For-sale-by-owner homes rare in Columbus despite hot sellers’ market

On May 6, 2021

Sandy and Jeff Groom are selling the Westerville house of Sandy's late father on their own, without a real estate agent.

Selling a home has rarely been easier: Pop a sign in the yard and wait for the offers.

So why aren’t more homeowners doing it?

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According to the National Association of Realtors, 8% of homes last year were sold by owners, up slightly from 7% the year before but well below the peak of 15% in 1981. About half of those owners knew the buyer, according to the 2020 NAR Profile of Home Buyers and Sellers.

That leaves about 4% of homes sold by homeowners directly to strangers, which is consistent with Zillow and Trulia data. For-sale-by-owner homes (“FSBOs”) have traditionally accounted for 4% to 5% of listings on those sites, said Haley Mills, a spokesperson for Zillow, which also owns Trulia.

“Overall, we are not seeing an uptick in FSBO listings in recent months,” she said.

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That’s true in Ohio’s three largest metro areas as well, according to Zillow data.

In February, 4.3% of Columbus-area homes listed on Zillow and Trulia were being sold by owners. A year earlier, it was 4.6%, and a year before that, it was 4.5%.

Cleveland has a slightly higher share of FSBOs, at 5.1%, and Cincinnati has 6.1%, on Zillow and Trulia.

The numbers for all cities fluctuate monthly, but have shown no upward movement despite the lopsided housing market of the past year.

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Given the upper hand sellers now have, Jeff Groom of Bexley doesn’t understand why more homeowners aren’t selling on their own.

When Jeff and Sandy Groom decided to sell the Westerville home of Sandy’s late father, Jeff Groom dug up a hand-painted “for-sale” sign and stuck it in the front yard. Within days, he had an offer he was happy with and sold it.

“I’m shocked I don’t see more for-sale-by-owners now,” said Groom, who said he has sold three or four houses on his own. “Maybe people are surprised by the prices and say, ‘Oh, my house is worth that much? Go ahead and list it.’ Or maybe they’re scared of the process.”

According to a National Association of Realtors’ survey, 53% of FSBO sellers last year said nothing in particular was difficult about selling on their own. But others cited preparing the home for sale (12%), handling the paperwork (10%) and pricing the home right (9%).

The overwhelming reason homeowners say they sell their home on their own is to avoid paying the sales commission, which in central Ohio is typically 6% of the sales price, or $18,000 on a $300,000 home.

Groom, who is selling his father-in-law’s house for more than the asking price of $335,000, said “6% is $20,000 — that’s a lot of money.”

Like many homeowners who sell their home on their own, Groom ended up paying a 3% commission to the agent who represented the buyer.

Groom said he was comfortable handling the paperwork, but said the buyer’s agent took care of it.

Doug Knight, who sold his home on his own in the Colonial Hills neighborhood of Worthington this spring after moving from town, also paid a 3% commission to the buyer’s agent, which he said helped the process.

“Having the agent there made it a lot easier,” Knight said. “They coordinated with the title company and I was 500 miles away.”

Knight said he posted a sign in front of his home on a Sunday and accepted an offer two days later. He speculates that many people don’t sell their home on their own because of the fear of paperwork and other logistics, such as the closing and appraisal process.

Knight also suspects some homeowners don’t want to host a parade of strangers through their home — especially during a pandemic.

Doug Turlo, owner of Home Central Realty in Westerville, said he heard from so many sellers last year who had a buyer that he created a service called AgentAssistMe.com that strictly handles the paperwork.

“People were telling me, ‘I’d like to list with you but I’ve already got a buyer. I just need someone to walk us through the paperwork,’ “said Turlo, who charges 1% of the sales price to both the buyer and seller for the service.

“Even though the market’s crazy, deals have never been harder to do because of all the issues that are coming up like appraisal shortages,” he said.

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Michael Jones, president of the Columbus Board of Realtors, agreed that the sellers’ market can complicate the process for homeowners selling on their own. They may have to evaluate multiple offers with complex features such as appraisal gaps or escalation clauses.

“It’s probably even more difficult to navigate today than it was before,” he said. “If it’s a sellers’ market and so many people are clamoring for homes, that suggests this will be a complex web. Who would want to step in and take that on?”

Jones said he’s reassured that so many sellers continue to use real estate agents when demand is so high for homes.

“It gives me a level of confidence that consumers appreciate and respect the knowledge, the skills, the discipline, the process of a Realtor.”

Jones is also confident sellers and get more money listing with a real estate agent and are better protected in the process.

Scott Schaeffer, a partner in the Kemp, Schaeffer & Rowe law firm in Columbus and an experienced real-estate attorney, agreed that today’s sellers’ market can complicate the process for homeowners. He strongly advised those who haven’t sold a home on their own before to get some professional help.

“During this market, it’s interesting how many things can go sideways,” Schaeffer said. “If you’re a buyer or a seller handling this by yourself, you’re doing it once or twice in a lifetime. A broker or an attorney is doing it hundreds of times.”

The process can especially be daunting for homeowners trying to navigate multiple offers with competing prices, contingencies and provisions.

“When it comes down to negotiating the sale of a home, although the market is hot and price is king, price isn’t everything,” Schaeffer said. “There are a ton of things in a contract that could jump up and bite you.”

But those who have sold on their own say, why not give it a shot?

“In today’s market, with demand the way it is and supply the way it is,” Groom said, “at least try it.”

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@JimWeiker

For-sale-by owner tips

Want to sell a home on your own? There’s a lot to consider, from promoting and pricing to staging and selling. Consider a few tips:

• Get exposure. A yard sign might land a buyer, but cast a wider net by posting on social-media accounts and on neighborhood or real-estate sites, including Facebook and Nextdoor.

• Consider “listing” on sites that accept sale-by-owner postings including Zillow, Houseo.com, FSBO.com, ForSaleByOwner.com and Trulia. Keep in mind some of the sites charge for the listings.

• Prepare the home for visitors. If nothing else, declutter and clean the home. Nothing sells easier than a spacious and tidy house. Depending on the condition, a coat of paint and some simple fixes might also be in order. Think twice before embarking on major repairs or renovations; they rarely pay off and buyers might prefer to do their own.

• If a buyer is represented by an agent, a seller’s job is made much easier because the agent can prepare the paperwork and arrange the closing. If not, the seller should have an attorney familiar with real-estate contracts examine the contract. Talk to an attorney early, well before listing the home, advises Scott Schaeffer, a partner with Kemp, Schaeffer & Rowe law firm in Columbus. An attorney familiar with real-estate law can help a homeowner provide the necessary paperwork and help them vet what could be multiple offers with competing contingencies.

• Consider services that handle the paperwork. Some companies, such as AgentAssistMe.com in Westerville, will strictly prepare the contract and other paperwork, such as inspections and disclosures, for a fee, once the seller has agreed on a price with a buyer.

• Work with a title company. A real-estate attorney can often recommend and work with a title agency, which will handle the actual closing of the property. Some title companies will also have attorneys on staff who can help.