Posted in: Selling a home, Homeowner tips

Why do For Sale By Owner homes keep dwindling?

real estate agent showing a couple a home

Key insights

  • According to the National Association of REALTORS® (NAR), just 8 percent of sellers are listing their homes For Sale By Owner
  • As online home searching becomes the most prevalent way for buyers to find homes for sale, many sellers are realizing they need more digital power
  • Most sellers will earn more when using a Realtor to sell their home — even after taking into account the agent’s commission

The NAR’s 2016 stats show a clear trend: Fewer homeowners are selling their homes For Sale By Owner. In fact, in the organization’s 35 years of reporting these numbers, 2015 and 2016 showed the lowest number of FSBO sales, which now comprise just 8 percent of total home sales across America.

Here are some insights on why FSBOs are dwindling, and how home sellers can ensure they get the highest possible amount at closing.

Real estate is digital (and mobile)

Perusing homes for sale online is a hobby for many — and easy access to professional photography, listing details and home value estimates means that potential buyers are savvier than ever before.

As online home shopping rises, fewer buyers are finding their homes via “old-school methods.”

In fact:

  • 51 percent of buyers found the home they purchased online
  • 8 percent found it via a yard sign or open house sign
  • 1 percent found it from a newspaper or print ad

While it’s possible for a home seller to list their home directly on the MLS through a third-party vendor, only 13 percent of FSBO sellers take this route. Ten percent use online classifieds and 21 percent use online aggregators, meaning that buyers may only be able to find their homes online if they’re looking in the right places.

However, the most commonly used tactic for FSBO sellers is the yard sign at 33 percent —even though just 8 percent of buyers find their homes via this method.

As FSBO numbers drop and online home buyer habits rise, it’s possible that homeowners are avoiding the FSBO route because they can’t draw attention to their homes using offline tactics.

Challenging the commission dilemma

The number one reason that homeowners sell their home FSBO is to avoid the commission check they would pay a real estate agent; 61 percent of FSBO sellers who did not know their buyers personally said avoiding commission payment was their primary motivation for not hiring a Realtor.

But when you look at the numbers of how much an agent costs versus how much more money they bring to the average transaction, you’ll find that agents are well worth the cost at closing.

  • The median selling price of a FSBO in 2015 was $210,000; the median price of a FSBO in 2016 was $185,000
  • The median home sales price of an agent-assisted home sale earned $245,000 at closing in 2016

According to the NAR, FSBO sales prices dropped drastically between 2015 and 2016 —even as sales prices across the country saw a slight uptick.

In short, home sellers that used an agent earned 32 percent more at the closing table than those who sold FSBO. Even after a typical commission, agent-assisted sellers still took home plenty more than FSBO sellers at closing.

Ready to sell?

Even as the world becomes more techno-centric and filled with free information, determining the right selling price for a home requires a true expert analysis. A trusted, local Realtor can help you get the digital help you need and the final closing price you deserve. Call, email or chat today to get in touch with one of our 2,500 neighborhood experts.

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Status Definitions

For sale: Properties which are available for showings and purchase

Active contingent: Properties which are available for showing but are under contract with another buyer

Pending: Properties which are under contract with a buyer and are no longer available for showings

Sold: Properties on which the sale has closed.

Coming soon: Properties which will be on the market soon and are not available for showings.

Contingent and Pending statuses may not be available for all listings