Modified sell-it-yourself plan attracts many homeowners

To what extent might the economic constraints of the 1980s foster new ways of cooperation between real estate agents and home sellers? Will a ''For sale by owner'' (FSBO) sign on the front lawn ever be a welcome sight to the real estate industry?

The 5 to 7 percent commissions paid to brokers for selling houses are not expected to change. Yet most of the FSBOs (the term, pronounced ''fizzbos,'' is also applied to those selling their own homes) interviewed in the Greater Washington area said they would cooperate willingly with agents if the owners were to pay a maximum commission of 3 percent, or about one-half of what is normally paid when a house is sold.

This means that an agent could show such a house to clients even though the owner is doing the same thing. A sale by an agent would bring him a 3 percent commission, while a sale by the owner would result in no commission.

''The general mood of the public seems to be changing,'' says Mareen Cartledge who, with her husband, Bob, is selling a $150,000 condominium in Chevy Chase, Md. ''People seem to have more of a do-it-yourself attitude nowadays and are more willing to take on the risks of selling their own home.''

The National Association of Realtors (NAR), however, says it is unaware of a FSBO trend and does not think owners selling their own homes is a sound idea. ''Selling a home without professional assistance is like a beginner skiing straight downhill,'' a spokesman says. ''It's strenuous and hair-raising.''

Another reason for the lack of enthusiasm by realtors is, obviously, the lost commission. In a National Homebuying Survey prepared by the economic and research division of NAR in 1981, 23 percent of home sellers sampled tried to sell their own homes. Two out of 3 succeeded, and of those only 16 percent said they would definitely use an agent the next time around.

In that one year, FSBO sales resulted in almost $2 billion in lost commissions.

Nationally, the rate of FSBOs varies dramatically from city to city. The realtor study shows Miami and Atlanta have much higher-than-average percentages of sales by owners - 27 percent and 20 percent, respectively.

Baltimore, with 4 percent, and San Francisco, with 6 percent, have the lowest sale-by-owner rates - far below the national average of 15 percent.

What motivates a homeowner to become a FSBO? Many homeowners apparently believe a 6 percent commission, in light of the high prices of property today, is too much. Many choose not to deal with real estate agents. In a few cases, FSBOs are agents who are selling their own houses or investment properties. Others have taken a real estate course or have had significant experience with prior sales.

After listing their condo with a firm for three months, the Cartledges decided that they could do a better job. Their plan included advertising every day in a newspaper, writing to neighbors, placing 3x5-inch cards on the bulletin boards in their condo complex and larger signs on telephone poles, and writing to local real estate agents and large companies that might be relocating employees in the area.

In addition to this advertising strategy, they say they are confident they can negotiate a contract (with the help of an attorney); check the credit rating of a prospective buyer (although in this case they are not offering owner financing); locate a lender and title company; prepare the necessary paperwork, such as deeds and loan papers; and close the deal.

Since choosing the FSBO path, the Cartledges have had twice as many people look at their unit as saw it when it was entered in a multiple listing service (MLS).

Ten real estate agents responded to their letter offering a 3 percent commission for selling the condo. Three of the 10 came with clients. The remainder tried to talk the Cartledges into listing with their agencies.

Another homeowner had only 1 of 10 agents accept the 3-percent-commission proposal. The other nine agents who came by after seeing the ad in a newspaper pressed for an exclusive listing.

Treading the fine line between conventional real estate sales and the FSBO style of selling, National Homeowner Services of Arlington, Va., offers a cooperative arrangement to owners. For a flat fee of $300, the house for sale is entered in a multiple listing service. Any agent can earn a 3 percent commission by making the sale.

Meanwhile, the owner is free to sell the property himself, but he cannot compete with the broker by advertising.

Third parties involved in selling a house don't seem to mind FSBOs. However, Jan Woolston of Investors Title Company in Silver Spring, Md., finds that she may have to spend more time with an owner, explaining such requirements as termite inspections and roofing certifications.

Whether the trend toward FSBOs is rising due to the impact of the four-year economic recession and the narrowing of real estate profits in the last few years or is down because it's harder to sell a house today, one thing seems clear: A lot of homeowners like the do-it-yourself model.