Selling your home: Should you list it with a real estate agent?

Pop quiz: 1. True or false: A real estate agent represents both buyer and seller. 2. A real estate commission can be (a) 5, (b) 6, (c) 7 percent.

3. It's impossible to sell a house without a real estate agent. True or False.

Pop answers: (1) False. The agent represents only the seller and earns a living only by selling a house. (2) None of the above. There are no laws setting commissions for real estate agents. The fee can be negotiated. But beware: A disgruntled agent might not be an eager salesperson. (3) False. You can - and that is the subject of this article.

First, consider what normally happens when a house is sold.

A real estate agent is engaged and performs a valuable service in bringing prospective buyers to the house and facilitating the purchase. Given the extensive ''multiple listing service'' network real estate brokers maintain and the energy agents put into the art of selling, a house usually can be sold quickly and painlessly this way.

It costs, however.

For that work, an estate agent receives 4 to 7 percent of the sale price of the house.

Usually the homeowner simply builds the real estate commission into the selling price, so that the agent's fee is covered. Right there, however, one should stop - at least to question whether the agent's fee is really worth the effort.

Most of the time it is. On a $100,000 house, you are talking about $4,000 to house, you are talking $20,000 to $35,000! Even if you grant that (1) real estate agents perform valuable and unique services in facilitating the actual sale of the house, and that (2) you could perhaps jack up the price of your house - still, that kind of money might be better spent.

You, the seller, could get the money. Or you, the buyer, could benefit in the form of a price reduction. Or the two of you could split the difference.

When should you consider selling a house without an agent?

If you're confident your property is desirable and you'll have little trouble drawing the buying public to it, you might go it alone. If the buyer is already known to you - a neighbor, family member, current tenant - a sale could be an easy affair. If your house has appreciated so little that the amount that goes to the real estate agent's commission would eat into your initial investment, you might want to save the agent's fee.

A word of caution: You should not attempt to circumvent a real estate agent when a listing contract is in effect. This is unfair and the agent could well sue for recovery of the commission.

OK. If you are still ready to go it alone, these are some points that real estate agents, lawyers, how-to authors, and veterans of the for-sale-by-owner experience advise that you keep in mind:

First determine your price. Real estate agents usually help you with this. Without an agent, you might want to call an appraiser in the Yellow Pages. Or if you understand what comparable houses in the neighborhood have sold for (this is public record) and what the market will bear, you might be able to arrive at a sales price. But try to be objective; don't overvalue the property. You'll find that the house doesn't sell and that you have to consider dropping the price. Next, call around to area banks, savings-and-loans, and mortgage companies and make a list of mortgage terms. You can hand out photocopies of the list to prospective buyers.

Prepare a spec sheet on the house also, listing price, property taxes, energy costs, square footage, number of bedrooms and bathrooms, type of heating and cooling, and the age and type of furnace, water heater, kitchen appliances, roof , etc. You can accentuate the positive, if you wish, by listing, say, the new fence, deck, in-ground pool, and other amenities. Also make a note of what items go with the house - draperies, carpeting, lighting fixtures. A good photo of the house should be included.

Be sure to get the house into impeccable condition. Glaze and clean the windows, repair the downspouts, paint, trim the yard. When prospective buyers arrive, the beds should be made, the bathrooms spotless, laundry out of view, and no one should be cooking. One possible exception: Some veterans recommend that you bake a batch of cookies to give your house a homey smell. You can also put a drop of perfume on a lightbulb or open some potpourri. If the weather is the least bit cool, light a fire in the fireplace. Turn on all inside lights in all the rooms before the prospective buyer arrives.

Now determine how best to advertise. A ''for sale by owner'' yard sign is usually a good idea. A well-worded advertisement in the Sunday newspaper is smart also. (Even if you have a real estate agent working for you, you might, if you have a decent command of the language, write, edit, or at least approve the advertising copy that the agent produces; often you will know what to emphasize better than the agent.) You could also let your credit union know and put up a notice on the company bulletin board.

Hold the house open on several weekends and get ready to receive visitors after work. The more accessible the house, the wider your market. But be sure your guests sign in, with telephone numbers and addresses - not only to follow up but also as a precaution in case a guest has other intentions in looking at your house.

Without working against your own interests, be frank about drawbacks with the house or the neighborhood. It is better for you to acknowledge them up front, because this implies that your price takes the drawbacks into account already. If the buyer discovers problems during the inspection, he or she can use them as a bargaining chip to negotiate the price down.

Be prepared - just as you would if you had a real estate agent bring prospective offers to you - to negotiate on the price. If the buyer is alert he or she will know that you are saving the commission and might be inclined to ask you at least to split the difference. You won't have the counsel of a real estate agent when the offers come in, so you'll have to make up your mind about which is best or whether it might be better to lower the price.

Retain an attorney to examine any purchase and sale agreement (contract of sale) or other contractual matters and act as a liaison between you and the buyer if need be. The deed transfer document also should have legal scrutiny. The buyer will need his own attorney to do the title search and examine documents. Keep in mind that virtually nowhere is an oral agreement in a real estate transaction enforceable. The contract must be in writing. An attorney is usually best at analyzing such a contract and altering it in any way necessary before you sign.

Don't accept clauses that allow the purchase to be contingent on factors such as the sale by the buyer of another piece of property or any arrangement that prolongs the transaction and locks the house off the market. Fair clauses would be ''contingent on approval of financing'' and ''contingent on a termite inspection.''

Before you accept a sales contract and take it to your attorney, you should attempt to determine whether the buyer qualifies for the financing. Get a list of the buyer's employer's name and address, gross annual earnings, gross annual income, outstanding debts.

A yardstick for determining whether the buyer can make the payments is to take 1 percent of the sales price for mortgage, taxes, and insurance payments. A Banks usually hold that a buyer's payments should be no more than 25 to 30 percent of combined gross income for the buyer, depending on liabilities.

After all that, you can decide for yourself whether saving several thousand dollars is worth it - or whether you have a new appreciation for the efforts of real estate professionals.

Some recent books that may help: The Intelligent Investor's Guide to Real Estate, by David W. Walters. New York: John Wiley & Sons Inc., 1980, $17.95. Real Estate: The Ultimate Handbook, by Andrew James McLean. Chicago: Contemporary Books Inc., 1979, $6.95. Creative Home Financing, by Douglas M. Temple. New York: Coward, McCann & Geoghegan, 1982, $13.95. The Complete Condo & Coop Information Book, by Nellie Blagden and Edith Paul Marshall. Boston: Houghton Mifflin Company, 1983, $7.50.