Hire an agent or sell home yourself?

Published: March 4, 1995

By Neal Gendler; Staff Writer   

Greg Lawrence says folks can sell their own homes without misery.

Lawrence owns the For Sale By Owner Shoppe in St. Louis Park, where homeowners can rent professional-looking signs. He also helps them write and place ads, design and print brochures and find title, legal and inspection help. He said the alleged difficulty of selling one's own home is mostly myth.

"I get the exact opposite," he said. "I get: `I can't believe how simple it was.' "

Lawrence supported his assertions with data from five years in business: He said he has 5,000 customer evaluations, and a sampling showed many clients reporting, in their own hand, that selling was easier than expected - for some, even a breeze.

Lawrence sold real estate for two years until he realized that store-bought For Sale By Owner (FSBO) signs, with the owner's phone number written in by hand, had an amateurish look that presented him with a niche-market opportunity: creating and renting professional-looking signs like those planted by Realtors. Lawrence said signs and other professional assistance are boosting FSBO acceptance, and during an interview of less than an hour last month, he took calls from two people wanting to rent signs and one asking for sign removal because the home had sold. He's done so well that he now has two competitors.

Last year, he rented signs to 2,000 sellers, he said, and of those, 67 percent were successful. Of the remainder, about 25 percent gave up and listed with an agent, and 8 percent took their homes off the market. Average sign rental time is two months, but for those who sell, it's 47 days. Average time on the market for a Realtor-listed single-family house in Hennepin County last year was 61 days.

"One of my renters, on Chowen Av. S., just sold in an hour," Lawrence said Thursday. "Others have rented the sign for a year." Clients' average market time dropped to a month last year because of low interest rates and the surge of demand, he said. His FSBO time may be short "because a lot of our customers know they have a good, salable house, and that's why they call us."

Angela Lawrence - who's not related to Greg - just sold her south Minneapolis home in only 24 days. She and her husband, Bill, wanted to build a larger house for their family of seven and thought they'd try to sell their home themselves and have more to put into a new place. They heard about Lawrence and decided that renting his sign and getting his ad help would be easy.

"What took the most time was getting the house ready," she said. "Once the sign went in the yard, we started having open houses every weekend." Almost 30 couples came through in two weekends.

"The one thing we found out is that you don't have as many people calling and saying, `Can I come through your house on evenings or during the day?' Most people waited for an open house. . . . It was a lot less stressful; I didn't always have to be cleaning the house."

She said that the process wasn't difficult, and that most of the stress came from thinking they'd have to have a lot of open houses.

"Had I known it was only going to be 24 days, it wouldn't have been stressful at all," she said. They spent about $500 on the sale, and the house sold for more than $100,000, saving them more than $6,500 in commission. She said free appraisals from an agent last spring and last December helped set a price.

"We got what we wanted to get out of it," she said. "If we had to sell a house again, we would definitely sell it on our own."

Lawrence charges $30 a month for the big signs, plus installation. Accessory signs are additional. He also sells a document package including purchase agreements, a qualification form, a mortgage information sheet and a disclosure statement.

In addition, he sells Ceil Lohmar's book, "For Sale By Owner: How to Succeed in the Best or Worst of Times"; a videotape on selling one's home; open-house signs for $10 a month; assistance in writing and placing ads, and assistance in creating and producing fact sheets, as well as rental boxes to hold them atop the yard sign. He is beginning a computer listing service, complete with photos, of FSBO houses. He said the typical total FSBO cost - including a lawyer - is $1,000 to $1,500.

"The rumor about owners not being able to attract enough buyers is, in my opinion, dead wrong. . . . You need only one buyer," Lawrence said. His experience with a house he sold not far from his store was that a 10-line ad brought in 35 to 40 people each open-house weekend.

Lawrence said a homeowner's first consideration should be whether he or she has time to sell the home. He said experience is helpful, but not necessary; organizational skills are desirable. Although agents may not be crazy about the idea, sellers can take advantage of their free market analyses to determine a price. Realtor Todd Grill said agents are weary of being used, but the free service is likely to continue.

"Typically, if they don't sell the house themselves, they'll go back to the Realtor who gave them the analysis, counsel or help," Grill said.

Lohmar, who sold real estate in Minnesota for a decade before moving to California, said buyers might discount an agent's commission when making an offer on a FSBO home, but she said that is not necessarily bad.

"The seller will cash out the same amount, and he will sell it easier," she said. "If the Realtor was going to list at $100,000 and the buyer was going to offer $93,000, the seller comes out the same and the seller has made his house reach a wider market by being able to give a lower price."

Lohmar said that selling by owner requires two qualities beyond knowledge. One is willingness to take responsibility and assemble what she calls a team of experts.

"They do need mortgage people, and they need a closer," Lohmar said. "They might need a title company, and they would be wise to hire a warranty insurance company. . . . These things will give the buyer a feeling of substance." Lining these people up in advance will soothe buyers and get the seller all kinds of help, especially from lenders and title firms that may profit from referrals by the seller, she said.

She said it's essential to get a good sign, which she called "the biggest enticement." Although some agents disagree, Lohmar said that "people know the area where they want a house, so a conspicuous sign is the best thing a buyer can do."

She does not consider lack of appearance in the Multiple Listing Service (MLS) a big liability. Her own house in a Minneapolis suburb is an example: She listed it with an agent, left town for several weeks and returned to find about 40 cards from agents who'd been through - around 35 were with the same big firm and would have known about her house even without MLS.

"The typical buyer drives by and sees the house or is having dinner at a neighbor's house and sees it," Lohmar said. "People like to live where they know somebody rather than go into an area cold."

The other big requirement is determination.

"You should ask yourself: Have you wanted to do it? Have you wanted to show your house yourself? Do you want to talk to people about your house?" she said. "The person has to want to; they have to have a little flair for it. It's not just the money."