The National Association of REALTORS® (“NAR”) has released its “2009 Profile of Buyers and Sellers,” an annual study based on a survey of recent home buyers (including buyers who also sold a home) during the 12 months ending June 2009. Once again NAR has under-reported the size of the ‘for sale by owner’ segment of the real estate market, claiming that only 11% of home sales were FSBO, down from 13% the previous year. This is only half of the real FSBO story.
The fact is that in 2009, the FSBO segment was 22% of home sales (equal to 2008) and NAR’s data confirm this finding. NAR fails to include the additional 11% of sellers in 2009 that “used an agent to list a home on the MLS and the agent performed few if any additional services” (“MLS Only”).
Sellers that use a flat fee MLS agent and “few, if any, additional services,” should be considered as FSBO’s. Apart from placing the listing in the MLS, the sellers themselves are doing all the marketing, as well as other responsibilities such as negotiating and preparing for closing. NAR has decided unilaterally that since an agent is ‘involved’ (in placing the home on the MLS), the sale is an ‘agent-assisted sale,’ not a FSBO sale. Adding NAR’s reported FSBO sales to these MLS-only sales, the total FSBO segment has been consistently more than 20% since 2006, when NAR began to break out the MLS-only listing data.
Now, here’s the really amazing fact. A very conservative and widely reported estimate is that 50% of FSBO home sellers eventually give up and switch to a traditional agent. (Actually, since NAR likes to emphasize the FSBO failure rate, they report it as high as 75%.) These closed transactions are rightly reported by NAR as agent-assisted; yet the size of the FSBO segment, defined as ‘those who try to sell via FSBO” is consequently at least twice as large as NAR reports. The FSBO segment is clearly an important factor in the real estate market, and one that will continue to grow in the next decade.
