The Potential Risks to Buyers and Sellers in a FSBO Transaction
A
ccording to my analysis of the Maryland Housing Market, the average real estate commission is about 4.5 – 5.10% which is less than the national average of 5.49%.
the sellers opting for FSBO in Maryland already know their customers which means they do not want to waste time on marketing and other activities. This speeds off the process.
This means that a seller selling a home that’s worth $400,000, will pay $20,400 in realtor fees. These are the largest fees that you will have to pay in this process which makes sense why most people avoid them, by all means, paying them. This often means going into the market alone. Do I advise it? Let’s find out!
INTERESTING FACTS ABOUT FSBOS IN MARYLAND
Based on my research, the prices of FSBO houses in Maryland are 26% less compared to those sold using an Agent. Many people often prefer selling without an agent because of two reasons; •
To save
•
To sell their homes faster.
THERE ARE SO MANY MOTIVES, BUT I FIND THESE TWO TO BE THE PRIMARY DRIVER FOR MANY PEOPLE. The first one is straightforward where a seller doesn’t feel the need to spend thousands of dollars for something they can do themselves. What you will realize is that many sellers who prefer using this route already know who their buyers are. Research shows that about half of 122 | JUNE 2022
•
FSBOs are becoming so unpopular in the market.
•
Many FSBOs in Maryland are selling less (26%) compared to agented homes (Median of $217,000 vs. $295,500).
•
FSBO sellers represented about 8% of all home sales in 2020 in the country.
•
From 1981 to 2020, FSBO sales dropped from 15% of all sales to 8%.
There is a reason why FSBOs are declining in the market and I find that most buyers in Maryland do not want to buy an FSBO. But, that doesn’t mean that they will ignore the ones that pop out during their search. Many buyers will get trapped by the ridiculously low prices. Remember, the real estate transactions are extremely complex which is something many buyers aren’t willing to overlook, and also, there is a rise of low commission real estate agents that are chipping away at the popularity of FSBOs. There are benefits associated with FSBOs including direct and effective negotiations and simplified schedules with the sellers.
PHOTOS FROM 123RF
By Rose Ogbonna
