Facing complex market, fewer homesellers do it themselves
In a market filled with the complexities of foreclosures and short sales, fewer homeowners appear to be willing to take on the chore of selling a house by themselves.
Nationally, for-sale-by-owner transactions “FSBOs” to real estate professionals have accounted for about 9 percent of residential sales this year, says the National Association of Realtors.
That continues a steady slide since 2003 and 2004, when FSBO transactions accounted for an estimated 14 percent of residential transactions.
Northern Nevada real estate groups don’t track FSBO sales closely, but real estate brokers say the numbers clearly have declined perhaps even more dramatically than those in the rest of the nation.
“I can’t recall the last time I saw a for-sale-by-owner sign,” says Sandi Smith, an agent with Coldwell Banker Best Sellers and the new president of the Sierra Nevada Association of Realtors in Carson City.
A quick search of ForSaleByOwner.com, an advertising and marketing Web site, found about 20 homes listed for sale by owner in the Reno, Sparks and Carson City area last week. Realtors say the total for sale by owner in the area is probably around 75.
That compares with about 2,100 properties for sale through the Multiple Listing Service in Reno and Sparks alone.
The decline of FSBO transactions reflects the complexities of the current market, says Ken Amundson, the managing broker for First Choice Realty 500 who is wrapping up a year as president of the Reno-Sparks Association of Realtors.
For starters, for-sale-by-owner transactions aren’t allowed in short sales, which account for roughly 30 percent of recent sales in the Reno-Sparks market.
Peel out another 30 percent of the sales that involve foreclosed properties put on the market by lenders, and that leaves at most 40 percent of the residential business that’s available for FSBO transactions.
But even then, the market’s complexities can stymie homeowners who want to sell on their own, says Smith.
“This is such an ever-changing game,” she says. “It seems like they come out with a new program almost every week. Every lender is different, every sale is different.”
And Amundson says buyers’ markets seldom work in favor of FSBO transactions.
“For-sale-by-owner transactions are most prevalent when we have a strong sellers’ market, when it’s relatively easy to sell a home and the market is hungry for houses,” he says.
The Reno-Sparks Association of Realtors describes the current market when measured by month’s of inventory available for sale as tilting slightly toward buyers.
But declining home values also may spur some homeowners to give serious thought to marketing their properties themselves, says Joanne Cleaver, a spokeswoman for ForSaleByOwner.com.
“If you are close to being under water, the commission may represent all the equity you could hope to capture from the sale,” Cleaver says. “It comes down to: Who gets your equity you or the broker?”
The long-term trend of the residential market, in which 90 percent of consumers rely on the Internet rather than a real estate agent for information about properties, is likely to spur further growth in the FSBO market, Cleaver says.
In fact, she says, the numbers of homeowners who post their properties on ForSaleByOwner.com have turned up steadily through the first three quarters of this year.
Assist-2-Sell looks to Canada for growth
Assist-2-Sell, the Reno company that found success in the middle way between traditional real estate brokerage and the for-sale-by-owner model, is keeping its mojo going north of the border.
Launched by Mary LaMeres-Pomin and Lyle Martin in 1987, Assist-2-Sell offered home sellers a marketing program at a flat-fee, discounted commission price.
The model took off, and by the market’s peak in mid-2005, Assist-2-Sell had close to 500 franchised offices around the nation.
With the end of the boom, the company lost some franchises, says Barry Wardell, senior vice president of franchise operations. Today, about 300 offices nationwide carry the Assist-2-Sell flag.
The company is finding its greatest success these days, Wardell says, in marketing its franchises in Canada, where the real estate sector was spared the worst of the tsunami that washed over U.S. markets. NNBW staff
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