A For Sale By Owner is a home that sold without an agent by the owner. A For Sale By Owner transaction might still involve an agent representing the buyer
FSBO is an acronym for For Sale By Owner. This is often pronounced as “Fizz-bo” and refers to most homes sold without an agent involved.
There are 420,000 FSBO transactions annually. These represent around $84B in total sales value.
Roughly 7% of homes are sold by owner. But they only represent ~5% of the total sales value of homes sold.
The average FSBO home sells for around $200,000.
Owners selling without agents forego the 2-3% listing commission they have to pay. Owners might also feel that they will put in more work than an agent would to sell the home. In other cases, an owner may simply be selling it to a relative or friend and doesn't require an agent.
Unlicensed individuals cannot post their property on agent-facing portals called the MLS. The owner will have to do all of the work of marketing and showing the home. It has also been shown that homes represented by agents sell for more. But that might be confusing causation and correlation. It’s possible that agents do not like to represent homes below $200K. Those homes can be hard to sell without renovations and pay a lower commission.
The total number of FSBO listings is often tracked to see how relevant agents are in real estate sales. FSBO listings are a lower percentage of total listings than they were twenty years ago. This indicates real estate agents remain very important in home sales.
FSBO listings are often a target of seller’s real estate agents looking for new clients. Many agents will reach out to these seller’s to offer their services. Typically, they will pitch how they can sell the home faster and for more money than their fees would cost.
For Sale by Owner transactions have been close to historical lows for a few years. And agents are involved in a higher percentage of home transactions than they were 40 years ago. In the 1980s, FSBO transactions accounted for closer to 15% of all home sales.