Here’s another bit of common knowledge about the housing market that is being retired to the myth list. A hot sellers’ market favors homeowners going the do-it-yourself route to save money. 

Modern sales histories show that there’s more wish to that assumption than reality. In fact, many owners who start out as for sale by owners (FSBOs) end up parterning with a Realtor® after they’ve experienced what’s under the hood of real estate marketing. 

According to the National Association of Realtors® (NAR) Profile of Home Buyers and Sellers, FSBOs now account for just 7% of home sales, the lowest on record. On the opposite side of the process, 90% of home sellers sold their property with the help of a real estate agent. That’s slightly higher than last year’s assistance level. 

But with stories about properties flying off the market in a matter of days and buyers competing to outbid each other were strong motivation for owners go the FSBO route. Besides, new web technologies were out there to help. All of that was true, but it didn’t change the larger outcome.  

“Even with the tremendous equity gains homeowners have had, no one wants to leave money on the table, and an agent can help determine the best-selling price and marketing strategy to find a qualified buyer,” says Jessica Lautz, NAR’s deputy chief economist. “Buying and selling a home is likely the largest financial transaction of one’s life, and sellers want to have professional representation in that process.” 

Market history shows the FSBO market share has been shrinking for about 40 years, even as technological advances have made the transaction process more unified. During 1985 about one in five home sales were FSBOs, but since then the market share has dropped into the single digits even when you add in the 40% of FSBO sales that were among relatives. 

Another reality bite is owners who sell their own properties typically get a lower price than those who partner with a professional. According to the NAR study, the median FSBO sales was $380,000, while the sales done with the help and guidance of a professional was $435,000.  That’s more than local prices but the difference is a constant.

There’s no way around the fact that the marketing and selling of real estate is a stressful endeavor. According to reports in Realtor® Magazine about a Clever Real Estate study, “FSBOs responding to the Clever survey said they were driven by the desire for a quicker sale, an immediate need for cash or to save on paying an agent’s commission, they instead often found a lengthier sales process, a lower sales price and stress in navigating the transaction alone. Forty-three percent said home buyers tended to distrust them because they were not represented by an agent, and 40% reported struggling to understand the purchase contract, the Clever study also showed.”  

There are many reasons sellers choose Realtors® over doing it themselves, but two of note are exposure of their property to a wider market and good pricing. 

Getting a for sale notice on the web is easy. Good marketing on the web is another matter. There are issues like optimum post placement across multiple sites and good photography are just two. And then there’s the biggie – competitive pricing.  

Stories about homes that went for over asking price during a bidding war are a dime a dozen. They happen, but they are not the norm. During October 42% of the homes that closed did so after a price reduction that averaged $20,691. 

Pricing right is as much of an art as science. A professional can nail what’s happening to sales with comparative analysis. The trick is finding the sweet spot between and that takes watching and knowing what’s happening daily. 

Look at it this way. If you have a complex legal issue, you hire a lawyer. If you have a medical issue, you go to a doctor. Savvy consumers use professionals to handle complex issues, and real estate is a complex issue.