FSBO Sales Hit Record Low: Why Selling a Home Without an Agent is Declining

For Sale By Owner (FSBO) transactions now represent a record low of just 5% of home sales, a significant drop from 21% in 1985. According to the National Association of Realtors® (NAR), FSBO homes also sell for a median of 18% less than agent-assisted listings. For most homeowners, the complexities of the modern market make partnering with a real estate agent the more effective path to a successful sale.

What is Driving the Decline in FSBO Sales?

The decline is primarily due to the considerable challenges of navigating a real estate transaction alone. Home selling involves intricate paperwork, marketing, price negotiations, and ensuring a buyer can secure financing and close. Without an agent's expertise, homeowners often find the process overwhelming. As market conditions fluctuate with interest rates and inflation, the strategy of simply placing a sign in the yard is largely ineffective. While FSBO can work in specific scenarios, like having a pre-qualified buyer, data shows that most sellers achieve better outcomes with professional representation.

What are the Perceived Benefits of Selling FSBO?

The most common reason homeowners attempt a FSBO sale is to avoid paying a real estate agent’s commission. Other potential advantages include:

• Control Over Showings: You can set a flexible schedule for home viewings.
• Personalized Marketing: You have direct control over how the property is advertised.
• Neighborhood Knowledge: You can speak firsthand about the community and local amenities.
• Pricing Autonomy: You set the listing price without external pressure.

However, these benefits are often outweighed by significant drawbacks that can impact the final sale price and overall experience.

What are the Key Risks of a FSBO Sale?

The risks of selling without an agent are substantial and can be costly.

Inaccurate Pricing: One of the biggest challenges is setting the right price. FSBO sellers often rely on online estimates, which are automated and cannot account for a home's unique condition or current local market trends. According to NAR data, the median FSBO sale price was $360,000 over the past year, compared to $425,000 for agent-assisted homes.

Limited Market Exposure: FSBO listings typically have limited exposure to the broader brokerage community. This means fewer real estate agents will show your property to their potential buyers, which can result in a longer market time and ultimately, a lower selling price.

Lack of Negotiation Expertise: Negotiating a real estate contract is a specialized skill. Without experience, sellers may accept a lower offer or concede on unfavorable terms, effectively "leaving money on the table."

Legal and Procedural Pitfalls: Real estate transactions are legally binding contracts. An incomplete understanding of disclosure laws, contingency periods, and closing procedures can lead to costly mistakes, delays, or even post-sale legal disputes.

Why Do Most Sellers Choose a Real Estate Agent?

NAR research indicates that 91% of sellers used a real estate agent. The top reasons include needing help to:

• Market the home to the right buyers.
• Price the home competitively from the start.
• Sell the home within a specific timeframe.
• Navigate negotiations and complex paperwork.

Agents provide critical expertise, from preparing a home for market to acting as a buffer during emotional negotiations. This professional guidance often translates into a higher final sales price, a faster sale, and significantly less stress for the homeowner.

For homeowners, the decision often comes down to net proceeds and peace of mind. While avoiding a commission is appealing, the expert pricing, marketing, and negotiation provided by an agent typically result in a higher final sale price that more than covers the cost of professional services.