For sale by owner
Encyclopedia
For Sale By Owner, or FSBO (icon), is the process of selling real estate
without the representation of a real estate broker
or real estate agent. Homeowners may employ the services of marketing or online listing companies or market their own property but do not pay a commission and represent themselves with the help of a lawyer
throughout the sale.
When a homeowner decides to sell their home without a real estate agent and a buyer who is not working with an agent wants to buy the home, the seller pays no commission because no real estate agents are involved.
If a buyer who is represented by an agent is interested in a FSBO home, that buyer's agent may request the owner pay him or her a commission, or finder's fee, for bringing the buyer. The seller may choose to either pay the fee or refuse. The seller is not legally obligated to pay any commission. If no agreement is in place with either the home buyer or the owner of the FSBO property, the buyer's agent may not necessarily be compensated in the transaction, or may be compensated by the buyer.
and CTV Consumer Reports state that between 20% and 25% of homes in Canada are sold through brokers each year. MSN Money suggests that 30% of homes are sold without using a real estate agent. Companies like www.PropertyGuys.com
help Canadian home owners sell their homes without the aid of a real estate agent.
More than half of the homes sold in Quebec
are sold without an agent.
(NAR) regarding their 2009 annual survey of real estate consumers, 2009 Profile of Home Buyers and Sellers, 11% of 2009 US real estate transactions were FSBO, down from 13% in 2008, and a previous peak of 18% in 1997. The record percentage of 20% of US real estate transactions (since tracking started in 1981) took place in 1987.
Some critics of the National Association of Realtors' report believe those statistics may be misleading and suggest that the true size of the U.S. FSBO market is closer to 22% because the report also found that flat-fee MLS now makes up 10% of transactions. They argue that flat-fee MLS sellers are in substance FSBO sellers. Unlike traditional real estate agent clients, flat-fee sellers are not committed to paying a commission and still advertise their homes as being for sale by owner.
Real estate
In general use, esp. North American, 'real estate' is taken to mean "Property consisting of land and the buildings on it, along with its natural resources such as crops, minerals, or water; immovable property of this nature; an interest vested in this; an item of real property; buildings or...
without the representation of a real estate broker
Real estate broker
A real estate broker, real estate agent or realtor is a party who acts as an intermediary between sellers and buyers of real estate/real property and attempts to find sellers who wish to sell and buyers who wish to buy...
or real estate agent. Homeowners may employ the services of marketing or online listing companies or market their own property but do not pay a commission and represent themselves with the help of a lawyer
Lawyer
A lawyer, according to Black's Law Dictionary, is "a person learned in the law; as an attorney, counsel or solicitor; a person who is practicing law." Law is the system of rules of conduct established by the sovereign government of a society to correct wrongs, maintain the stability of political...
throughout the sale.
Interaction with Real Estate Agents
One of the most popular reasons why homeowners choose to sell their house without the assistance of an agent is to avoid paying an agent's commission. In the US the agent's fee typically makes up 6% of the selling price of the property.When a homeowner decides to sell their home without a real estate agent and a buyer who is not working with an agent wants to buy the home, the seller pays no commission because no real estate agents are involved.
If a buyer who is represented by an agent is interested in a FSBO home, that buyer's agent may request the owner pay him or her a commission, or finder's fee, for bringing the buyer. The seller may choose to either pay the fee or refuse. The seller is not legally obligated to pay any commission. If no agreement is in place with either the home buyer or the owner of the FSBO property, the buyer's agent may not necessarily be compensated in the transaction, or may be compensated by the buyer.
Canada
Separate reports from the Canadian Real Estate AssociationCanadian Real Estate Association
The Canadian Real Estate Association represents over 100,000 Realtors across Canada.The Association owns the Multiple Listing Service or MLS trademark and the Realtor trademarks in Canada. Local real estate Boards or Associations operate a local data base under a licensing agreement with the...
and CTV Consumer Reports state that between 20% and 25% of homes in Canada are sold through brokers each year. MSN Money suggests that 30% of homes are sold without using a real estate agent. Companies like www.PropertyGuys.com
PropertyGuys.com
PropertyGuys.com Inc. is a Canadian private sale real estate, or FSBO, marketing company based in Moncton, New Brunswick. With 123 franchise locations across Canada and more than 10,000 active listings on its site, it is the largest private home sale network in North America...
help Canadian home owners sell their homes without the aid of a real estate agent.
More than half of the homes sold in Quebec
Quebec
Quebec or is a province in east-central Canada. It is the only Canadian province with a predominantly French-speaking population and the only one whose sole official language is French at the provincial level....
are sold without an agent.
UK
In the UK, the average commission rate is significantly lower than in Canada or the US. Properties for sale by owner are less common.USA
According to a press release by the National Association of RealtorsNational Association of Realtors
The National Association of Realtors , whose members are known as Realtors, is North America's largest trade association. representing over 1.2 million members , including NAR's institutes, societies, and councils, involved in all aspects of the residential and commercial real estate industries...
(NAR) regarding their 2009 annual survey of real estate consumers, 2009 Profile of Home Buyers and Sellers, 11% of 2009 US real estate transactions were FSBO, down from 13% in 2008, and a previous peak of 18% in 1997. The record percentage of 20% of US real estate transactions (since tracking started in 1981) took place in 1987.
Some critics of the National Association of Realtors' report believe those statistics may be misleading and suggest that the true size of the U.S. FSBO market is closer to 22% because the report also found that flat-fee MLS now makes up 10% of transactions. They argue that flat-fee MLS sellers are in substance FSBO sellers. Unlike traditional real estate agent clients, flat-fee sellers are not committed to paying a commission and still advertise their homes as being for sale by owner.