The for-sale-by-owner (FSBO) market is one of untapped potential, like an oil reserve that real estate agents haven’t quite reached yet. After all, these are consumers who are looking to sell their homes, but are not seeking the expertise of agents to do so – but how, it’s fair to ask, can agents attract FSBO home sellers? In our final story on NAR’s 2012 Profile of Home Buyers and Sellers, we look at what the survey found about the FSBO market, and what it suggests for real estate agents.
Profile of Home Buyers And Sellers & FSBO Home Sellers
We should be clear that FSBO home sellers do make up a relatively small share of the market, and their market share has declined in recent years. In 2012, FSBO home sellers made up 9 percent of all sales, down from 10 percent in the last Profile of Home Buyers and Sellers and 18 percent in 1997.
But still, “only” 9 percent of existing-home sales still accounts for a big chunk of people. By 2012’s end, NAR is expecting existing-home sales to reach 4.79 million, and 9 percent of that represents more than 431,000 transactions.
So what are the characteristics of this demographic? NAR found that:
- Thirty-three percent of FSBO home sellers knew the buyer prior to the closing.
- Among the FSBO home sellers who did not know the buyer, though, their reasons varied for why they opted not to choose an agent.
- Forty-three percent said they did not want to pay a commission; 25 percent sold their property to a relative, friend or neighbor; and for 15 percent, the buyer contacted them directly.
- Nearly one-third of FSBO home sellers, NAR found, did no marketing for their property, and 60 percent offered no incentives to prospective homebuyers – and a correlation may exist because of those stats. The average sale price of a FSBO property was $174,900, compared to $215,000 for an agent-listed residence.
So, how can agents go about showing FSBO home sellers the value of their services? Sarah Coulter, an @properties agent based in Lincoln Park, said that it can be tricky communicating with them, especially regarding what is required to sell a home in today’s real estate market.
“Marketing a home for sale is a full time job; if you miss a showing or are not aware of how the home is positioned in the current and rapidly changing market, you could lose a potential buyer and in turn more money than what you save by not paying a commission,” Coulter said. “Now that most information is available online it gets a little more difficult, because seller’s think they have all of the information/knowledge that agents have; but, the fact is most individuals have sold one-three houses in their lifetime, while agents have sold 10-20 times that many or even more, so considering the wealth of experience gained from each transaction working with an agent the better choice.”