay 6 percent of a home's sale price to real estate brokers, who split the fee -- half to the agent who represents the buyer and half to the sell- er's agent.
The Maryland Association of Realtors says a professional can market the home to more potential buyers and tackle much of the work involved in selling the home, which can be time-consuming and complicated. The trade association, which represents more than 19,000 real estate agents statewide, believes that selling a house requires the expertise of a trained professional to ensure that the sale is handled properly.
Although the Stenemans had sold their first home themselves, they opted for a slightly different route when putting their Canton home on the market this year.
At the time, there were about 55 houses in Canton listed in the mid-$200,000 range. Since those homes were listed in a computer database used by real estate agents, the Stenemans were at a disadvantage in competing for prospective buyers. So the couple paid a local broker to list their home on the Maryland Multiple Listing Service, which is accessed by more than 32,000 Realtors.
In addition, the Stenemans distributed fliers to nearby real estate offices and in most cases, found the agents to be receptive.
Their diligence paid off: They received an acceptable offer within four weeks, paid a commission to the buyer's agent and closed without a hitch. In all, they saved about $7,000 by representing themselves. They sold the home for $234,000.
The Stenemans acknowledge that they were willing to put in the effort and dedicate the time to sell their home. For some, the demands of selling a house without an agent's assistance can be great, says Daniel Motz, a real estate agent with the Roland Park/Wyndhurst office of Coldwell Banker Residential Brokerage. During the past few months, Motz has seen several sellers make the switch from FSBO to a listing agent because of the work involved.
Industry representatives argue that by using a seller's agent, homeowners might be able to get a higher price for their house. According to the National Realtors' survey, the median sales price of a home sold with an agent was $175,000 compared with $137,400 for those sold without one.
With today's seller's market and shortage of available homes in certain areas, Motz acknowledges, it might be an opportune time for the curious to attempt going it on their own.
"Generally, if sellers price their houses correctly, especially in neighborhoods that are very hot right now, and if they are savvy and willing to put in the time, you can certainly understand why people would want to save the 3 percent," he said. "You can't blame people for wanting to do that in, say, Charles Village or Hampden or Wyman Park or Roland Park, because the inventory is so low at this point."
But it isn't for everyone, he said.
One recent client in Hampden, Motz recalled, had tried the FSBO route, but quickly grew weary of the telephone calls and intrusions that real estate transactions often entail. After a few weeks, she gave up and signed with an agency.
"Some people who have the time and have the energy to do all the appointments and hold all the open houses ... they definitely are entitled to do that," Motz said. "But it can be a lot of work."
Most of the time, he explained, FSBOs will offer a 2.5 percent or 3 percent commission to the buyer's agent in an effort to get more potential buyers into the home.
The Stenemans, for example, offered a 3 percent commission and a separate bonus to the buyer's agent who sold their home.
But some people who sell their house themselves refuse to pay a commission either way.
"That is when you really shut off a huge segment of the market, because most active buyers already have real estate agents," Motz said.
"As a general rule, people who don't offer a commission at all, generally their house won't get shown. Because it's hard to say to a buyer, 'You have to pay X amount of dollars for a house, plus a 3 percent commission.'"
Maynard Gottlieb, a veteran real estate broker for 30 years, founded Mr. Lister Realty to provide an option for homeowners looking to sell their own properties. The company has listed more than 3,500 properties in the Maryland area and generated a total of nearly $104 million in sales since being founded six years ago. It is one of several listing services in the area, many of which can be found online.
"Normally, when you list your home, there's a commission to be paid, and half of that goes to the person who lists your house and the other half goes to the person who sells your home. We eliminate the listing commission," Gottlieb said.
For $399, Mr. Lister places FSBOs on the MLS and on four real estate Web sites. The company also provides assistance in reviewing contracts and calculating closing costs ($75), draws up contracts ($300) and attends settlements ($250). The extra services are popular among homeowners who want to market and sell their own homes but feel more confident with some professional guidance, Gottlieb said.
Gottlieb said several real estate agents have criticized his business.
"But what they fail to realize is that a majority of the people would never list their home because they couldn't afford to pay the commission," Gottlieb said. "So, I'm putting properties on the market that they never would have seen, and they're still getting their same commission they would normally get regardless of who listed it."
Even so, Joseph Steneman advises homeowners to do their research before deciding to sell themselves.
"You can't panic; you have to be savvy. ... There's a lot of information on the Internet," he said. "You can get onto the state's tax assessment site and find out what homes have sold for."
And he emphasizes the importance of marketing wisely to get the attention of potential buyers.
"You see a lot of houses that have generic for-sale-by-owner signs from Home Depot on their property," Steneman said. "And they seem to languish a long time."