For Sale By Owner

FSBO Statistics

The old quote, ‘Some people use statistics like a drunken man uses a lampost; for support rather than illumination’ couldn’t be more appropo that for the real estate industry. An often quoted statistic by Realtors is from the National Association of Realtors annual survey to support or buttress its argument. On the NAR website, it provides this statistic “the typical FSBO home sold for $187,200 compared to $247,000 for agent-assisted home sales.” (2007 National Association of Realtors Profile of Home Buyers and Sellers) The other often quoted statistic is that Realtor assisted sale achieves a 16% premium over FSBO sales.

The problem with statistics about For Sale By Owner sales is that the only source of information we have is from ‘inside’ the real estate industry where statisticians have more than a small incentive to report figures that support using a real estate agent and ignore stats that might promote FSBO as an alternative. First, there are way too many unknown variables. It seems nearly impossible to identify and track FSBO statistics. For example, there are variations of FSBO with sales directly by owner, sales with marketing by FSBO companies, and sales via MLS-only or limited service options available from discount real estate brokerages. Are these more even-handedly to be considered FSBO listings or should they be included in the statistics of Realtor sales?

Since any listing that appears in the MLS is lumped in with Realtor sales figures, it stands to reason that the results are already tainted. For there own reasons, NAR surveys haven’t split out the differences between listings serviced by ‘full-commission, full-service’ real estate practitioners and those handled by ‘limited service or flat-fee’ professionals. Until there is some attempt within the NAR to distinguish among these types of sales with regard to FSBO sales, then the statistics will unswervingly support the notion that property owners in the U.S. simply cannot hope to outperform Realtors when it comes to selling real estate.

Some people have expressed concern over trying to sell a home by owner in a buyer’s market. For Sale By Owner is considered a risky prospect by many home sellers even in a good market. After all, that’s why real estate agents make so much money right?

Consider this then. What’s the most important factor in selling a home in a buyer’s market? If you answered ‘price’, you’d be correct. So how does adding 6% or so to your sales price affect your ability to sell in a buyer’s market? Negatively, of course. Having to pay an agent commission actually causes more harm than good when it comes to selling your home in a competitive market.

But what about the marketing exposure you ask? Isn’t the only way to reach enough buyers to sell your home in a tough market through a real estate agency with all of thier contacts and ability to reach a larger audience? The answer is yes. But that doesn’t mean you have to give away 6% of your home’s gross sales price. If what you need is marketing exposure you can list with a flat fee MLS listing company like Bloomkey.com. For a low, one-time flat fee you can get the exposure you need to sell your home in a buyer’s market and still price your home competitively. And if you need help with the contract or have questions about the process, you can add those services for a flat fee rather than giving up your home’s equity.

FSBO in a Buyer’s Market? Absolutely!