FSBO Home Sellers Cut Costs;
Find Buyer in Less Than a Month

When John Odermott and his wife Michelle decided they wanted to move from the high-cost suburbs of Portland, Ore., to the more wallet-friendly Billings, Mont., they opted to sell their home without a real-estate agent. "[We were] very keen on the idea of not having to pay a commission," says Mr. Odermott, an accountant.

The couple had purchased their house in 2002 for $183,800. The 1,688-square-foot, ranch-style home has three bedrooms and two and one-half baths on less than a quarter-acre in Hillsboro, Ore. They hoped to get $265,000 to $275,000 for it.

Selling a home without a real-estate agent can be a money saver. On average, home sellers in the U.S. pay a commission of 5.02%, according to a 2007 Federal Trade Commission report. And sellers are likely to garner the same selling price, whether they use an agent or not.

But going it alone can be a time drain. Owner-sellers may have to put in more legwork in marketing the property and showing it to prospective buyers. Properties "for sale by owner" (FSBO), take about three weeks longer to sell, says Aviv Nevo, a professor of economics at Northwestern University, who coauthored a June study with researchers at the University of Wisconsin-Madison that compared sellers who used an agent and the Multiple Listing Service against for-sale-by-owner sellers.

But the Odermotts didn't go it completely alone. In January they signed up with HomesByOwner.com, an online real-estate company that offers fixed-fee and reduced commission selling services. Mr. Odermott, 45, had used the Web site five years ago when he and his wife sold a three-bedroom, two-bath house across town.

This time, the Odermotts' $1,360, 90-day package included a for-sale posting on the Web site, three monthly for-sale listings in a local HomesByOwner.com print magazine, signs to lead buyers to their home and a lawn for-sale sign with a place to write their phone number and a spot to place pamphlets. The package also included admission to a home-selling seminar, which the Odermotts attended.

Mr. Odermott posted another listing on Craigslist.org, at no cost. "My wife and I decided that since we were putting in all this effort to pack and move, we didn't want to do anything halfway," he says.

The couple took the seminar's advice on preparing a home for the market, competitive pricing and advertising a property.

"We did a lot of cleaning," Mr. Odermott says. "We did some work in the yard and planted flower bulbs for the spring -- we didn't know how long the house would take to sell." They paid a contractor about $400 to update their outdated master bathroom with new countertops and flooring, he says.

The pair had their house appraised, and were told it was worth $274,000. But they asked $272,900 for the house, so they could advertise it as being "priced below appraisal," Mr. Odermott says.

The first 100 fliers that they placed with their for-sale sign "disappeared quickly," so they had more printed-up at no additional cost. "The foot traffic was great," Mr. Odermott says.

The Hillsboro, Ore., home

They held two open houses, one on January 13 and one on the following weekend, when they received two offers. "The Craigslist posting brought in at least as many folks [to the open houses], maybe even more, than the [HomesByOwner] Web site," Mr. Odermott says.

In a matter of days, the first offer fell through because the buyers had trouble with their financing. So the Odermotts contacted the other interested party, Ken Schreier, 57, a software engineer at Intel Corp., who had seen both the for-sale sign and the Craigslist ad and had attended the open house. Without employing a lawyer or hiring a home inspector, the Odermotts and Mr. Schreier hammered out an agreement for $270,000 -- nearly $3,000 below the asking price -- contingent on Mr. Schreier's inspection of the home.

"I went under the house and looked for plumbing leaks, evidence of dry rot, carpenter ants and checked all the electrical outlets and made sure they were wired correctly," Mr. Schreier says. He didn't find any flaws, and they closed the deal about a month later.

"The sellers were very organized" and the home wasn't overpriced, Mr. Schreier says. "I have stopped by some other for sale by owner [homes] before, and they were a good 20% over the price and stayed on the market for a while, too."

Were there downsides to the experience? Not really, Mr. Odermott says. "The fact that you're responsible for making things happen could add a little more stress than selling with an agent, but it's more than compensated for by being in control."

-- Ms. Kim is a senior editor at RealEstateJournal.com.

Email your comments to lauren.kim@wsj.com.