The Real Deal Miami

Owner sales difficult in cold South Florida market

By Jennifer LeClaire | April 22, 2009 12:28PM

The For Sale by Owner (FSBO) industry took a 12 to 13 percent market share of real estate transactions nationwide in 2006, but in a weaker economic climate, every sell is a tough one, and going it alone may not be worth it.

Regardless of whether an agent’s 6 percent commission is at stake, South Florida remains one of the slowest markets in the nation.

Janice Leis, broker at Prudential Fox & Roach in Boca Raton, said a tough real estate market is no time for sellers to be penny pinchers.

“In a marketplace with a saturation of inventory, and a small window of opportunity seasonally, you want to stand out,” which a good agent can do better than most do-it-yourselfers, she said.

A recent report from Real IQ and Altos Research said the typical home in Miami-Dade, Broward and Palm Beach counties sits on the market for 193 days. Chicago is the second toughest market behind South Florida. The average home owner there posts a “for sale” sign in the yard for 180 days.

But widespread price declines in South Florida — as much as 40 percent off the 2006 market peak — also mean sellers can fix on the price tag and the bottom line. There are plenty of options that now make it easier to maximize the final sale yield, said Eric Mangan, a spokesperson for ForSaleByOwner.com.

“Today’s FSBOs aren’t just using a yard sign or even an online ad to get their home sold. They are using tools like access to the MLS and Realtor.com,” Mangan said. “Companies like ours are always adapting to new selling-buying climates by providing new tools and resources to help customers.”

He said new data from the National Association of Realtors shows that the Internet continues to grow as a dominant information source for home buyers. NAR statistics found that 32 percent of buyers first saw the home they purchased on the Internet, up from just 8 percent in 2001.

The percentage of buyers who found their home through a real estate agent has dropped from 48 percent in 2001 to 34 percent in 2008.

NAR also found that people who go the FSBO route get closer to their asking price and sell more quickly than those who use an agent. And separate studies from Northwestern University and Stanford University found that FSBO sellers are as effective as agents in maximizing the sales price of their homes. After commissions, the universities report, FSBO sellers come out financially ahead.

Despite the marketing push and the credible statistics, local real estate brokers are reporting fewer FSBO signs in yards than in years past.

Leis, the Boca Raton broker, said a longer time on the market could prove more costly.

She sold her own home using a real estate agent, and priced the house below other recently closed transactions. It sold for 30 percent over the asking price, she said, because she was not emotionally involved. The realtor handled everything.

“FSBOs historically tend to know it all, are unavailable for showings, or if they are home they follow you around the property, pointing out the 10-year-old upgrade that is now completely obsolete,” she said.

Christian Kawas, a realtor at Douglas Elliman Florida in Miami Beach, said he’s seen less competition from FSBOs in the past quarters. In fact, his last few meetings with FSBO sellers typically lead to new listings.

“The most common trend that I have seen with FSBO is that they are much more open to sitting down with agents than in the past,” Kawas said. “Owners are going at it alone for much shorter periods of time and then they are listing with a professional.”