For Sale By Owner Homes Sell for 14% Less – 2022 Report
In 2021, 90% 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. That was on par with 2019-2020 and slightly lower than 2018 (91%). Only 7% of home sellers sold their homes For Sale by Owner (FSBO). For sale by owner homes sold for much less in 2021 than homes represented by real estate agents, 14% less, which we will explain here.
For Sale By Owner Rates Have Dropped Consistently Over the Years
The 7% of FSBO home sales in 2021 was down by 1% from 2020. The For Sale By Owner rate has been steadily dropping since the NAR first began keeping track in 1981 and has stayed relatively the same over the last few years. In 1981, 15% of home sellers chose FSBO instead of using a real estate agent.
For Sale By Owner Statistics
Here are some FSBO statistics from the most recent 2021 NAR Profile of Home Buyers and Sellers. These are national statistics, so the numbers may be slightly different for Portland. They do, however, give a good indication of the real estate market specific to FSBO:
- Median selling price for a FSBO home was $260,000. Median selling price of a real estate agent-assisted sale was $318,000.
- In half the cases, the main reason homes were sold FSBO was 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 $273,800. That’s still significantly less than the median price received by an agent-assisted sale.
- The median time on market for FSBO homes was only one week compared to three weeks for agent-assisted sales. That’s because in over half 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 11 weeks on the market. Most of these weeks were probably spent with the seller sitting on the home or receiving no inquiries before they finally decided to list with a real estate agent.
- FSBO sellers reported after the fact that the most difficult tasks were preparing the home for sale (24%), understanding and performing paperwork (14%), and getting the price right (15%).
Bottom Line to Make More Money, Sell your Home For Sale By Owner or Sell with a Real Estate Agent?
In order to make this decision fairly, we need to take out sellers selling their homes direct to family members. For certainly in that case there are many instances where sellers are intentionally selling under market value in order to help out a known friend or family member. Thankfully, the statistics on FSBO market sales where the seller did not know the buyer and marketed the home on their own, are available. These national real estate statistics on FSBO sales do not paint a pretty picture for combining all the FSBO sales vs. all the Agent sales in 2021, we see FSBO sales where the seller did not know the buyer, averaged a national price tag of $273,800 and Agent home sales averaged a national price tag of $318,000 – a difference in price of 14%! This means homeowners that used a real estate agent instead of selling for sale by owner sold for a whopping 14% more nationally. Funny enough, but that was the exact same percentage difference (14%) in 2020. This makes a 4% commission (our max. rate in Portland and Vancouver) Realtor charge sound perfectly reasonable.
Every year I look at how FSBO sales performed across the country and they fall short of real estate agent sales by double-digit margins. It doesn’t seem to matter if it is a hot or cold real estate market, for sale by owner homes always sell for much, much less.
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 sell your home faster and for market value or better. We pay extra to feature our listings on the top real estate websites. In 2020, we sold 138 homes in less than 30 days on market and 84 in the first weekend. We averaged 100% of our start price as our sold price.
- Convenience. Good real estate agents help schedule viewing appointments or put “smart” lockboxes on 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, negotiate offers, and follow up with buyers on your behalf.
- Networking. Our team is part of one of the largest Realty companies in Oregon and in the U.S., with over 65,000 licensed agent members.
- Protection. A 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. In fact, year after year of national research suggests you will end up selling for less, much less than the cost of Realtor commission.
When it comes to a big investment like a home, a selling strategy with 100% satisfaction should be the only method under consideration. (Our team has collected over 400 positive reviews. Check out our 4.98/5 star average real estate agent reviews here.)November 29, 2021