FSBO by the Numbers
Choosing the For Sale By Owner (FSBO) path to avoid commission fees might seem like a good option, but statistics show that this route often results in a lower final sale price. According to the National Association of REALTORS® (NAR), FSBO homes typically sell for 5-7% less than agent-assisted sales.
Additionally, FSBO sales make up only 7-8% of all home sales, and this number has been steadily declining over the years. What’s more, nearly 90% of FSBO sellers eventually hire a real estate agent before closing the deal due to the complexities involved in legal paperwork, negotiations, and marketing.
Which FSBOs Have the Best Chance for Success?
While selling FSBO can be challenging, some situations have a higher likelihood of success:
- Selling to Family or Friends: FSBO transactions where the buyer and seller know each other (family members or friends) make up about 50% of all FSBO sales. In these cases, there’s less need for marketing, and negotiations are often simpler.
- Simpler, Lower-Value Properties: Homes that are easier to price and sell, such as small single-family homes or condos in high-demand areas, tend to fare better in FSBO transactions. However, even these sales can face challenges if the seller is unfamiliar with legal requirements.
For most homeowners, especially those selling in competitive markets, working with a real estate professional helps ensure a smoother transaction and often leads to a higher sale price.
Advantages and Disadvantages of FSBO
Advantages
- No Commission Fees: You save on the typical 5-6% real estate agent commission, allowing you to keep more profit from the sale.
- Full Control: You maintain complete control over the pricing, marketing, showings, and negotiation processes.
- Direct Communication: You communicate directly with potential buyers, which can speed up decision-making and negotiations.
Disadvantages
- Lower Sale Price: FSBO homes typically sell for 5-7% less than agent-assisted homes, which could offset the savings on commission.
- Time-Consuming: Selling your home without an agent requires significant time to manage marketing, showings, and paperwork.
- Limited Market Exposure: Without access to the MLS, your home may not reach as many buyers, limiting your pool of potential offers.
- Legal and Contractual Risks: Navigating real estate contracts and legal issues without professional guidance can lead to costly mistakes.