Encouraged by the best home sales in recent years, many Washington-area home sellers are trying to market their homes themselves rather than using real estate agents.
Local agents and brokers this week said the apparent increase in the number of "for sale by owner" homes is a natural outgrowth of what has been the best sales year since the late 1970s.
"You tend to have more 'for sale by owner' houses" when the market is strong, said Tom Stevens, president of the Northern Virginia Board of Realtors and head of Shannon & Luchs residential operations in northern Virginia.
"When you have a good market, it is easier to sell a house yourself," noted Rufus S. Lusk III of Rufus S. Lusk & Son, Inc., a real estate information and publishing company based in Washington.
While the signs for homes for sale by their owners are more visible and more numerous than in recent years, real estate agents downplay the significance. They say those signs reflect the total active resale-market. Stevens said he thinks the numbers are "proportional" to the total number of housing units for sale.
According to the Lusk firm, only 30 to 35 percent of the sales that are now recorded in the District are represented by sales that went through multiple listing services used by real estate agents. That means if there are 100 sales in the District, only about 30 are being sold through agents using computerized listings.
However, "that does not mean that all the other 60 to 70 percent are being sold by owners," Lusk said. "There are other factors involved."
For example many D.C. brokers that are not members of multiple listing service operations and many new condominiums and single family homes never appear in computerized sales lists.
Lusk draws its statistics on recorded transactions with local government rather than from multiple listings reports. In northern Virginia and suburban Maryland, boards of Realtors release sales figures on a monthly basis. Board officials almost always caution that those figures do not include most new home sales and never include "by owner" statistics. In addition, in today's market many houses are sold before agents enter them into the computer systems.
Like real estate professionals who report they are able to sell houses in two or three days, individual sellers also say they have had rapid sales.
Individuals who are successful in marketing their own homes today are likely to be what industry sources call "informed sellers." Many have sought advice from agents or friends in the real estate business. They have studied the competition and know final sale prices of comparable homes in their neighborhood. They have read tips on selling and generally have discussed potential offers and contract provisions with their own attorneys.
For example, the William Keefe family of Reston spent several months fixing up their townhouse before trying to sell it.
"The key was getting it ready," Keefe said this week.
When they put their home on the market, they were lucky. Within two days after placing an ad in a weekly newspaper, Keefe sold the house. He said it took another few days to work out details but "the whole process took less than a week."
Keefe used a real estate technique that many agents reserve for what they consider expensive or special properties. He prepared a three-page brochure, complete with photos and a map, to pass out to those who saw his house.
An owner of a townhouse in the Kings Manor area near the central business district of McLean had 22 different potential buyers up at her recent Sunday open house. She said that she had a contract within three days but she rejected it. She said she is encouraged by the number of people coming back for second visits. She said the fact that the house is for sale "by owner" is a plus to most of those who seem serious about buying her townhouse.
Charlotte O'Conner, an agent with Property Associates, cautioned that owner sales "can be risky" unless sellers know what they are doing and use good settlement lawyers.
"If someone wants to sell a house themselves, I have told them to try it for three weeks and see what happens," O'Conner said.
"Most people who do it think they know more than we agents do or they have had a bad experience with an agent," O'Conner said.
Another Fairfax county agent said, "Some sellers and some buyers just do not like to deal with agents at all."
Elaine White, manager ofthe Potomac office of Long & Foster real estate in Montgomery County said she thinks there were more "by owner signs" in the spring than she's seeing now. She said owners usually try to sell in the spring knowing that if they fail they will still have time to give it to a Realtor before the summer ends.
"I see the signs 'for sale by owner' every day as I drive to work," said Joseph Hayden, an official with the Northern Virginia Board of Realtors.
"Selling a house today is a difficult job," Hayden said. He recalled selling a house years ago in Maryland by himself. Fortunately, "an old girlfriend bought it," he said.
When a seller tries to sell it without an agent, "first the sign goes up. They then have to talk to everybody who comes in," Hayden said.
He said Realtors bringing in potential buyers "like to say that they qualify those potential buyers . . . whether or not the buyer is at least in the ball park" of the price range of the house.
In contrast, owner-sellers say that they have an advantage because they have a special appeal to renters nearby.
"If you are living in a neighborhood and like it, then an owner selling may lure you into the market to buy the house while the interest rates are still good," said one agent. That syndrome has happened often this summer in town house developments, agents agreed.
Several owner-sellers contacted this week said they think their ads have attracted buyers who are just as serious as those who go to see houses that are listed with real estate companies. Other owners reported inquiries from neighbors who are looking for properties for friends to purchase.
Ann Brown, a Mount Vernon realty agent who keeps up with efforts by owner-sellers, said more people are likely to try to sell on their own now. She said there are probably more sales because interest rates are less steep than they were a few years ago.
Several agents said sellers often forget to obtain standard sales contract forms to give to prospective buyers.
"I like people to work the market themselves because then they find out how much work it is," Brown said. However, successful owner-sellers who have also sold homes through agents said the process isn't greatly different. Several said they were frantic before open houses no matter who was acting as host.
Successful sellers said they thought they were able to explain special features of their homes better than agents could. In contrast, agents said owners often are too close to their own homes to market them objectively.
Ironically, some owner-sellers end up letting friends who are agents handle actual settlement of the deals. Others allow the agents who sell them their new homes to handle both transactions for a negotiated fee rather than a commission.
"In a lot of cases, those properties [for sale by owner] are sold by a Realtor," Stevens said. "A lot get sold by agents even though what you see is the 'by owner' sign."