Orcas Island Real Estate MarketReal Estate April 7, 2021

HOW FSBO (FOR SALE BY OWNER), Even in Our Sellers’ Market Could Negatively Impact Your Sellers Net Proceeds

 

We’ve heard it over and over this past year, we are in a historic sellers’ market due to a shortage of real estate inventory paired with voracious buyer demand, the most memorable concept from ECON101, Supply and Demand.

Our feverish housing market may tempt some homeowners to try selling their house on their own (known as For Sale by Owner or FSBO) instead of working with a local real estate professional. When the inventory of homes for sale is as low as it is today, buyers are eager to snatch up virtually any house that comes to market. This makes it even more tempting to FSBO. As a result, some sellers think selling their house will be a breeze and see today’s market conditions as an opportunity to avoid commissions. Before you commit to going it on your own, let’s unpack why it could be a big mistake and how it may actually cost you more in the long run.

According to the PROFILE OF HOME BUYERS AND SELLERS,published by the National Association of Realtors (NAR), 41% of homeowners who attempt to sell as a FSBO did so to avoid paying commissions and/or fees. In reality, even in a sellers’ market, selling on your own likely means you’ll net a lower profit than when you sell with the help of a knowledgeable local agent.

The NAR report explains:

“FSBOs typically sell for less than the selling price of other homes; FSBO homes sold at a median of $217,900 in 2020 (up from $200,000 in 2019), and still far lower than the median selling price of all homes at $242,300. Agent-assisted homes sold for a median of $295,000. Sellers who began as a FSBO, then ended up working with an agent, received 98 percent of the asking price, but had to reduce their price the most before arriving at a final listing price.”

When the seller knew the buyer, that amount was even lower, coming in at $176,700 (See graph below):FSBO vs Agent Sale Price NAR Graph Wally Gudgell Group Windermere Real Estate Orcas Island Realty

 

 

 

 

 

 

 

 

LINK TO FULL NAR QUICK REAL ESTATE STATISTICS,
With A Market Overview, Home Buyer Statistics, Home Seller Statistics and FSBO Statistics:
https://www.nar.realtor/research-and-statistics/quick-real-estate-statistics

 

 

 

 

 

Referencing the above graph, that’s a whole lot of money to risk leaving on the table, and far more than what you’d save on commission or other fees. Despite the advantages sellers have in today’s real estate market, it’s still crucial to have the support of a trusted real estate expert as your guide through the sales process, especially in San Juan County. The San Juan Islands have unique market conditions and influences that make many Zillow Zestimates inaccurate due their inability to account for the differences and subtle nuances in properties here. Additionally, our county has atypical fees, requirements for sellers and buyers, and building codes and utility issues to contend with.  Local real estate professionals are trained negotiators with a myriad of housing market insights that average homeowners may never have. A local agent’s expertise can alleviate much of the stress of selling your house and help you close the best possible deal and walk away with the highest seller’s net proceeds.

The bottom line, if you’re ready to sell your home this year and you’re considering doing so on your own, be sure to think through that decision carefully. Odds are, you stand to gain the most by working with a knowledgeable, local and experienced real estate agent who specializes in the San Juans. If you’d like to discuss your options and/or learn your home’s true market value let’s connect and discuss how we can help you reach your real estate goals.

 

-Cheers to Sold,
Wally