Call Us Today! (916) 203-9690 |

For Fail By Owner – Why FSBOs don’t work

For Sale by OwnerThere’s a simple question I like to ask anyone who is thinking of selling their own home instead of using a real estate agent: “What is it you DON’T know about selling homes?”

That question is usually met with head scratching, a blank stare, or a little stuttering before they usually reply, “I don’t know!”

It’s a rhetorical question that’s impossible to answer, but it really does get to the heart of the matter – For Sale By Owner is one of the most unwise and short sighted financial decisions you could ever make. Of course estate agents (like myself) will urge people to use a Realtor since they have a vested interest in getting more business, so let’s look at the facts and data to make this argument:

Here are 20 facts about homebuyers and sellers with the use of Realtors, and those who choose to list their homes For Sale By Owner:

1. 87% of buyers now purchase their home through a real estate agent or broker.

2.  That’s up significantly from the 69% of buyers who used a real estate agent of broker in 2001.

3.  The buyer doesn’t pay a commission so why wouldn’t they? In fact, there are some purchases between family members, divorcing spouses, direct from the builder and also company relocation sales that make up a small percentage of sales.

4. When searching for a home, buyers used these information sources:

  • Real estate agent: 87%
  • Yard sign: 51%
  • Mobile of tablet website or application: 57%
  • Open house: 48%
  • Mobile or tablet search engine: 54%
  • Print newspaper advertisement: 20%

5. Likewise, 89% of sellers enlisted the help of a real estate agent to sell their home.

6. For Sale By Owner (FSBO) accounted for 8% of all home sales in 2014.

7. The average FSBO sold for $210,000.

8. Meanwhile, the average home listed with a real estate agent sold for $249,000.

9. That’s a difference of $39,000 – or 15.6% in sale price – when listing with a Realtor.

10. The only reason I could ever imagine homeowners would consider FSBO is to save money (of course). A typical full real estate commission is 6%, with 3% going to the buyer’s agent and 3% paid to the seller.

11. When listing FSBO, homeowners still need to pay a buyer’s commission of 3% (or else no realtors will ever show the home or do business with the owner), so FSBO are essentially just trying to save 3% of the sale price.

12. If the average FSBO sells for $210,000, they would net (discounting all other factors, taxes, fees, etc.):


  • $6,300 (3% paid to buyer’s agent)

= $203,700

Now let’s look at the average home sold with a Realtor.

If the average realtor-listed home sells for $249,000, they would net (discounting all other factors, taxes, fees, etc.):


  • $ 7,470 (3% paid to buyer’s agent)
  • $ 7,470 (3% paid to listing agent)

= $234,060

13. That means that even after paying a full commission to both agents, homeowners who sell with Realtors net 14.9% more profit.

14. Time was also not on the side of FSBOs, considering that:

Average time to sell for FSBO: 88 days

Average time to sell for listings with a Realtor: 69 days

15. So working with a Realtor saves at least 19 days, which is 22% longer on average, in an industry when time is definitely of the essence during finite hot-selling seasons of summer.

16. Additionally, 20% of FSBOs end up relisting on the MLS after the do not sell, creating a lot more work and time delays.

17. How did FSBOs market their home?

Not very well, judging by these statistics:

  • Yard sign: 42%
  • Friends, relatives, or neighbors: 32%
  • Online classified advertisements: 14%
  • Open house: 14%
  • For-sale-by-owner websites: 15%
  • Social networking websites (e.g. Facebook, Twitter, etc.): 15%
  • Multiple Listing Service (MLS) website: 10%
  • Print newspaper advertisement: 3%
  • Direct mail (flyers, postcards, etc.): 3%
  • Video: 2%
  • Other: 1%
  • None: Did not actively market home: 25%

18. What were the biggest challenges FSBOs reported?

  • Understanding and performing paperwork: 12%
  • Getting the right price: 6%
  • Preparing/fixing up home for sale: 6%
  • Selling within the planned length of time: 18%
  • Having enough time to devote to all aspects of the sale: 6%

19. A recent survey found that FSBOs reported having 70% more stress during a transaction than those who sold with a Realtor.

20. The contracts, disclosures, documents, timelines, procedures, etc. necessary to sell a home sometimes reach hundreds of pages, and you can’t just skip them because you’re unfamiliar or selling a home yourself.

Additionally, there is the potential for HUGE liability issues with every single real estate transaction. People do end up getting sued and in court all the time when they don’t properly disclose material facts about their house, their neighborhood, etc. A seller essentially magnifies their liability when they represent themselves in the sale of their own home (talk about a conflict of interest!) and the buyer is spending hundreds of thousands of dollars based on the

There are even things you can’t say as a Realtor that extend to a homeowner when they decide to try and sell their own home, like Fair Housing Laws that curb discrimination, steering, redlining, and other practices. If you don’t know exactly what you can and can’t say – or even write in your ads for your home – you could be violating federal laws.

In summation, if you want to:

Sell your home for 15% less money

Net 14.9% less money in your pocket

Stress 70% more while working harder and taking more time

Take 22% longer to sell

And create a mountain of liability and potential to be sued,

then please go ahead and list your home For Sale By Owner!