If you’re trying the “For Sale By Owner” (also known as FSBO/fizbo) approach to selling and your home has been on the market for more than two weeks, it might be time to consider a new tactic. Let me tell you why.
The odds are against FSBO: According to the National Association of Realtors®, in 2018 fizbo sales accounted for just seven percent of all home sales, the lowest percent on record. In other words, 93 percent of successful home sales last year were not conducted by homeowners themselves.
After 14 days FSBO odds worsen: Seventy-three percent of FSBO homes sold in less than two weeks. Sounds great, but in many cases this is simply because fizbo homes were sold to someone the seller already knew. So if your home hasn’t sold to a friend, neighbor, co-worker or family member within the first 14 days, statistics suggest a successful FSBO sale becomes even more unlikely.
FSBO properties typically sell for less: In 2018 FSBO homes sold at a median closed price of $200,000. That’s signiﬁcantly lower than the median $264,900 earned by agent-assisted sales.
Home sellers typically try FSBO because they want to maximize profits by avoiding the commission a brokerage would earn for successfully selling the home. But data suggest it doesn’t generally work out that way.
FSBO sellers commonly end up paying a commission anyway, to a buyer’s agent who brings a client. Eighty-seven percent of buyers in 2018 purchased their home through a real estate agent or broker. Makes sense… why would buyers choose to make one of life’s biggest purchases without an experienced professional serving to protect their best interests and negotiate the best price, when that service doesn’t cost buyers a dime?
Also, the stats suggest that FSBO sellers still make less money, even if they manage to avoid paying any commission.
Take the median closed price for agent assisted sales, $264,900, subtract an estimated six percent commission ($15,894, which is typically split between two brokerages), and you end up with a net of $249,006. That’s still $49,006 (20 percent) more than the typical FSBO closed price, even after factoring for commissions.
That’s a general analysis, results may vary, but keep in mind that FSBO sellers always assume full responsibility for:
- properly pricing and effectively photographing and marketing the property
- staging the home’s interior and exterior for maximum appeal
- making time for every call and showing (no matter how inconvenient), for both legitimate prospects and “Lookie Lous”
- negotiation, which often includes arranging and paying for agreed repairs, or lowering the sale price
- coordinating home appraisal, praying the “price is right,” and dealing with it if it’s not
- facilitating home inspection (precarious for FSBO sellers because they’re not insulated by representation)
- the proper completion of numerous legally binding contracts and documents
The FSBO seller will also be responsible for complying with all closing regulations and requirements once an offer is accepted, as well as legal liability for any errors, misrepresentations or omissions.
In other words, evidence suggests that FSBO sellers assume a lot of extra work and legal liability, and typically make $49,000 less in median sales prices when they don’t use listing agents.
None of these observation are a knock against FSBO sellers. There are many valid reasons real estate professionals sell more homes and earn higher prices. For example:
Accurate home valuation: Home valuation is exceptionally challenging in New England, where homes built and added onto since the 1700s can neighbor ones constructed in the 21st Century. In the Lakes Region, land quality, view and value can vary dramatically between the subject property and a comparable down the street.
Valuation is even harder for homeowners, who may instinctively add sentimental value, and who have limited experience compounded by lack of access to the full range of comparable property sales data (and therefore overreliance on town tax assessments or free online value estimates from Redfin, Zillow or Homes.com, which have been proven to be wrong 36 to 84 percent of the time).
Access to technology: FSBO listings often feature amateur photos that look like they were taken with a smart phone or basic camera. At Roche Realty Group we take thousands of property photos each year and use a variety of DSLR (digital single-lens reflex) cameras to take high dynamic range photos, which offer vastly improved image quality. Homes with professional-quality DSLR photography are more likely to sell within six months than homes with “point-and-shoot” photos.
Additionally, we have the capacity to offer Matterport® Photography with “3D Showcase,” an immersive online 3D experience that gives buyers a true feeling for your property before they ever see it in person. It’s like “Google Street View” for your home.
Finally, our agency possesses “drone” aerial video and photo technology. We leverage this imagery when properties have acreage that would be difficult to portray from the ground level, and/or to show select properties in context of their Lakes Region locations (visit LakesRegionHomeSeller.com/marketing-your-property for examples).
Improved internet presence: For the third year in a row, a whopping 95 percent of buyers used the internet during the home search process, and 50 percent found the home they purchased, via online search.
Most FSBO homes suffer extremely limited internet visibility. On the other hand, as a Realtor®, as soon as I enter a listing into the MLS (which is THE critical online tool), I can immediately share that listing with countless buyers on Zillow, Trulia, RealEstate.com, Realtor.com, Homes.com, Homesnap.com, Realtors Property Resource, and ListHub.
Roche Realty Group also advertises listings on about 80 real estate websites, including LuxuryHomes.com, Homes & Land, Lakehouse.com, World Property Journal, GolfHomes.com, Luxury Real Estate, and Boston.com (the Boston Globe site).
Further, RocheRealty.com is one of the Lakes Regions’ most visited websites, and nearly six hundred of our optimized key search phrases appear on page one in Google search results (for topics including Lakes Region communities and New Hampshire lakes, towns and islands).
The bottom line is that if you’re trying the For Sale By Owner sales route and your home’s been on the market for more than two weeks, it might be time to increase your odds of selling and maximizing your sales price by hiring an experienced Realtor® who can offer professional-grade valuation, imagery, print and digital marketing, and salesmanship. Give me a call. I’m here to help, and it won’t cost you anything unless the home sells.