Over the past three years, “For Sale By Owner” (FSBO) listings have made up 4 percent to 6 percent of all home listings nationally, according to a recent Zillow report. The research also found FSBOs are most common in rural areas and tend to be more affordable.
“Our research shows that homes put on the market directly by owners are a small but consistent part of the housing ecosystem,” Zillow Economist Alexandra Lee said in a release. “We see that these types of listings are more heavily used by rural, lower-income sellers, a demographic that appears to value flexibility to sell their home on their own terms.”
The report found that in 2021, nearly a quarter (24 percent) of rural sellers did not use an agent, compared with 16 percent of suburban and 20 percent of urban sellers. Additionally, across all markets, FSBOs are listed at prices 18 percent lower than properties represented by agents.
This trend is likely attributable to location and size of the home, rather than the home being sold at a discounted price, according to Zillow. The median listed price for a FSBO home is $292,810. The median price of a home listed with an agent is $355,777.
States with the largest share of FSBO properties are concentrated in the Midwest and South. FSBOs make up at least 10 percent of all homes for sale in Iowa, Mississippi, Nebraska, Kentucky, Arkansas, Oklahoma and West Virginia.
The Zillow report shows homeowners with lower incomes are more likely to sell their properties directly. For instance, a household earning less than $50,000 annually is almost twice as likely to sell a home without an agent than a household earning over six figures. Around a quarter (24 percent) of sellers earning less than $50,000 sold their home without the help of an agent over the past three years.
While rural areas generally see more FSBOs, such sales can still be found at lower prices than traditionally listed properties in several large, populated metro areas, according to the report. In 23 of the largest 50 metros, FSBOs are priced lower than agent listings.
Homes for sale by the owner in Indianapolis, St. Louis, Atlanta and San Antonio had the largest price differential. FSBOs in these markets were listed at 10 percent less than traditionally listed properties in these markets.
The research also found that due to structural inequities in income and, in turn, home value and type, sellers of color are slightly less likely to report using an agent. On average over the past three years, 79 percent of Black sellers and 76 percent of Latinx sellers report enlisting an agent to help sell their home. White sellers reported using an agent 83 percent of the time.