Even though prices have risen as much as12 percent this year, more than any year since the end of the boom in 2007, sellers are not trying to sell their homes without the help of a real estate professional.
In 2008, as the last boom ended, “for sale by owner” transactions reached 13 percent of all sales as sellers sought to avoid the expense of paying a commission to a brokerage. As prices and sales plummeted, so did FSBOs, falling to 9 percent in 2010.
However, FSBOs haven’t budged from that level in 2013 despite the strongest prices, tightest inventories and healthiest demand if five years. One-third of those FSBO sellers probably would not have needed a professional to market their homes since they knew the buyer prior to the home purchase, according to the National Association of Realtors.
Also, many of today’s FSBOS didn’t do much to market their homes. One-third of FSBO sellers took no action to market their home, and 60 percent did not offer any incentives to attract buyers. FSBO homes in 2013 sold for $174,900 compared to $210,000 among agent-assisted home sales.
The fall in FSBOs comes even as sites like Zillow and ForSaleByOwner provide services to help sellers navigate the process on their own. Such sites offer up information on things like comparable sales and neighborhood data, enabling sellers to price and market their homes better. Sellers can also post photos and descriptions online, reaching exponentially more house hunters than they would have in the past.
ForSaleByOwner’s site has seen listings rise 14 percent in the past year, general manager Eddie Tyner told CNN Money. However, FSBO listings are widely considered good sources for leads by real estate agents.
“With the home inventory drying up, foreclosures have shrunk down now to about 34% less (October 2013 vs. October 2012) and the banks not releasing a lot of their REO’s into the market… what’s a hard-working, self-respecting REALTOR supposed to do (a) Get a part time job at McDonalds (b) Find a way to work with FSBOs?” writes Monument, CO Realtor Bart Wilson on the Active Rain web site.