Understanding FSBOs Using Data
This post is of particular import to agents since you will at some point in your career come in contact with For Sale By Owners in your market area. Whether it be at an open house, in your farmed neighborhood, or if you are looking to add them to your call list.
Going through the most recent NAR data report, we discovered some interesting findings related to the FSBOs and what trends are occurring. The following statistics are fantastic to get the conversation rolling with FSBO sellers; whether they are thinking about listing, have already listed or are getting to the point where they would like agent assistance.
One of the most important statistics to know is, only seven percent of recent home sales were FSBO sales this year. This is a decrease from last year and is the lowest share recorded since this report started in 1981. Even in a great, fast-moving, and strong sellers market, the percentage did not increase year over year.
What is interesting to note about where FSBO buyers come from, is that HALF the TIME the buyer is someone the seller already KNOWS; brother, cousin, co-worker, neighbor etc. So this means that a large proportion of FSBOs are successful because they already knew their buyer and that is why they decided on FSBO in the first place.
Let’s look at demographic now. The median age for FSBO sellers is 55 years old. 71% of FSBO sales were by married couples that have a median household income of $98,800. Based on this median age stat, we can make an assumption that these sellers have potentially sold a house in their lifetime and thus now the process to some extent.
Now this is where it gets interesting, FSBOs typically sell for less than the selling price of other homes; FSBO homes sold at a median of $200,000 last year compared to the median of agent-assisted homes at $264,900. Wow, what is that message? The average FSBO is a much different product than the agent-assisted sale. Share this with your next FSBO seller, the average FSBO house was 25% lower than the median priced home in any given market.
This is an opportunity to use in conversation with For Sale By Owner sellers. Have them recognize that the normal FSBO is targeting a whole different buyer altogether and is selling for much lower than other homes. 25% of FSBOs will list with an agent in the first 7 days of hitting the market. These are the folks who have tried to advertise on their own and then realized they needed a professional. So you should be on the phone within the FIRST SEVEN DAYS! Focus on the fresh launch of FSBOs.
These are great statistics to voice when in conversations with FSBOs. Remember, you are coming from a place of contribution. The success rate for these FSBO sellers is around 3% - 4% and the homes are selling for an average of 25% below the median priced home. The agent that will be listing that FSBO in the next week will be YOU!