Some owners hesitate a lot before they let a real estate agent handle the listing and sale of their home. This is because quite a number of American homeowners are lured by the idea of putting up their homes for sale by owner (FSBO). There are those who succeed in this and save themselves the broker’s commission which they would have to pay if they hired a real estate agent.
However, there are also quite a large number of homeowners who weren’t quite as successful in trying their hand on FSBO transactions. For them, doing FSBO took a lot of their personal time as they had to attend to every potential buyer who asked to do a walkthrough. They also had to answer numerous chats, text messages, phone calls, and emails. So, one of the questions that homeowners often ask is whether it would really be faster to sell their homes with a realtor.
How Long Does It Take To Sell A House
According to the National Association of Realtors, most houses remained an average of 39 days in 2021 before they were sold. This average period covered listing to closing. This data indicates that houses were sold 30% more quickly than they were during the same month a year ago. The same report indicated that it took 48 days for the average buyer to apply for and close on their mortgage loans.
The same report by the National Association of Realtors said that the speed with which your home can be sold depends on several factors. Some of these factors have to do with the condition of your property, the prevailing market conditions, the time when you listed your home, and the real estate agent you hire to handle the entire transaction.
The seller can also contribute to hastening the buying process. The seller can prepare the property, time the listing, and hire an experienced and resourceful real estate agent.
Advantage Of Hiring A Real Estate Agent
One of the many advantages of getting the services of real estate agents is that they know by heart the average number of days those homes being sold in your neighborhood spend on the market. You can ask the agents about it before you hire them.
You can also do the math yourself. You can compute for the average days on market (DOM) by taking note of the specific day that each home comes out on the market each month. Then, you should count the number of days those homes spend on the market pending sale. Add the total number of homes that are for sale in your neighborhood. Then you divide the total by the number of homes. Most real estate listing websites also indicate the days on the market of each listing.
Comparing For Sale By Owner (FSBO) And Agent-Assisted
Houses sold for-sale-by-owner (FSBO) were often sold in less than two weeks’ time. Homes sold with the help of real estate agents took around three weeks on the market before they were closed. It would seem from these numbers then that homes FSBO were sold more quickly. But these numbers don’t reflect the fact that most of these FSBO sales were transactions conducted between parties who already knew each other even before the seller thought of selling.
However, the National Association of Realtors (NAR) also found that homes which were sold on the Multiple Listing Service (MLS) were sold at a speed of 20% faster on average compared with homes FSBO. In fact, around a fifth or 20% of FSBO sellers had to list their home on the MLS because they didn’t succeed in selling it on their own. One of the main reasons agent-assisted transactions have a higher and faster chance of closing is that real estate agents devote their full-time to selling the homes in their listings.
Here are some of the other salient points of the NAR report on FSBO sales:
- The median days on the market (DOM) for FSBO homes was one week. By contrast, the median days on the market for agent-assisted homes was three weeks.
- Of the total number of FSBO homes which came out in the market, only half or 50% were successfully sold without subsequently being listed or getting help from a real estate agent.
- Of the FSBO homes which were successfully sold, up to half or 50% already knew the buyer of their home and didn’t need to list.
- Of the FSBO homes which were successfully sold, around 77% were closed in a span of less than 2 weeks.
It might look to some that, indeed, it would be faster to sell homes through the FSBO option. But a closer look at the statistics reported by the NAR would show that:
- Around half or 50% of all homeowners who tried to sell FSBO didn’t succeed in selling their homes FSBO. They eventually had to hire the services of a real estate agent and have their homes listed on the MLS or other real estate listing website.
- Up to half or 50% of those who were able to successfully sell their homes FSBO were able to do so because of one important element: The seller already knew the buyer of their home. This means that up to a fourth or 25% of homeowners who tried to sell their homes FSBO-–-those who succeeded as well as those who didn’t—already knew the buyer. In other words, half of FSBO already had buyers in waiting.
From all these statistics, real estate specialists conclude that selling FSBO is only a viable option if the seller already knows a buyer who is ready, willing, and able to buy the property. This is the crucial element which enabled the houses to sell so quickly. Without this, there’s a 50-50 probability that a seller who does FSBO will fail in selling a home.
Perhaps a more important difference is that homes which were sold by their owners were typically sold at prices which were, on average, sold at 10% less than those handled by real estate agents. The FSBO sales came through faster because the sellers already knew their buyers. But other than this, agent-assisted sales took a little bit longer because the agents were able to secure a higher price for their clients.
What Makes A House Sell More Quickly
There’s no one uniform reason or logical explanation why some homes sell faster than others. Some real estate industry analysts would say this is just a matter of luck. But others would say it’s a combination of several factors. These are some factors which can contribute to helping a house sell more quickly than most others:
- Your Real Estate Agent
Getting an experienced agent who knows your local market will certainly help you sell your home faster. This is one of the most powerful insights that can be derived from the NAR statistics. You should hire an agent who has a vast network of contacts.
Your agent should have existing relationships with a number of potential buyers and investors. Hire an agent who is known to have proven marketing strategies and selling skills. This will help you find a qualified buyer earlier. Keep in mind that the average agent has around nine years of experience in selling homes.
- Specific Market
Every market segment can be affected by both common and unique factors. These factors have an impact on the length of time or days on the market of a home before being sold. For instance, if a large employer pulled out from a certain locality, it’s not unlikely that some of the residents would lose their jobs. Some of them might have to sell their homes. It also makes the place a little less appealing because of one less potential employer for people who might want to live there.
- Overall Economic Conditions
The DOM is also affected by the prevailing overall market conditions in the American economy. For instance, high interest rates can restrict liquidity and access to credit and capital. Potential home buyers might find it less attractive to buy homes when interest rates are too high. It means that it would be more expensive for them to finance their investments and purchases with bank financing. On the other hand, a recession can cause massive layoffs. This would force more people to sell their homes.
- Overall Market Conditions And Trends
The DOM can also be affected by prevailing market trends. If there’s a surplus of real estate inventories in the market, it might take longer because of the number of homes for sale. The buyers might be more selective and discriminating as they have more options. On the other hand, if there’s a recession, more people might be forced to relocate to look for better economic opportunities. They would have to sell their homes before they moved elsewhere.
Some people who tried selling their homes FSBO have done so for a variety of reasons. Some thought that they could save on the 5-6% real estate broker’s commission, which is an industry standard. Others thought that they could save some time if they did it on their own. Studies have shown that around half of sellers who did FSBO succeeded because they already knew the buyer. The rest eventually ended up having to ask for the help of a real estate agent.