Saturday, May 06, 2006

The Truth about FSBOs

I've heard many agents talk about For Sale by Owner Listings (FSBOs) lately, and many are worrying that the rise in availability of information directly to consumers will increase the number of FSBOs.

This couldn't be further from the truth, and research supports this.

In 1991, before homes and other real estate-related information started appearing on the Internet, for sale by owner transactions made up approximately 19% of the market. In 2005, after almost 10 years of having homes for sale on the Internet and consumers more empowered with information than ever, FSBO transactions made up 13% of the market.

At a time when consumers were empowered with more and more information, the volume of FSBOs actually decreased by 46% - almost cut in half!

It could be that many consumers realize that they can actually earn more money by working with a Realtor, as recent data suggests. But I also think consumers just don't have the time or expertise to market a home themselves, let alone get the highest possible price, and smart consumers (empowered with more information) increasingly know this.

Only real estate agents have the market knowledge and experience to price a home correctly given real-time conditions, but also effectively market that home to interested buyers. Real estate agents bring to the table a wealth of local knowledge, marketing strategies and advantages that individual home sellers simply don't have on their own, and increasingly don't care to take on themselves anyway.

As the data suggests, working with a real estate agent to sell your home simply makes financial sense, and also makes the entire transaction faster, easier and far less stressful.