Even in a mostly seller-driven market, few homeowners are completing a “for sale by owner” transaction. Instead, they’re turning to real estate agents for guidance.
The number of homeowners trying to sell their home by themselves over the past year fell to a record low—even as the housing market continued to see higher sales prices, quick home sales and, in some cases, multiple-offer situations.
For sale by owner transactions—better known as FSBOs—comprised just 7% of home sales the past year, the lowest on record, according to the National Association of REALTORS®’ newly released 2024 Profile of Home Buyers and Sellers. Meanwhile, 90% of home sellers sold their home with the assistance of a real estate agent, up slightly from 89% the previous year.
The FSBO market share has been gradually shrinking over the last 40 years, as technological advances have eased the real estate transaction process. Consider, in 1985, FSBO sales accounted for up to 21% of home sales. Since then, the FSBO share has decreased, staying mostly in the single digits since 2010.
“Even with the tremendous equity gains homeowners have had, no one wants to leave money on the table, and an agent can help determine the best-selling price and marketing strategy to find a qualified buyer,” says Jessica Lautz, NAR’s deputy chief economist. “Buying and selling a home is likely the largest financial transaction of one’s life, and sellers want to have professional representation in that process.
”FSBOs Find It’s Tough to Sell Solo
Home sellers who do sell on their own tend not to fare as well in the housing market as sellers represented by a real estate agent. FSBOs who sold over the past year generally sold for less; the median for all FSBO sales was $380,000, versus $435,000 for all agent-assisted sales, according to NAR’s data.
Nearly 40% of FSBOs said the main reason they sold on their own was to sell to a relative, friend or neighbor. But in those cases, FSBOs tended to fare even worse in the home sale, selling for a median of $345,000—nearly $100,000 less than those who sold using an agent.
FSBOs often find navigating the sales process alone isn’t easy. The top challenges FSBOs reported in the survey were getting their home price right, selling within the length of time they intended, and understanding and completing the required paperwork, according to NAR’s home buyer and seller survey.
More than half of FSBOs have called the selling process stressful—and 47% even said it brought them to tears at least at one point in the transaction, according to a separate study conducted by Clever Real Estate. While FSBOs responding to the Clever survey said they were driven by the desire for a quicker sale, an immediate need for cash or to save on paying an agent’s commission, they instead often found a lengthier sales process, a lower sales price and stress in navigating the transaction alone. Forty-three percent said home buyers tended to distrust them because they were not represented by an agent, and 40% reported struggling to understand the purchase contract, the Clever study also showed.
Why Sellers Are Turning to Agents
Home sellers responding to NAR’s 2024 Profile said they decided to use a real estate agent because they wanted to be able to market their home to a wider pool of buyers and price the home more competitively. Eighty-five percent of sellers said their real estate agent provided a “broad range of services” and managed most aspects of their home sale. What’s more, 87% of sellers said they’d likely recommend their agent for future services.
Source: National Association of REALTORS®’ 2024 Profile of Home Buyers and Sellers
Melissa Dittmann Tracey
Melissa Dittmann Tracey is a contributing editor for REALTOR® Magazine and editor of the Styled, Staged & Sold blog.
Content by Melissa Dittmann Tracey