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FSBO signs proliferate on Lowcountry lawns
Hot market encourages sellers to try luck, save money by going it alone
By Brittain Phillips
Contributing Writer
As Charleston enters the summer months, residents have the usual factors—the oppressive sun, shifting jet streams and stifling humidity—to blame as sweat beads on brows. Nothing in the weather forecast, however, can compete with the heat emanating from the area’s residential real estate market.
Tales of houses being snatched up hours after they hit the market are not uncommon. According to the Charleston Trident Association of Realtors—the largest professional trade organization in South Carolina, with nearly 2,500 real estate professionals from the tri-county area—the number of units sold in 2004 reached 12,639, up from 10,778 in 2003, a 17% increase.
The average sale price also rose sharply, from $227,865 in 2003 to $259,313 in 2004. No surprises there, but what has caused some astonishment is the proliferation of the familiar red and white For Sale By Owner signs cropping up across Charleston—especially in areas that have shown high levels of activity, such as Mount Pleasant. Increasingly, sellers are taking matters into their own hands. The reason for the jump in FSBO homes is obvious, according to those in the industry.
“We have such a seller’s market right now, and people really feel that they can sell their houses on their own,” says Mac Jenkinson, real estate agent for Dunes Properties
Relatively low numbers of single-family homes available for sale—a result of restrictive caps on development in several Charleston areas—and a pack of eager buyers have combined to create a strong housing demand, which can give potential sellers the confidence necessary to plant a sign in the front yard and try their hand at the process with a limited knowledge of the nuances of real estate.
FSBO can be dangerous
The implications for Charleston’s residential market are varied. In the eyes of many real estate agents, the inclination toward flying solo on a home sale can be dangerous, Jenkinson says.
“Many people considering the For Sale By Owner approach just don’t fully understand the value of their home,” he says. That can lead to a price set too low, which he adds is often the root of the stories of homes sold within days of owners placing the properties on the market.
“You never hear about the people who make a mistake in setting their price and regret it,” he says.
Paul Samuels, a real estate broker and certified teacher for the Fortune Academy of Real Estate in Mount Pleasant, echoes Jenkinson’s sentiments.
“In For Sale By Owner situations, it boils down to the fact that sellers are really just trying to save money. The problem is that they aren’t always well informed when they set prices. They don’t know how to figure out exactly what they have on the table,” Samuels says. He cites a number of reasons for this, including a lack of reliable information and the emotional attachment to a house that can lead an owner to set an ill-advised price point.
In addition to accurate pricing, the other benefits of consulting a full-service real estate firm are significant and wide-ranging, from the avoidance of legal pitfalls to the peace of mind that comes from knowing that a transaction’s finer points will be taken care of by a professional.
Seller options
But sellers do have options beyond the extremes of full-service real estate and For Sale By Owner.
House Hunter, opened in North Charleston in 2004, seeks to bridge the gap between the extremes. The company offers a wide range of real estate services, many of which are geared toward people who wish to sell their homes on their own but do not feel completely confident in their ability to do so without any help.
“We provide a variety of options so that people can choose the level of real estate service they want,” says Ed Parker, manager of the Charleston-area House Hunter.
The process starts with a Needs Analysis—a standard process House Hunter uses to help a seller determine which aspects of the real estate process he or she is willing to and capable of handling alone.
After that, a seller is presented with a number of services designed to supplement and enhance their efforts with possibilities that range from basic real estate marketing tools, like signs, data sheets and information tubes, to highly involved amenities, like open houses and showings.
Parker says many sellers would be surprised to learn that this type of approach is available.
“The general public is not really aware of the options,” he says. “We feel it’s important to learn what’s out there, so they can make informed decisions.”
Parker’s House Hunter franchise is one of 18 locations across the United States. The company was founded seven years ago in Evansville, Ind., as a FSBO magazine, which quickly gave way to a Web site and eventually morphed into its current form. Parker feels that the company’s success was inevitable because FSBO homes have become more prevalent.
“It’s a natural progression with the resources available on the Internet and the presence of more educated sellers,” he says.
Although his business offers a non-traditional method for residential real estate, Parker comes from a family that has been in real estate since the 1930s and is quick to acknowledge the continuing relevance of traditional, full-service real estate firms in the Charleston market. Among other things, he points out that limited-service brokers cannot be involved in contract negotiations.
Still, Parker knows that House Hunter’s services will be attractive to many who are intent on taking care of a sizeable portion of their home’s sale.
“People have options in real estate, and sometimes they don’t know it. We hope sellers will educate themselves as much as possible,” he says.
Brittain Phillips is a contributing writer for the Business Journal.
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