A for-sale-by-owner property or FSBO (pronounced “fisbo”) is a property the owners are trying to sell without the assistance of a licensed Realtor®. This means that the property is not listed with a real estate agent or broker. Therefore the FSBO will not be available for viewing on the local MLS (multiple listing system) by competing real estate investors and other buyers.
For-Sale-by-Owne r’s Decline
Homes sold without the help of a real estate professional dropped to a record low over the past year. According to the 2010 NAR Profile of Home Buyers and Sellers, unrepresented sellers made up only 11 percent of the market, down from 13 percent in 2009.
Owners who sell their home without the help of an agent usually sell to someone they already know. Factoring out those private sales, the actual number of homes sold on the open market without professional assistance was a record low 5 percent, compared to 10 percent in 2004.
FSBO selling results in less exposure than using a listing agent who has many tools and marketing strategies to help get the property known. FSBOs are likely to fly under the radar since the owner often does not properly make known their need or desire to sell. Limited resources sometimes create a problem here as well.
- There are many reasons why owners would choose to sell without the help of a licensed real estate agent.
- FSBOs may feel they cannot afford professional help
- They had a bad experience with an agent or broker in the past.
- The owner may be trying to avoid paying an agent’s sales commission that would be due after the sale has transpired.
Most Realtors® would point out that the commission is being paid by the seller and not by the buyer. This is somewhat of a misnomer as most owners listing property will “bump up” their asking price enough to cover the agent’s percentage. If the owners did sell the property without the assistance of a licensed agent they would not have the extra 6-7% commission (the national average) and could have a lower opening asking price. When all is said and done, it is the buyer who ends up paying for the agent’s services because they ultimately pay more for the property.
The current market’s complexities underscore the value that Realtors® bring to their clients. Talk to recent buyers and sellers in your community to find out what challenges they faced – whether qualifying for a loan, purchasing a foreclosed property, or trying to sell their home in a short sale. Interview Realtors® who can provide anecdotes about the obstacles their clients have encountered and how they helped them overcome these challenges.
Questions? We can help you, at County Properties, 24 years of brokerage experience, trust and a Member of the local Better Business Bureau! We offer free counseling in real estate regarding.
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