12. January 2012 12:17
"Fesbo", the phonetic pronunciation of the acronym FSBO, has been garnering attention for the past 24 months and had become a buzzword in the real estate world: "For Sale By Owner".
With recent impositions by the Competition Bureau and subsequently supported by anti-competition tribunals, FSBO is now a reality. To consumers and investors in real property, this was a movement of significant magnitude...or was it?
To my surprise, the expectation of a mass exodus from the Mulitple Listing Service (MLS) fell far short of what the Competition Bureau was hoping to achieve - which was a seller liberation of sorts. But in a twist of irony, it now appears almost as if the sellers just wanted to have the choice, but not necessarily exercise that choice. Or, they took the choice but came to the realization that FSBO was not the right thing for them.
Realtor.org has released the results of a poll of FSBO sellers that suggest the same [http://www.realtor.org/library/library/fg006]:
Most Difficult Tasks for FSBO Sellers:
Getting the right price . . . 12%
Understanding and performing paperwork: 11%
Having enough time to devote to all aspects of the sale: 6%
Preparing/fixing up home for sale: 5%
Selling within the planned length of time: 5%
Furthermore, in 2011, FSBOs accounted for only 10% of residential sales. The typical FSBO home sold for $150,000 compared to $215,000 for agent-assisted sales.
The market price is clearly significant and has been a compelling factor in sellers sticking to the tried-and-true conventional methods of residential sales. Perhaps they also prefer having the guidance and expertise of an experienced Realtor to help them with showings, and weaving through the myriad of paperwork in real estate transactions. So at least for the time being, the MLS still has the upperhand on FSBO due to its farther reach and de facto association to real estate agents who can help alleviate the complexities of residential sales and to achieve a higher market price in a shorter timeframe.
In 2011, FSBO was an interesting alternative and had potential, but for the faint of heart, the MLS reigned supreme. But of course all this is just in retrospect. Who knows what will be in the cards for FSBO in 2012...