For Sale By Owner (FSBO) – a good idea? 2018 update
In 2017, 89% of homeowners in the real estate market nationwide sold their home using a real estate agent or broker, according to the National Association of Realtors. 8% of home sellers offered their home For Sale By Owner (FSBO) for the third year in a row. 3% used a different method such as a company provided relocation company.
For Sale By Owner Rates Keep Dropping
The For Sale By Owner rate has been steadily dropping since the NAR first began keeping track in 1981. That year, 15% of home sellers chose FSBO instead of using a real estate agent. By 2007, that number had declined to 12%, and despite the housing market turmoil over the last decade, the rate keeps dropping.
Why? Part of it may be the fact that the NAR and individual real estate agents have done the legwork of educating home sellers about the value of our services. But I think the big reason is that only 7 out of 10 FSBO sellers in the last year reported that they were completely satisfied with their experience.
For Sale By Owner Statistics
Here are some statistics from the most recent 2017 NAR Profile of Home Buyers and Sellers, having to do with FSBO home sellers. These are national statistics, so the numbers may be slightly different for Portland, but they paint a picture:
- Median selling price for a FSBO home was $190,000. Median selling price of a real estate agent-assisted sale was $250,000. (In Portland, the median sales prices of a home in 2017 was $350,000.)
- The main reason that homes were sold FSBO were because the seller already had a buyer in mind before listing the home. However, the median selling price for FSBOs where the seller knew the buyer was $160,300. That’s 36% less than the median price received by a Realtor assisted sale.
- The median time on market for FSBO homes was only two weeks compared to three weeks for agent-assisted sales. That’s because in over two-thirds of those cases, the seller already knew the buyer before listing their home for sale. The statistic for home sellers who first listed FSBO, then changed their mind and went with a Realtor, is telling: An average of 12 weeks average on the market. Most of these weeks were probably spent with the seller sitting on the home, receiving no inquiries, before they finally decided to list with a real estate agent.
- Twenty-eight percent of FSBO sellers did not actively market their home in 2017.
- FSBO sellers reported after the fact that the most difficult task for them was getting the price right, followed by selling their home within the length of time they had planned. Twelve percent reported difficulty with understanding and completing the paperwork involved.
- For FSBO sellers who knew the buyer, 68% reported that they were “very satisfied” with the experience, and 20% reported that they were “somewhat satisfied”.
5 Reasons Not to For Sale By Owner (FSBO)
- Sell faster and for more. Simply put, a real estate agent with a strong marketing program can cause your home to sell faster and for market value or better. We pay extra to feature our listings on the top real estate websites and so generate over 100,000 online views per property we sell. As far as I’m aware, our marketing will far exceed anything a FSBO seller can purchase out there or DIY. In 2017, we sold 146 homes in less than 30 days on market and 78 in the first weekend. We averaged 101% of our start price as our sold price!
- Convenience. Good real estate agents help schedule viewing appointments or put “smart” lockboxes on vacant homes only other agents (or those with an expiring code) can access. Then the real estate agents call and email every visitor for feedback to pass it on to the seller. The agent will facilitate the sale, give expert advice, and follow up with buyers on your behalf.
- Networking. We are part of the largest Realty company in Oregon and the largest in the metro, with over 1,000 local agents in our group. When we advertise a coming soon listing or put one of our homes up for sale on the public market, I gaurentee those 1,000 agents pay special attention.
- Protection.A good real estate agent is your advocate from start to finish, looking out for your interests at every point. As we all know, the buyer does not have the seller’s interest in mind. From offer to repair negotiations and dealing with financing, appraisal, or escrow issues, a good real estate agent will advocate and fight for their seller.
- You won’t save as much as you think, going FSBO. If you are offering your home up for sale FSBO, you’ll find many or most of the FSBO programs out there recommend you offer 2.5% commission to the buyer’s agent. You’ll notice our commission rate is a reasonable 4.5% max. This means we take 2% and give the buyer’s agent 2.5%. So, in most FSBO cases the seller is not saving 6%, 5%, or even 4.5%, they are “saving” 2%. For that 2% we provide incredible (unbeatable) marketing, full representation, negotiations, buyer feedback, scheduling, advice, oversight, and more. There is a reason why we call it reasonable commission.
When it comes to a big investment like a home, a selling strategy with 100% satisfaction should be the only method under consideration. (Check out our 4.99/5 average reviews here.)March 19, 2018