To save money, about 50% of homeowners sell their homes without hiring professional real estate agents. Around 30% of home sellers find buyer’s agent commission to be an unnecessary expense, while 14% have a deep distrust of them.
What’s Better: Realtor Home Sales or For Sale By Owner?
Research conducted by the National Association of Realtors shows that 8% of houses sold as FSBOs in 2020. The number of agent-free home sales has been in decline since 1985. These sales were extremely popular 35 years ago.
According to the statistics, roughly 20% of properties were sold without real estate agents that year. This number has continuously been decreasing since then. As a result, less than 10 percent of properties in the United States are now sold without a real estate agent.
That’s not to say for sale by owner (FSBO) sales are decreasing by the same token. What’s more, FSBO sellers are on the rise in many countries. This doesn’t mean all the potential buyers find selling FSBO the best option for them.
Is Hiring a Real Estate Agent Worth It?
Why sell with a real estate agent? Well, most people use an agent since FSBO requires a lot of energy and time. Time limitation is the major reason why homeowners decide to work with agents or realtors.
That’s why they avoid going the solo route. Real estate agents sell for a living and can save you the hassle of:
- Researching the market
- Hosting and planning open houses
- Qualifying potential buyers
- Giving tours to buyers
- Setting up showings
- Handling phone calls, etc.
Research suggests that 21% of sellers hire realtors to help them with marketing, 18% with setting a competitive sale price, 20% with selling the house within a set time frame, 15% with finding prospective buyers, and 6% with dealing and negotiating with buyers.
However, the Redfin survey revealed that around 20% of sellers don’t use full-service agents. While some sellers work with realtors to some extent, they don’t pay a typical agent commission. To avoid commissions, 15% of owners use new deals when hiring an estate agent.
What is FSBO?
Let’s shed some light on the FSBO to help you get a better understanding of these deals before listing your home. In brief, for sale by owner means selling a home without an agent. As the name suggests, homeowners handle this process on their own.
When marketing their home, sellers use different FSBO methods. These methods are listed below in no particular order:
- Open house (11 percent)
- Social media advertisements (14 percent)
- Online classified ads (5 percent)
- Relatives, friends, or neighbors (22 percent)
- Yard sign (25 percent)
- Direct mail (1 percent)
- Print newspaper ads (1 percent)
- Video marketing (2 percent)
- Through MLS websites (6 percent)
It is estimated that approximately 46% of sellers use no FSBO methods. They don’t actively market their homes.
FSBO sales bring in less money and take longer than sales that involve a real estate agent. If you are not ready to tackle the sale yourself or you are too busy, an agent can save you a lot of headaches and time.
Furthermore, many owners (about 40%) who sell through FSBO do it to avoid paying commission. Most FSBO sellers are still required to pay real estate commission, though. They typically pay 3 percent in commission.
As it turned out, 15% of people who sell a property themselves have a hard time determining the right selling price. The NAR stats show that the median price of houses sold by agents is roughly $60,000 higher than the average FSBO home price.
About 13% of FSBO sellers can’t sell the property quickly, while 12% are not able to understand and complete paperwork themselves. Besides, 9% of sellers have difficulty preparing the home for sale.
Why Choose FSBO Rather Than Selling With an Agent?
As you can see, FSBO doesn’t work for everyone and in every situation. Nevertheless, many sellers choose it over agent-involved sales since it still offers a lot of benefits. Listed below are the three main advantages of for sale by owner:
- Making more money from the sale – While FSBO doesn’t always provide as much financial benefit as the sellers imagine, it often gets them more profit on their homes by eliminating hefty commission fees.
- Having full control over the sales process – FSBO allows sellers to decide on how they will negotiate, price, and market the property. They can make any other decisions without listening to the agent’s opinions. It’s a double-edged sword. While FSBO enables you to be your own boss, you lose the valuable expertise and assistance of professionals.
- Devoting full attention to the home sale – It is not uncommon for agents to have several clients at a time. That’s why they don’t devote much of their time to every client sometimes. If you have a lot of free time to qualify buyers and talk to them frequently besides marketing your house extensively, you can do it yourself through FSBO.
The Bottom Line
Now that you know more about FSBO stats and facts, you can make an informed decision on whether it’s right for you or it’s better to opt for an agent-involved sale. Your decision will depend greatly on your time, money, expertise, and resources available.
There are some great perks of FSBO sales. In addition to pocketing extra cash, the sellers have more control when selling a home themselves. On the other hand, sellers who have trouble marketing and selling a house on their own use real estate agents.
Some sellers hire attorneys specializing in the real estate market instead of using agents to help them with legal documents. It makes sense to hire a lawyer when the seller and buyer know each other and agree on terms before the home is listed for sale.
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