OK, so for those who are not all that familiar with the real estate world, what on earth is FSBOing?? A FSBO (pronounced fizz-bo) is a For Sale By Owner–someone selling his or her home without the help of a real estate agent.
Selling your home on your own can be done, and I have known a few people who have had success with it. However, FSBOing can present MAJOR challenges. Oftentimes people assume selling the house by themselves will be easy, after all, how hard can it be, right?
Well, unfortunately, more often than not, sellers don’t realize how much is involved until they have had their house on the market for months, with no luck, or with contracts that have fallen through. This can lead to lots of wasted time, money and effort. Again, I’m not saying it will always be difficult. One friend sold her home in a matter of days without having to spend months advertising, holding open houses, etc. The thing is, that is not the norm. If it happens that way, great, but you must be prepared if the opposite occurs.
So today we are going to take a look at important points that people should be aware of before they decide on FSBOing.
Take a look at this:
Currently, 89% of people purchase their homes with the help of a real estate agent. Nine percent (9%) purchase from a FSBO. (If you are doing your math and are wondering about the extra 2%, that falls under a separate category–bank owned properties sold to institutional investors).
Just from these facts alone, FSBOs need to understand that almost 90% of the market is going to use an agent to make their purchase.
Now let’s understand where potential buyers are looking for properties. Ninety percent (yes 90%!) of all buyers use the internet in their searches. Only 28% of all buyers use print media.
These numbers speak for themselves. The internet is the place to be. If you are going to FSBO it, you must have an online presence. That’s where using an agent can really help you. Most real estate companies plaster their properties all over the internet, starting with their Multiple Listing Service (MLS) that reaches tons of agents who utilize the service every day when looking for properties for their buyers. Most companies these days also have their properties on Trulia, Zillow, Google, Realtor.com. etc., etc. Again, if you are not on the internet, chances are your house is going to sit for a while.
Looking back to the chart, we can see that the number of FSBOs has dropped in the last 20 years from 19% to 9%. That’s an interesting drop, and certainly one might venture to guess that the internet has played a part in that.
Finally, in a survey done by the National Association of Realtors, the average home sold (within the survey) by a real estate agent priced at $215,000 and the price by a FSBO was $174,900. The survey did state that FSBOs typically occur more often in markets where the asking prices are lower. However, these numbers do say a lot. Certainly we would need to account for the agents’ commissions, but even if you took out say 6% of the $215,000 sold price (there is no set commission in the world of real estate), the seller still would have sold his home for over $200,000.