FSBO Success Rate in NYC
So you’re thinking about selling your home without an agent and want to know what the FSBO success rate in NYC is
The FSBO success rate in NYC varies dramatically depending on how you are approaching the home sale process. Are you going it completely alone and listing your home For Sale By Owner on Zillow and StreetEasy? Or are you listing it via an Agent Managed FSBO and offering a commission to buyers’ agents on RLS (i.e. equivalent to the NYC MLS)?
FSBO Success Rate in NYC for Traditional FSBO Home Sellers:
The FSBO success rate for traditional FSBO sellers in NYC is absolutely abysmal. This is due to a combination of factors, primarily because the FSBO sellers loses confidence in their ability to properly market the home and succumbs to broker solicitation and harassment.
The traditional FSBO seller also inadvertently ignores the vast majority of home buyers who are represented by agents, thereby losing out on over 75% of potential bidders for his or her home.
In NYC, there are approximately 5,000 real estate transactions closed per year. 90% of those transactions are done between two agents (buyer and seller). As a result, traditional FSBO home sellers miss out on up to 90% of all home buyer traffic. By this metric, only 10% of home sales in NYC succeed in having less than two agents involved. However, you must factor in the percentage of cases where the listing agent sells a home to a buyer who chooses to remain unrepresented. After accounting for this scenario, we estimate less than 1% of all home sales are successfully sold FSBO.
Who are the buyers for the less than 1% of sales that are sold FSBO in NYC? They will be split evenly between the occasional direct buyer and brokers who dared to negotiate a one-off commission agreement with a FSBO seller. Because inventory in some markets can become very tight, desperate home buyers may often demand to see a property regardless of whether their buyer agent sent it to them or recommended it to them. As a result, a buyer’s agent will occasionally be forced to try to negotiate with a FSBO seller and get a commission agreement negotiated and signed before introducing the buyer.
FSBO Success Rate in NYC for Agent Managed FSBO
An agent managed FSBO will have a success rate equal to a traditional for sale by agent listing assuming the home seller doesn’t make the top 3 mistakes and reasons why NYC FSBO sellers fail. There are two types of discounted listings where you will avoid paying 6% in broker commissions.
The full service for 1% option is the only way to completely avoid broker solicitation as you will have a full service agent conducting all showings, handling all inquiries and negotiations on your behalf. Your full service agent would be from a reputable, full-service REBNY Member Firm with good relationships with the wider broker community.
The FSBO success rate for a 1% for full service listing is equivalent to a traditional for sale by agent listing because you will be listed by a traditional, full service broker. The only difference will be the lower rate of commission paid to the listing agent of 1% vs. a traditional 6% exclusive right to sell listing agreement. Moreover, the listing agreement you will sign will be highly favorable in comparison to traditional exclusive right to sell listing agreements because you will NOT be required to pay commission if you decide to back out after a “ready, willing and able” buyer is found at your listing price.
A more economical method is the agent assisted FSBO listing option. You would be listed in RLS and over a dozen other major real estate search websites such as StreetEasy, Zillow, Trulia and Brownstoner by a reputable, full-service REBNY Member Firm. However, you would be responsible for any private showings and much of the coordination, scheduling and negotiation. Assuming you understand the top three reasons why NYC FSBO sellers fail and have had professional photographs taken, selected a reasonable listing price and maintained your confidence in spite of any broker solicitation, then the FSBO success rate should be 100% of that of a traditional for sale by agent listing.
Why are FSBO success rates so low in New York City?
FSBO success rates for people who attempt the traditional for sale by owner route are low primarily because they lose confidence and lack basic knowledge about the home sale process in NYC.
Example of an actual client who lacked understanding about the sale process and almost got confused by broker solicitation:
A question, actually: A broker would like to send a professional photographer to the apartment, take pictures, and list on his website and the New York Times but only take a commission if he brings a buyer (the same buyer commission we offer to anyone). Would there be an issue with accepting his offer and maintaining my listing with Hauseit?
Here is the response from our customer service team:
Hi Sarah — To minimize the chance of you having to pay a buyers agent commission, would it not make the most sense for you to hire your own photographer (can be done for a few hundred dollars via Hauseit) so that we may refresh your listing’s photos and also post to NYT on your behalf? That way you retain full control of unrepresented buyer inquiries without having to fork out a buyer’s agent commission.
You would almost certainly benefit from changing out the current photos on your listing with professional ones! Unfortunately it would not be permissible for another broker to post your listing on a public website like the NYT while we are under an exclusive.
We’d also suggest not accepting solicitation from agents who do not have direct buyers for you. In addition to it being against REBNY rules for brokers to solicit owners who are under existing exclusives, these agents are almost always out to lower your confidence and rattle you to the point where you hire them. At which point they stick to a very simple formula — lower your listing price and invest in professional photos while charging you a commission once a buyer inevitably appears!
Disclosure: Hauseit and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.