FSBO trends for 2011
The 2011 National Association of Realtors® Profile of Home Buyers and Sellers surveyed 5,708 home buyers and sellers, discovering that the demographics among buyers and sellers have changed this year, both of which are older, have higher incomes and are more likely to be married. What hasn’t changed much is the relationship between Realtor and consumer, with word of mouth referral still topping the ways home buyers and sellers initially connect with their agents, but not all consumers opt to use a real estate professional.
The saving grace for real estate professionals in this year is that a crashed economy has led to fewer sellers attempting a For Sale By Owner listing, with only 10 percent of sales which were highest in the Midwest at 13 percent and lowest in the West at just 6 percent. In 2004, the trade association says FSBOs were at 14 percent of sales, noting the drop in recent years.
FSBO seller demograhpics
Nearly half (40 percent) of all FSBO sales occur when the seller knows the buyer, noting they don’t find a real estate professional’s services necessary. The study notes that small town and resort areas have the highest FSBO rates while only 7 percent of suburban area transactions are FSBOs.
While the demographics of FSBO sellers are similar to consumers using a Realtor, FSBO sellers lean toward having lower median incomes. Additionally, FSBO sellers who knew the buyer are more likely than all other sellers to be single, especially single males.
FSBO home trends
Most homes sold (81 percent) this year are detached single family homes, 14 percent of all FSBOs are mobile homes as opposed to only 2 percent of sales employing a Realtor. While 52 percent of sales by Realtors were in suburban areas, only 39 percent of FSBOs were in suburban areas. The study states that FSBO sales are more likely than agent-assisted sales to happen in central cities or rural areas.
FSBO sales trends
Although successful FSBOs typically receive 98 percent of their asking price, they typically have a lower median selling price. “Some of the explanation for this is that when looking at FSBO sales where the seller knew the buyer,” the study noted. “Over half of the time the sales price was equal to or more than the asking price. Sellers who started as a FS BO, then ended up using an agent, sold for the lowest price and reduced their price the most of all selling methods.”
FSBOs spent less time on the market (4 weeks) than homes listed by an agent (10 weeks), especially when the seller knew the buyer, with the median time on market of one week when the buyer knew the seller.
FSBOs that ended up with an agent
The study stated that “agents seemed to help in circumstances where homes were difficult to sell. Those who first tried a FS BO then sought out an agent
had a median number of weeks on the market of 12.”
Over half of FSBO sellers did not need to sell their home urgently while 60 percent of sellers using an agent were in need of selling urgently, and FSBOs typically offered fewer incentives to buyers.
Why did FSBO sellers not use an agent?
Of sellers who opted out of using an agent, two in five said it was because they did not want to pay a commission or fee, often because they knew the buyer which was true in 67% of FSBO sales this year.
How did FSBOs market their listings?
Web listings, word of mouth and yard signs remained the top ways FSBOs marketed their listings. Most of the time (71 percent), when a seller knew the buyer, they did not actively market the home.
FSBO sellers report that attracting buyers was the most difficult, followed closely by getting the price right and understanding and performing paperwork. NAR reports that “More FS BO sellers who knew the buyer would use a real estate agent rather than sell their current home themselves. However, among those who did not know the buyer, a larger share would attempt to sell their homes themselves than use an agent.”
13 FSBO trends charted:
Austin tops the list of best places to buy a home
When looking to buy a home, taking the long view is important before making such a huge investment – where are the best places to make that commitment?
Looking at the bigger picture
(REALUOSO.COM) – Let us first express that although we are completely biased about Texas (we’re headquartered here, I personally grew up here), the data is not – Texas is the best. That’s a scientific fact. There’s a running joke in Austin that if there is a list of “best places to [anything],” we’re on it, and the joke causes eye rolls instead of humility (we’re sore winners and sore losers in this town).
That said, SelfStorage.com dug into the data and determined that the top 12 places to buy a home are currently Texas and North Carolina (and Portland, I guess you’re okay too or whatever).
They examined the nerdiest of numbers from the compound annual growth rate in inflation-adjusted GDP to cost premium, affordability, taxes, job growth, and housing availability.
“Buying a house is a big decision and a big commitment,” the company notes. “Although U.S. home prices have risen in the long term, the last decade has shown that path is sometimes full of twists, turns, dizzying heights and steep, abrupt falls. Today, home prices are stabilizing and increasing in most areas of the U.S.”
Average age of houses on the rise, so is it now better or worse to buy new?
With aging housing in America, are first-time buyers better off buying new or existing homes? The average age of a home is rising, as is the price of new housing, so a shift could be upon us.
The average home age is higher than ever
(REALUOSO.COM) – In a survey from the Department of Housing and Urban Development American Housing Survey (AHS), the median age of homes in the United States was 35 years old. In Texas, homes are a bit younger with the median age between 19 – 29 years. The northeast has the oldest homes, with the median age between 50 – 61 years. In 1985, the median age of a home was only 23 years.
With more houses around 40 years old, the National Association of Realtors asserts that homeowners will have to undertake remodeling and renovation projects before selling unless the home is sold as-is, in which case the buyer will be responsible to update their new residence. Even homeowners who aren’t selling will need to consider remodeling for structural and aesthetic reasons.
Prices of new homes on the rise
Newer homes cost more than they used to. The price differential between new homes and older homes has increased from 10 percent traditionally to around 37 percent in 2014. This is due to rising construction costs, scarcity of lots, and a low inventory of new homes that doesn’t meet the demand.
Are Realtors the real loser in the fight between Zillow Group and Move, Inc.?
The last year has been one of dramatic and rapid change in the real estate tech sector, but Realtors are vulnerable, and we’re worried.
Why Realtors are vulnerable to these rapid changes
(REALUOSO.COM) – Corporate warfare demands headlines in every industry, but in the real estate tech sector, a storm has been brewing for years, which in the last year has come to a head. Zillow Group and Move, Inc. (which is owned by News Corp. and operates ListHub, Realtor.com, TopProducer, and other brands) have been competing for a decade now, and the race has appeared to be an aggressive yet polite boxing match. Last year, the gloves came off, and now, they’ve drawn swords and appear to want blood.
Note: We’ll let you decide which company plays which role in the image above.
So how then, does any of this make Realtors the victims of this sword fight? Let’s get everyone up to speed, and then we’ll discuss.
1. Zillow poaches top talent, Move/NAR sues
It all started last year when the gloves came off – Move’s Chief Strategy Officer (who was also Realtor.com’s President), Errol Samuelson jumped ship and joined Zillow on the same day he phoned in his resignation without notice. He left under questionable circumstances, which has led to a lengthy legal battle (wherein Move and NAR have sued Zillow and Samuelson over allegations of breach of contract, breach of fiduciary duty, and misappropriation of trade secrets), with the most recent motion being for contempt, which a judge granted to Move/NAR after the mysterious “Samuelson Memo” surfaced.
Salt was added to the wound when Move awarded Samuelson’s job to Move veteran, Curt Beardsley, who days after Samuelson left, also defected to Zillow. This too led to a lawsuit, with allegations including breach of contract, violation of corporations code, illegal dumping of stocks, and Move has sought restitution. These charges are extremely serious, but demanded slightly less attention than the ongoing lawsuit against Samuelson.
2. Two major media brands emerge
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