Twin Cities Real Estate News

Real estate transactions are increasingly complex these days, especially in relation to short sales and constantly changing mortgage lending rules.  Setting a fair price today is also particularly challenging, as markets correct themselves amid fluctuating factors.

So it's no surprise that fewer sellers are choosing the For Sale By Owner (FSBO) route.  But the numbers started dwindling two decades ago, even before the wave of defaults and falling values.  In 1991, one in five sellers were By Owner, but in 2010, only one in ten did not enlist a real estate agent to sell their home.

It's revealing that in 2010, 50% of FSBO transactions involved sellers who knew their buyers upfront.  Unless a seller already has a buyer lined up, it's evidently much less likely they would attempt such a complex process on their own.

Then there's the question of sales prices.  On average, a home marketed and sold through the representation of a real estate professional fetched $199,300 versus just $140,000 for a FSBO sale.  Those who try to sell By Owner won't pocket that 5%-6% commission they think they'll save, especially considering all the hard work and potential liabilities.

And when it comes to offers, buyers of FSBO listings are also eyeing that same percentage, and in today's market, buyers usually win with a price reduction far greater than the cost of representation.