Let's get a few things out of the way about the job of those who choose to sell their own home.
It ain't easy.
In the time it takes a first-time FSBO (for sale by owner) to sell a home, he or she has to learn what many real estate agents get to know only after assisting dozens of buyers and sellers for many years.
That includes experience gained from too many deals that don't gel, lessons learned in long hours at seminars, workshops and continuing education courses, and wisdom gleaned from picking up after errant FSBOs who couldn't hack it.
It's not surprising then, that an overwhelming majority of those who start out as FSBOs end up using a real estate agent's services.
Only 13 percent of all home transactions are completed without the assistance of a real estate professional, down from the 20 percent peak in 1987, and nearly 40 percent of those transactions are "closely held" between familiar parties, according to the National Association of Realtors.
However, the daunting gauntlet of a FSBO route to selling a home isn't stopping the small, but growing numbers of FSBOs in hardcore FSBO towns and elsewhere.
FSBO growth in Atlanta, GA, grew 71 percent last year according to listings on the ForSaleByOwner.com website. Of all the homes on the site, the largest group, 3.8 percent of them are in Atlanta.
In a new spin on FSBO behavior, the Atlanta numbers indicate FSBOs aren't fickle about when to go it alone.
A sellers' market typically gives FSBOs more of an edge, but thanks to large inventories, even with steady home-price growth, the Atlanta market is tipped in buyers' favor, according to RealtyTimes.com's Market Conditions Reports for the area.
"Atlanta has seen a steady appreciation of housing prices without the skyrocketing increases that have pushed other large markets toward a bubble. Forecasters predict about 4 percent growth in values for the next two years," according to Keller Williams agent Debbie Gross' market report.
After Atlanta, the number of FSBO listings were greatest from, Detroit, MI; New York, NY; Dallas, TX; Denver, CO; Chicago, IL; Cleveland, OH; Houston, TX; Indianapolis, IN and Cincinnati, OH, ForSaleByOwner.com reported.
Likewise, Denver, the fastest growing market for do-it-yourself sellers (166 percent more listings last year) is also in the buyers' corner. In terms of fast growing FSBO markets, Denver was followed by Dallas (119 percent); Cleveland (96 percent); Indianapolis (96 percent); Cincinnati (93 percent); New York City (84 percent); Atlanta (71 percent); Houston (24 percent); Chicago (16 percent) and Detroit (8 percent).
Many of those markets also favor buyers, but some of them, including FSBO-hot Denver, have recently come off a boom binge where high prices get credited with FSBO-listing growth, even as the market swung in buyers' favor.
It's widely accepted, especially when prices rise, most FSBOs go it alone to save money on commissions. Right now that's nearly $14,000 (minus real selling costs), or 6 percent on the $231,000 national median price for existing homes in June.
A commission-less deal also provides some equity padding in a falling market.
"With housing prices cooling, it's not surprising that we're seeing more and more homeowners in all parts of the country choosing to maximize profit and safeguard equity by selling their home without a broker," said Colby Sambrotto, COO of ForSaleByOwner.com.
Accurately tracking the FSBO market is like taking a census on desert nomads.
NAR reports the number of FSBOs is down from peak years, but there is evidence of recent FSBO growth in more than just hot FSBO markets. The growth coincides with a greater interest in discount brokers, on and off the net, again, spurred by the housing boom.
- In 2004, discount franchiser Help-U-Sell Real Estate was the only real estate company ranked among the 20 Fastest Growing Franchises in America according to Entrepreneur Magazine's Franchise 500 issue. Jumping from 98 to 44 in the 500 list, the franchise operation was listed at 15 in the top 20 list.
- Murray Consulting Inc./RealTrends.Com, a real estate industry news and analysis source, found in its 2005 Real Estate Consumer Service Model Survey, a record one-third of sellers were confident they could sell their own homes, up from 18 percent in 2002.
- Sign supplier Hillman Group reported that FSBO signs were selling like hotcakes in 2005.
"For-sale-by-owner yard sign sales are up 20 percent over last year," said vice president Dennis Blake. "We are definitely seeing a trend that more homeowners are attempting to sell by owner."
- Earlier this year, Tribune Co. subsidiary Tribune Interactive, which manages the online operations of the Los Angeles Times, Chicago Tribune, Newsday, Careerbuilder.com, Cars.com and Apartments.com, acquired ForSaleByOwner.com, listed by Media Metrix's comScore as one of the top 10 real estate websites.
What's more, the National Association of Realtors recognizes the FSBO market, however small, as a viable growth sector worthy of its "Field Guide to Working with FSBOs".
