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Realtors Sell Houses For More Than FSBO’s

January 23, 2006

2005 NATIONAL ASSOCIATION OF REALTORS® Profile of Home Buyers and Sellers, based on more than 7,800 responses to a questionnaire mailed to a large national sample of consumers located through county deed records, is the latest in a series of surveys evaluating demographics, marketing, and other characteristics of home buyers and sellers. The For Sale By Owner Handbook: Fsbo Faqs: From Pricing Your Home Right And Increasing Its Curb Appeal To Negotiating The Contract And Hassle-free Closing

FSBOs or For Sale By Owners have downtrended since that market share experienced a cyclical peak of 18 percent in 1997. Only 13 percent of sellers conducted transactions without the assistance of a real estate professional in 2005, and 39 percent of those FSBO transactions were “closely held” between parties who knew each other in advance, up from 32 percent in 2004. The By Owner market share was at 14 percent in both 2003 and 2004. NAR began tracking the FSBO market in 1981; the record was 20 percent in 1987.

“In reality, the term ‘FSBO’ is a misnomer when used to broadly describe homes sold directly by owners,” Stevens says. “Since two out of five of these transactions are between related parties, and those properties are not placed on the open market, we believe that ‘unrepresented sellers’ would be a much more accurate term to describe this segment.”

The median home price for sellers who use a practitioner is 16.0 percent higher than a home sold directly by an owner ($230,000 vs. $198,200); there were no significant differences between the types of homes sold. “While many unrepresented sellers are motivated to save on paying a commission, we think the price difference speaks for itself,” Stevens says. “Owners without professional assistance also have problems in understanding and completing paperwork, prepping the home for sale, getting the right price, and selling within the time planned.”

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