When selling their homes, the vast majority of homeowners choose a real estate agent to help them get the deal done.
Share of Homes Listed For Sale by Owner (FSBO) at Lowest Point in Decades
According to the National Association of REALTORS® (NAR) 2021 Profile of Home Buyers and Sellers, nine out of ten homeowners choose to work with a real estate agent when it’s time to sell.
Most of those one in ten sellers who choose to “go it alone without an agent representing them are simply selling their home to someone they already know.
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Lawrence Yun, Chief Economist with NAR, pointed out in a statement to Inman that agent expertise plays a big role in getting the best price on the home for the seller. Yun wrote, “There are many business models. However, consumers have increasingly valued and sought out the high-quality service, trusted expertise and ultimately the financial reward they’ve received when working with a Realtor.”
Reasons to Not Work with an Agent When Selling a Home
The one in ten sellers who attempt to see their homes themselves often do so because of socioeconomic and geographic factors.
According to research done by Zillow, nearly one in four homeowners with yearly household incomes of $50,000 or less chose to not use a listing agent.
Zillow determined that the rural-urban divide was a big factor in which homeowners would choose the FSBO or go-it-alone route. In its research, Zillow estimated that 7% of rural sellers chose to not work with an agent when selling compared to 5% of suburban sellers and 4% of urban/city sellers.
Black and Latino sellers were also less likely to choose to work with an agent than their Caucasian counterparts.
Sellers who indicated they were in no rush to sell their homes were much more likely to list their homes themselves without the help and expertise of an agent.
Advantages of Not Working with an Agent
For the .3 – .4% of FSBO sellers who sold their homes to someone they knew (family member/friend/neighbor), the seller typically received 100% of the asking price.
Also, these FSBO listings that sold to someone the owner knew typically spent less than a week on the for-sale market, according to NAR.
Advantages of Working with an Agent
Homes listed with an agent sell at a higher price than FSBO homes. Homes listed with an agent sell for a median price of $318,000, according to NAR. Homes listed by an owner “…go for less money than those listed by agents…” at a median price of $260,000.
NAR research analysts found that the typical FSBO seller across the country asked for -18% less than the median homeowner who worked with an agent. According to NAR, “FSBOs generally are not cheaper because the home is listed at a discount – rather, FSBOs are cheaper because they are more likely to be in inexpensive rural and/or remote areas that are generally smaller home types.”
(This corresponds with Zillow’s research that home sellers with yearly household incomes of $50,000 or less are more likely to become FSBO sellers than home sellers with annual household incomes of more than $50,000.)
Homeowners needing to sell their homes quickly chose to work with a real estate agent. Why? Homes listed with an agent typically sell faster than FSBO homes because of the agent’s market and regulations knowledge, the agent’s sales expertise, the agent’s full-service marketing systems, the agent’s real estate technology systems, and the agent’s full focus.
Thanks to Inman, National Association of REALTORS® and Zillow.
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