On a lark last spring, Ronald Grant decided to "list" his South Pasadena house for sale on the popular real estate valuation website Zillow.com.
Zillow estimated his home's worth at $1.4 million. But Grant, who was planning to sell his home when he retired in two years, decided to have some fun. So he posted a notice on the site saying he would gladly hand over the keys to anyone willing to pay him $1.6 million for his 4,500-square-foot abode.
"I thought, what the heck. I had nothing to lose," he recalled.
Two days later, after receiving an e-mail from a would-be buyer and giving a showing, his house was in escrow for his asking price.
"Usually when you sell a house, you have to repaint it, put flowers in the yard, spruce things up. I didn't have to do any of that," Grant said. "I didn't even have to make my bed."
Even better, in Grant's view, was the fact that he didn't have to pay a real estate broker's commission, which typically runs 5% to 6% of the sale price and is split between the buyer's agent and the seller's agent. Grant ended up saving $80,000 to $96,000.
"Everybody wants to save that commission," he said.
Especially these days. As the real estate downturn leeches value from homes, homeowners thinking about selling are tabulating how much it will cost them if they do. And they are looking for ways to sell on their own, skipping the traditional method of hiring a full-service, high-commission broker.
"People today are paying more attention to how much equity they will have left at the end of the transaction," said Steve Ozonian, chairman of Help-U-Sell, a nationwide real estate brokerage that offers sellers a menu of services that range in price. "Now that the market has slowed and in some cases prices have declined, what's left in your pocket is a relevant issue -- and the commission that is paid is a big part of it."
New Internet options
Traditionally, the role of the real estate broker has been to help sellers market their home to other brokers representing buyers; as compensation, the brokers keep a percentage of the final sale proceeds.
In the process, the broker shares local market data with the seller to help set the asking price, puts a sign in the yard, sends out fliers, prepares brochures, takes out ads and networks with other real estate professionals. The broker also handles queries from prospective buyers, negotiates on behalf of the seller and sees the transaction to its close.
One of the broker's most important functions has been to list the property in the MLS, or Multiple-Listing Service, a nonpublic database that alerts buyers' agents to what's on the market and how much they could be paid. When a seller agrees to list his house with a full-service licensed broker who is a member of the MLS, he relinquishes control of the listing. Even if the seller finds his own buyer, he will still be required to fork over the commission.
Nowadays, sellers can perform many of those functions themselves -- often at lower cost.
Sellers can tap the Internet to learn what the market conditions are and help set their price. Websites such as Trulia.com, Catalisthomes.com and ZipRealty.com offer free information about recently sold homes, average time on market, neighborhood price trends and other market information that was previously available only to brokers.
Once a homeowner decides to sell, sites such as Zillow and Craigslist.com offer a free platform for consumers to advertise their properties, allowing them to reach potential buyers without the MLS.
All this is making it easier for consumers to educate themselves about their local housing market in a way unimaginable even five years ago.
"With all the sources and the breadth of real estate content and with more analytical tools, and given the fact that more consumers have become skittish about overpaying, consumers will continue to use more of these tools online," said Steve Murray, publisher of Real Trends, an industry newsletter based in Littleton, Colo.
How one couple did it
It was "basically a financial thing" that spurred physicians Emily and Giancarlo DiMassa to sell their Westwood condo this summer on their own after buying a house in Pasadena.
"We wanted to see if we could do it ourselves and save money on a real estate agent," Emily DiMassa said.
First, the couple spent time researching local "comps," or comparables -- that is, recent condo sales in their neighborhood -- on various websites, including Zillow. Then they stopped by a couple of open houses of condos for sale on their block. Finally, they set their price.
"We made sure we were in the ballpark," she said. "We priced it based on a combination of what was on the market and what we needed to make it worth our while."