FSBO Sellers May Have an Uphill Battle
“For Sale by Owner” (FSBO) enthusiasts certainly hoped that the ascendancy of the Internet would be just what the doctor ordered to catapult their endeavors—and why not? Once buyers were free to do their own searches on the web, the listing information that professional real estate companies had previously controlled would be available to all. But just as Wall Street’s Pet.com sputtered and burnt soon after takeoff, at this juncture, decades of results are in—and FSBO promoters would rather not discuss them.
In 1981, 15% of home sales were made as FSBOs—and by last November, they were circling the drain at 8%. Some of the reasons for the decline are open to argument—but others aren’t. Briefly, here are a few of the less debatable ones:
- In practice, the Internet’s preeminence has actually worked against the FSBO approach. The dizzying amount of information and marketing tools that rain down on any homeowner trying to blaze a trail through the cluttered wilderness of the web makes it increasingly obvious that the assistance of a professional guide has become increasingly necessary.
- Getting the asking price right is much more likely when an unbiased professional is there to contribute the latest research and recent market data—not to mention the advantage of having a licensed professional front and center, explaining the asking price’s value proposition to inquiring prospective buyers.
- Bottom line, research confirmed that last year, the median FSBO selling price was $217,900 vs. the agent-assisted median of $295,000. Considering that the FSBO sellers probably also had to pay the buyer’s agent’s commission from the proceeds, the economic advantage imagined accompanying the FSBO approach is, at best, dubious.
For today’s home sellers currently weighing the pros and cons of ‘going FSBO,’ there’s one other persuasive, verified fact: Over half of successful FSBO sellers already know their buyer before the sale began.
In other words, the 8% of successful FSBO sales might be more like 4% for homeowners who don’t have a friend or relative who’s already been eyeing their home for themselves. The long and short of it is that a hugely top-heavy percentage of successful home sales are made with the help and expertise of a real estate professional.