Back in the late 90’s when my wife and I decided to sell our first house, I came up with the great idea to do a FSBO and not hire a Realtor. It would be easy, I would get the price I wanted and save all that commission money. We had been through the process of buying our house so I thought I knew all I needed to know about it. Let’s just say it did not go exactly as planned.
To make a long story short, what came next is a couple of frustrating months of not being able to sell the house and dealing with all the things associated with selling a house. So after discovering that a FSBO was not the best idea for us, we hired a Realtor that had been helpful to us while we were trying to do it ourselves. He quickly got the house listed on the MLS, people started to show up for showings, and we closed on a deal quickly. It was so much nicer to not have to worry about all the details and to have an expert help us through the process. Yes, it cost us the commission money but we probably came out higher than we would have on our own and it was worth it to have a professional on our side.
Since I went through the process myself before I became a Realtor, I have decided that one of the things I will do in my business is focus on helping people who have chosen to try the FSBO route to sell their home. I hope I can bring some value to them to either get the home sold on their own, or they can choose to fully utilize all my services if they decide to hire a Realtor.
I think most sellers would be surprised at the number of things a Realtor has to do to get their home sold. A past president of the National Association of Realtors (NAR) testified before congress and gave a list of 184 things Realtors do to sell a home: http://ohiorealtors.org/consumers/184-tasks-agents-do-for-you/
Also, statistics published by the NAR consistently show that the average price that a FSBO sells for is 18% below the average price that homes listed with Realtors sell for. The main reasons for this are the fact that a Realtor is trained at pricing a home correctly and that Realtors have more experience on how to negotiate. Most FSBOs would be up against a professional on the other side who is working with the buyer when negotiating the price and other parts of the deal. The point of all this is that since it usually costs between 6-7% to hire a Realtor, a FSBO will most likely get at least 8% less in their bank account by not hiring a professional.
NAR statistics also show that only 8% of homes are sold as a FSBO. The fact is that it is harder to do than people think and eventually like I did, they come to this realization and finally hire a Realtor. Unfortunately by this time, they may have wasted a lot of time, effort and money trying to do it on their own.
This is from the NAR website that lists the FSBO statistics from 2015:
For Sale By Owner (FSBO) Statistics
FSBOs accounted for 8% of home sales in 2015. The typical FSBO home sold for $185,000 compared to $240,000 for agent-assisted home sales.
FSBO methods used to market home:
- Yard sign: 33%
- Friends, relatives, or neighbors: 21%
- Online classified advertisements: 10%
- Open house: 21%
- For-sale-by-owner websites: 7%
- Social networking websites (e.g. Facebook, Twitter, etc.): 9%
- Multiple Listing Service (MLS) website: 13%
- Print newspaper advertisement: 3%
- Direct mail (flyers, postcards, etc.): 2%
- Video: 1%
- None: Did not actively market home: 41%
Most difficult tasks for FSBO sellers:
- Getting the right price: 18%
- Preparing/fixing up home for sale: 13%
- Understanding and performing paperwork: 12%
- Selling within the planned length of time: 3%
- Having enough time to devote to all aspects of the sale: 3%