Hey, welcome back to How’s The Market for December 2019. We create this monthly show in collaboration with our friends at Keeping Current Matters to keep you your team, your office informed about the market conditions, so in turn you can educate your clients and maintain a positive momentum in your local marketplace.
Now here’s what we’re at today. You of course notice in the first time in move up markets, there is very few listings available. Yet buyer demand is increasing every single day and as a result, something has happened that hasn’t happened in a decade and guess what it is?
I’m going to tell you, the National Association of Realtors reported that for the first time in 10 years, the number of homeowners who, get this, are trying to sell on their own, yes, I’m talking about FSBO, for sale by owners. The percentages is ticking up year over year per NAR statistics.
Here’s why I think that’s somewhat alarming. The people that are trying to go FSBO, are actually the younger generation. Get this, write it down, 36% are millennials. 26% are Gen Xers trying to sell on their own. Versus 22% baby boomers, maybe DIYers, been there, done that. And 19% the generation above them.
In my opinion, here’s what needs to happen next. These people are going to need to understand that going FSBO. Yes, even in the day and age of this, still is not a good idea. The good news is we’ve got statistical support that’ll actually validate your position. It’s your job to begin creating content and informing consumers in your farm, in your sphere, that they do not want to make this mistake.
According to the Consumer Housing Trends report of the people that wanted to go and sell their house, 36% of them attempted to sell it on their own first. What we both know is only 11% of the homes are actually sold without an agent involved.
It’s easy to try, especially with today, the number of portals and websites and everything else, and you and I both know it’s very difficult to actually pull it off. The statistics behind the study of collateral analytics makes an even stronger case for not trying in the first place.
See, hitting people right where it matters most is the key. And guess what, that is in the actual home sales price. Their research says that for sale by owners result in prices significantly lower than those from similar properties using an agent inside the MLS. The average sales price of a for sale by owner was nearly 6% lower than similar properties listed and sold by you and your fellow professionals.
Here are three key reasons why we believe that’s happening. Number one is FSBO buyers, not sellers, buyers, are looking for a discount. We know that’s their mindset.
Two, FSBOs are often not staged, so they don’t show as well as they could. And we both know the trend we’re seeing today with staging and the impact that’s having on getting homes sold.
Number three, FSBOs receive far less exposure than homes listed by an agent. And we both know less exposure means less demand, while more exposure translates to more people seeing the house, potentially falling in love with it, making an offer, and if you’re in the right market and the right price point, a bidding war.
What’s interesting is that that statistic that FSBOs sell for 6% less than homes represented by agents. Think about why that’s interesting. You and I both know, it’s exactly the same standard commission rate. So at the end of the day, FSBOs are dealing with all of the stress, all of the hassle, all the showings, all the paperwork, and then putting up with all of this risk for essentially no additional benefit.
Their net outcome is the same with or without an agent. So you and I both know why not use one. Those three alone are really strong support for why consumers shouldn’t forgo the services of a real estate professional like you.
I’ve got even more ammunition for you to use to combat this clear growing trend. Let’s take a look at the seven reasons not to sell your home as a for sale by owner that you can in turn share with your sphere, create videos about, use inside your farm, and just educate people, if you call them over the phone or knock on their door.