For Sale By Owner Homes Lower Once Again

It has now been three years in a row. FSBO transactions, also known as For Sale By Owner, have dropped again. Only 8% of home sales were FSBO homes, which is the lowest it has ever been. This is according to the National Association of Realtor , which started publishing the annual Profile of Home Buyers and Sellers report in 1981. 

From 2001 to 2008, FSBO sales were between 12% and 14%. Last year, the percentage of homes sold with a real estate agent was at a record high of 89%. This number has only gotten higher as it hit 92% this year.

Jessica Lautz, the NAR Managing Director of Survey Research, believes this is due to the current market conditions. Sellers are in need of an edge as the market is very competitive. Real estate agents are able to provide that necessary edge.

When surveyed, about 15% of FSBO sellers stated getting the right price for their home was the biggest obstacle they faced. Another 13% said selling within a certain timeframe was important; while 12% believed understanding the paperwork was an obstacle.

While sales of FSBO properties are done, the median sales price went up from $185K to $190K. However, the median sales price of homes sold with an agent was $250K.

FSBO homes did sell faster than agent-assisted home with 58% selling in less than two weeks. However, this is a bit skewed, as many of these homes are sold to someone the seller already knows.

Why Choosing the FSBO Route isn’t a Good Idea

Hiring an agent may cost you a little bit in a commission, but it may also mean a higher sales price. In fact, the stat mentioned above shows that agent-assisted home sales go for $60K more, on average.

One of the major reasons to avoid the FSBO route is the access you gain to the Multiple Listing Service (MLS) with an agent. Without this access, it’s very difficult to accurately price a home when selling it. You need sold home comparables to set the market value. Many FSBO sellers simply look at what neighbors are asking, which doesn’t always reflect the real value of the property.

In addition, working with a real estate agent will automatically allow you to tap into qualified buyers. These buyers will likely be pre-approved for financing, which makes them serious buyers. If you go the FSBO route, you may think you have a serious buyer, but they may not be able to get approved for a mortgage.

Real estate agents also know the paperwork involved in selling a home very well. They work with these forms and documents daily and will be able to advise you when it comes to contingencies and other necessary parts of the transaction.

Selling your home is one of the largest financial transactions of your life. Unless you have a ton of experience with home sales and the local real estate market, it’s a good idea to seek professional help. A local real estate agent will be able to help you sell your home for the right price, within the right timeframe and they have excellent knowledge of the paperwork involved.