Home sellers that sold their home “For Sale By Owner”, otherwise known as a FSBO (pronounced fiz-bo), did so for less money and with more headaches than home sellers who listed their home with a real estate agent, according to the National Association of REALTORS® (NAR) 2012 Profile of Home Buyers and Sellers.
While a study isn’t required to understand that the biggest reason a home seller wouldn’t want to seek the services of a real estate agent is to save money by not paying a commission, NAR found that this was the motivator for 43% of all FSBOs. Other reasons for selling a home by owner that NAR found were the seller knew the buyer (20%) and the buyer contacted the seller directly (15%).
But NAR data demonstrates that the benefits of using an agent outweigh the disadvantages, especially for the wallet.
The median selling price for all home sellers was $210,000 in 2012, according to NAR. The median selling price for all FSBOs was $174,900 , while the median selling price for all agent assisted sales was $215,000. When one considers the fact that a 6% commission on a $215,000 sale is $12,900, it is not completely unreasonable to assume that a home seller could potentially put more money in their pocket―even after paying a commission.
NAR also found that the median sales price for those who sold their home while listed with an agent after trying to sell their home themselves was $175,000. So if a homeowner is thinking about selling of their homes themselves to see if they get any bites before listing with an agent, it may prove to be a costly strategy.
FSBO home sellers faced other challenges as well. The NAR study found that 18% of FSBOs had a hard time with the paperwork; 14% had difficulty getting the price right; 11% had difficulty preparing a home for sale; and 6% of FSBOs had a hard time helping a buyer obtain financing, attracting potential buyers, and selling their home within the planned time frame. All of these challenges are easily handled by the pros.
The data for the Profile of Home Buyers and Sellers was obtained through a survey sent randomly to 93,502 home buyers who purchase their home between June 2011 and June 2012. Information about sellers came from home buyers who also sold a home.
If you are planning on buying or selling a home in the Pioneer Valley, make your first call to Michael Seward at 413-531-7129 or email firstname.lastname@example.org.