FSBOs Sell for Less

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Thinking about selling your home without using a Realtor? Just about every home seller thinks about it, if only fleetingly. While there used to be anecdotal evidence the For Sale By Owners were growing in popularity, the data do not support this contention. And in fact, with the real estate downturn, there are fewer FSBOs than ever. In California, the proportion of homes sold as a FSBO was three percent, according to the California Association of Realtors 2005 California Home Seller Survey.  "The annual rate of FSBOs, as a percentage of homes sold in California, has remained consistently at 3 percent," according to Robert A. Kleinhenz, Ph.D., CAR's deputy chief economist. The biggest problem areas for FSBOs were 'getting the right price', prepping the home for sale, and understanding and completing the paperwork. Those of course are the areas of expertise in which Realtors can excel in providing, and this is the line in the sand between an unrepresented seller and an agent-represented seller. According to the National Association of Realtors' recently released Public Awareness Campaign, public opinion regarding the country's Realtors is at an all-time high. Overall, the tracking survey found that a composite score of 19 beliefs and attitudes about Realtors increased 3 percentage points versus last year, from 56 percent to 59 percent. While the California real estate market is becoming more favorable to buyers, that's not sending jitters throught the FSBO community. FSBO proponents argue that in a slower market, people still want to save money, and there's an even greater incentive to cut selling costs when a property has declined in value. At least that's the theory. The market has indeed slowed from the record paces of 2004 and 2005, and the numbers of homes on the market has increased. While there are many motivations to sell your home, the FSBOs can generally be broken into two categories: those who are curious about what they can get and are testing the waters, and those who have to move and are trying to protect their appreciation 'earnings' and sell by themselves. Either way, in my experience, the FSBO is going to net less than by being represented by a Realtor. While every Realtor is going to tell that to a FSBO, the national and state statistics over many, many years have borne out the statement. Agent represented homes get between 8% and 12% more than unrepresented sellers based on median price comparisons. The National Association of Realtors in the 2005 sales data found that the median sales price of an agent-represented home was $230,000, versus $198,200 for a FSBO. That stat should end the discussion of selling your home on your own. Figure it our: that price difference is well above the cost of commission. If you have your home on the market as a For Sale By Owner, give me a call today. There is no need for you to net out less than you should.