Posted in Economist Commentaries, by Amanda Riggs on November 17, 2016
The numbers are in for 2016—selling your home with a REALTOR® could get you $60,000 more on your home sale. From the recently released 35th anniversary edition of the Profile of Home Buyers and Sellers report, homes sold with an agent or broker received a median of $245,000 in 2016 compared to the median selling price of $185,000 for For-Sale-By-Owner (FSBO) home sales.
That number drops even lower to $168,300 when the FSBO seller knew the buyer, that’s $76,700 less than what sellers are getting with the help of a REALTOR®.
The top reasons that sellers decided to sell their homes without the assistance of a Realtor was that they did not want to pay a commission or fee (39 percent), they sold to a relative, friend or neighbor (33 percent), or the buyers contacted the seller directly (14 percent). Of the FSBO sellers that did not know the buyer, 61 percent (up from 59 percent last year) simply did not want to pay a commission or fee. Not only are FSBO sellers losing money in the transaction, they end up doing all the work.
The 2016 Profile of Home Buyers and Sellers report draws on 35 years’ worth of reliable data on FSBOs.
In 1981, the market share of FSBO sales was 15 percent and those that sold with the assistance of an agent was 85 percent. FSBO sales peaked in 1985 at 21 percent of all sales (in the same year 75 percent were agent-assisted sales).
Since 1981, FSBO sales have steadily declined over the last three and a half decades, dropping below double digits by 2010 to just nine percent of all sales.
This year, the demographics of FSBO and agent-assisted sellers were very similar, despite the large gap in between the final home sale price.
Seventy-three percent of FSBO sellers were married couples with a median age of 59 years and a median income of $100,600.
Seventy-six percent of agent-assisted sellers were also married couples, 53 years old, and had a median income of $101,300.
Last year, FSBO sellers typically had lower incomes than those who worked with an agent. No wonder, eh?