Are FSBOs Fizzling?

Just a few years ago, up to 15 percent of all homes were sold without the involvement of a real estate agent,because sellers simply wanted to pocket all of the proceeds from the home themselves, and avoid paying a sales commission. In many cases, owners who sell their own homes are doing business with someone they know – a friend, a relative or a neighbor.

Since they know their customer, the seller doesn’t have a need for marketing, doesn’t have the home on the market for very long, and typically gets all of their asking price, because that price was typically agreed to even before the home was put up for sale. It’s no wonder then that about half of the so-called “For Sale By Owner” homes, or “FSBO-s” as they are known in the real estate business, are sold to customers who know the owner personally.

So why, then, has the share of FSBOs among all home sales fallen from 14% to 9% over the past few years? Well, in part, because it’s a cold world out there – Homes are more challenging to sell these days, period, and some people who otherwise might give it a go by themselves are wisely looking for help from real estate professionals. More owners have figured out they really CAN make more money by working with a REALTOR®, even though they are paying a commission.

This is especially true when times are tough and home sales are down. Owners simply do not have the resources, knowledge of the market or sales experience that REALTORS® do, so when they try to sell their property against homes being marketed by seasoned professionals, it’s not even really a fair fight. REALTORS® know how to stage homes to present them in their best light. They have experience writing and placing ads that maximize results. And most importantly, they know how to properly price homes to sell.

The 2010 NATIONAL ASSOCIATION OF REALTORS® Profile of Home Buyers and Sellers actually reports that FSBO homes actually sell faster and more frequently for their asking price than homes sold through an agent. Yes, you heard that right. But – owners who sell through an agent make more money, because their selling prices are typically higher.

Remember – that half of FSBO homes are sold to friends and family. And when you’re selling to loved ones, as often as not, you’re selling your home for less than you could be on the less-personal open market.
What else do REALTORS® have that FSBO sellers do not? How about a built-in customer base?

Remember – REALTORS® not only represent sellers, but people looking to buy homes as well. The ability to network, not only with customers, but also other REALTORS® and their clients, simply cannot be matched by someone trying to go it alone.

Now, one might argue that the internet has changed everything – and yes, it’s true that buyers can see plenty of homes online, get pricing information and even take virtual tours. But if everyone is listing online – and everyone should be – that doesn’t really tilt the playing field in the FSBO seller’s favor, now does it?

In the end, it’s the personal touch that makes the biggest difference. REALTORS® know how to negotiate better sales prices. When problems crop up during the closing process – as they often do – REALTORS® know how to deal with them. And let’s face it – time is money. Even if you could solve those problems, what are the chances you could do it as quickly and efficiently as a REALTOR®? Not great, you can be sure.
We’re all about do-it-yourself projects here on Real Estate Today, but selling your own home isn’t one of them! **

** from article For Sale By Owner - http://www.retradio.com/shows/2011/08/12/for-sale-by-owner-2/