"For Sale By Owner" sellers make WAY less
The Cost of Selling Without a Real Estate Agent
July 16, 2018
Research shows that FSBOs (For Sale By Owner) may spend a lot of time hustling to make the sale and end up selling for less than the market can bear.
How much less? How about enough to pay for a child's college expenses (depending, of course, on where they study)?
You’ve heard of buyer’s remorse; but without your market expertise and sales skills to back them up, sellers who choose to sell their home on their own just may experience “seller’s regret” when they see how much less they get for their properties.
FSBOs earn an average of $60,000 to $90,000 less on the sale of their home than sellers who work with a real estate agent, according to the National Association of REALTORS®.
Here’s the breakdown:
- All agent-assisted homes: $250,000 (median selling price)
- All FSBO homes: $190,000
- FSBO homes when buyer knew seller: $160,300
With this kind of discrepancy, why would any seller choose to go it alone?
Some may want to avoid paying an agent's commission—but even factoring that in, FSBOs still stand to make less on their home sale. “Talk to an agent and find out what they suggest for the commission, and then do the math yourself,” researchers write on NAR’s Economists’ Outlook blog. “The closing price for the agent-assisted seller is likely going to be way above a FSBO. [But] in reality, homes sold by the owner make less money overall.”
Homeowners seem to be hearing the message: Only 8 percent of sellers last year—an all-time low—chose to sell their home themselves, according to NAR’s 2017 Profile of Home Buyers and Sellers. That figure has been falling since 2004, when 14 percent of homeowners sold their own homes.
Of the share of FSBOs last year, 38 percent of the homes were sold to a buyer that the seller knew, such as a friend, neighbor, or family member. The majority of FSBO transactions, however, were sold to buyers the owner did not know.
Source: “Selling Your Home Solo to Save Money? You’ll Actually Make Less Than You Think,” National Association of REALTORS® Economists’ Outlook blog (July 9, 2018)