Editor’s note: In this three-part series, Inman News uncovered the different real estate business models through the eyes of consumers. We sought out their experiences with full-service versus flat-fee discount brokerages and for-sale-by-owner to see how they stacked up. (See Part 2: Home sellers test alternative realty shops and Part 3: Traditional home sale hinges on good agent.)
Real estate is often described as an inherently local affair, and Ray and Beth Merrell took this adage to the extreme when they sold their home last year through neighborhood contacts.
“We didn’t go to the MLS, we didn’t even go to the newspaper – we sold it word-of-mouth,” Merrell said.
The couple was moving from their longtime residence in the Chicago suburb of Oak Park, Ill., to a custom-built home in Pueblo, Colo., and they enlisted a subdued sales approach.
“We had been in the house for over 30 years,” said Ray Merrell. “The market was real good, houses were moving – were in demand.”
So the Merrells decided to print up a one-page flier to let their neighbors know they were planning to sell. “Our block was a very active block,” Merrell said. “You know most of your neighbors, we had a couple block parties a year.” They distributed the fliers to their neighbors and friends, and even handed them out at church.
The flier stated that “the rumor is true” and contained details about a private open-house event.
The rule: “Anyone who came had been invited by a neighbor” or was a neighbor or friend, Merrell said. “We had 25 interested parties come through that day, interested in the open house.” The Merrells had agreed upon a range in price that they wanted for the home. “We had a $10,000 window.”
Interest in the home died down for a week or so, he said, and then it picked up again. Some folks dropped by the house and knocked on their door. “That’s basically how we sold it,” he said. “We had six valid offers, all within the price range. So it went very smooth.”
The Merrells hired a lawyer to handle the logistics of the sale, and a real estate agent was not involved in the transaction on the listing side or the buy-side.
They put a sign up in front of their house on the day of the private open house, but otherwise the sale was an entirely low-key affair. Merrell said that the booming seller’s market in the area made for an easy sales process.
“I am retired. We didn’t have to move at any particular time. Everything fell together well,” he said. “There are advantages to getting national coverage in an MLS. In our case we just didn’t need it, so I wasn’t going to expend the money for it.”
When the couple purchased that home in Illinois decades ago, they worked with a Realtor. Merrell said he recalled the printed MLS book that the Realtor used to search for available properties.
Colleen and Donald Fenrich used a sort of hybrid for-sale-by-owner strategy to sell their home in Florida, paying a Realtor a 1 percent commission to handle the paperwork relating to the closing of the sale transaction while they handled the marketing themselves.
The Fenrichs had purchased a kit with all of the necessary paperwork to complete a home-sale transaction, but they decided that it was a tall order to prepare all of these documents. “We did not feel qualified to do the closing and everything else. (Our agent) said, ‘I’ll handle that for 1 percent,'” she said.
The Fenrichs were moving into a new home in Sun City, Calif., and they decided that they would put their professional background in marketing to the test. “I drove around the neighborhood. I looked at comparable homes,” said Colleen Fenrich.
The Fenrichs had two real estate agents take a look at their home to give them an estimate of its value. “We felt both of those estimates were too low,” she said.
They had put some work into their property, installing a new roof, adding a fresh coat of paint and resurfacing the pool. “All that money we got back, plus,” she said. The local housing market conditions didn’t hurt either, she added.
Fenrich wrote up the language for a newspaper ad, which appeared in two area newspapers for one weekend. “We had the ad in Friday, Saturday and Sunday – (the buyers) bought for cash the next week. We had two other offers and we took this one because it was cash,” she said. The property was never listed in an MLS.
“It was unreal. It worked out really well for us,” she said. “I doubt if that would ever happen again.” The Florida house sold in early 2004.
It was the fourth house they had sold together. “The first one we sold with a Realtor, the second one we sold ourselves, the third one sold with a Realtor was a real bummer,” she said. That third home, in Grand Rapids, Mich., was actually bought by a neighbor who saw the for-sale sign in their yard, and Fenrich said she figures they could have sold that one by themselves, too.
Of course, if they had a tough time selling the home in Florida, there was a back-up plan to hire a Realtor to help market the property, Fenrich said. “We had a contingency plan. We were going to go for like 60 days – if we didn’t sell then we were going to give it to our Realtor. My recommendation is: Give it a try (yourself), but put it on a trial period and use a Realtor as a contingency.”
Any regrets about tackling the property marketing themselves? Fenrich said she was a bit offended by some of the remarks that prospective buyers made during walkthroughs of her home.
“You are in for some comments when you do it yourself. One woman came over, went in our bedroom and said, ‘Oh my God is that ugly wallpaper,'” she recalled.
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