Jun 15, 2009
The Problem with FSBO Statistics
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.
