In 2024, more than half of all homeowners plan to sell their home independently. They’re selling their home the For Sale By Owner (FSBO) way rather than going through a realtor. This alternative model comes in light of a series of lawsuits challenging the standard commissions paid to real estate agents, leading to significant changes in industry practices. According to information released by the National Association of Realtors (NAR), just 6% of home sales last year were a result of FSBO. That’s an all-time low, despite these historic changes still playing out.
Meet Jill Langen, a 61-year-old higher education administrator from Clarkston, Michigan, who took the plunge. Not wanting a lengthy or costly transition, she determined to sell her house on her own – without the use of a realtor. After 25 years in her house, Langen decided to take control. She carefully coordinated the timing for the sale and prepared her home to come on the market.
The FSBO Experience
Langen started her planning months ahead, photographing her home last spring to accentuate the charms of her classic abode. Yet, she wanted a warm space that depersonalized the experience.
“We wanted it to look welcoming, but not like someone was living there,” – Jill Langen
Once her house was completed, she had an open house and set up half a dozen showings on the first day or two. The response was crazy amazing. Langen had an avalanche of competing offers, finally accepting one from an unrepresented buyer.
Although self-managing a home sale brings its own stressors, Langen was successful in her venture. The title company handled all the paperwork involved in her sale. This removed many of the usual challenges that accompany FSBO deals.
“Some were wonderful and some were unpleasant, which surprised me,” – Jill Langen
Industry Changes and Challenges
The context for Langen’s story is a changing real estate landscape driven by increased legal scrutiny of the practice of commission steering into new home sales. Over the past few years, these lawsuits have challenged whether such high commissions are really necessary or appropriate. In time, the industry recovered from those major hits. Due to this, they have been forced to reexamine their policies and procedures regarding real property disposals.
Although FSBO might sound like a good idea, most home sellers end up paying a commission after all. This fee typically ranges from 5%-6% of the home’s sale price. Indeed, homes sold through FSBO transactions realize lower sales prices on average. That’s no small difference, as last year the typical FSBO home sold for $380,000, versus $435,000 for agent-assisted sales. But that’s not the whole story. This disparity can discourage a significant number of homeowners from pursuing FSBO.
Additionally, the National Association of Realtors, which represents more than 1.5 million real estate agents, has relentlessly lobbied against innovation in real estate transaction processes. The organization emphasizes the value that experienced agents bring to the table, particularly for those unfamiliar with the complexities of home sales.
Diverse Perspectives on FSBO
Recently retired homeowner Aditya Srinivasan took a different path. Instead of attempting FSBO, he opted to list his home with a trusted realtor. His choice grew out of his understanding about the time, effort, and risk involved with pursuing a sale on your own.
“You’ve got to be careful. Your bandwidth does get used up with these things a little bit,” – Aditya Srinivasan
Srinivasan’s caution reveals a widespread fear among homeowners and potential FSBO-ers. While some buyers might succeed in this new world, many others will be swamped by the process absent the support of a professional.
In comparison, Langen was comfortable navigating the sale on her own. She had a lot of unfettered time without looming deadlines. Without work commitments or school schedules, she figured it was worth a shot to try FSBO.
“Time was on our side. We weren’t in a rush. We didn’t have to move before school started or a work deadline or something like that,” – Jill Langen
Looking back on her FSBO experience, Langen said she was happy with the way it turned out.
“FSBO is great for some people and probably not a good option for everybody. It was a really good option for us.” – Jill Langen