How Did That FSBO Company Arrive At Their FSBO Statistics?

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How Did That FSBO Company Arrive At Their FSBO Statistics?

Lets Examine Their Formula

Several times recently a FSBO company here on active/rain claimed that 25% of real estate is sold privately, and went on to say you could calculate how many are sold privately, by subtracting the number of solds reported by the Canadian Real Estate Association from the number of transactions registered in the land registry office.

The fact is they are pulling straws from a haystack

Their formula is flawed as it does not take into account the number of homes that are sold by real estate brokers and are not sold through the The Multiple Listing Services offered by the Canadian Real Estate Association and as a former Real Estate Broker they would know that. They also claimed that builders were a portion of the FSBO sales as they do not sell through real estate brokers. Once again the numbers they are using are flawed as some Builders do use Real Estate brokers and Not all of those sales would be recorded by the Canadian Real Estate Association as they are done on an exclusive basis.

Everyone has the right to buy or sell in the manner they choose but for the widest possible exposure you need more than a sign on the lawn and a post on a blog or add in the newspaper.

You need the exposure that only the combined membership of your local real estate board can give You through the various networks and interrelated web sites in addition to a co-operative listing system.

Previous posts on this subject

Is 25% of Real Estate in Canada Really Sold Privately?? Update

Is 25% of Real Estate in Canada Really Sold Privately??

Posts on Property Assessment and Taxation are for informational purposes only please read the CAVEAT

Posted by Barrie Clulow on 09/28/2008 08:24 AM

Comments (22)

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22 Comments on How Did That FSBO Company Arrive At Their FSBO Statistics?

SEP

2008

They're fuddling with the statistics and assuming that there will be enough of the general public that will 'want' to believe those stats because it substantiates their beliefs that they can do just as good a job as Realtors. So Stats on the FSBO turnovers to Realtors would be beneficial....we know them - but I don't know how much we market them!

Liz - I don't think their stats will help them very much, The consumer that is savvy enough to do a good marketing job on their own will also be savvy enough to see through their stats and recognize them as marketing hype bad marketing hype at that.

SEP

2008

When the sellers get serious and know they want or need to sell their home they will take the steps we all know are required: hiring a Realtor.

In the U.S. the number of FSBOs is much hire then here in Canada. My family down in North Carolina always sold privately. When I talked to them about it they said they had the time to wait and felt they saved money by doing the legwork themselves (lawyers, etc.).

But! This past year they hired a Realtor. They were thrilled, despite there being a number of foreclosures in their neighbourhood and one on their short street, they sold for almost asking in just under 2 months.

Why did they list with a Realtor this time? They wanted to move it quickly. 2 months is very good where they are and the foreclosures were still sitting when I was there in August.

BTW, they have sold at total of 7 times privately. They had tried selling the house 1 year previously FSBO for several months but got nothing. They didn't care. If it sold it sold.

Serious = Realtor

OH!

If you look on FSBO sites, many of the houses are actually sold and are still listed and as a buyer you have to search all the FSBO sites to make sure you find all the FSBOs in the area. Who has time for that?!

Dane -Your comments intrigued me as I remembered you recently purchased a new home, and actually tried the FSBO route, and posted several posts about your experience and what you found out.

Using all your knowledge of the web and of the real estate process, how to find properties for sale and what the main FSBO sites were in the area you were looking, You still actually did what most do and used a professional real estate agent.

Here are some links to a few of Danes posts about her experience in FSBO house hunting

As a Buyer...I'm Obsessed With MLS & FSBO Websites...Do I Really Need a Realtor? - 05/19/08 02:22 PM

The Truth & Real Reasons to use a Realtor Rather Than Go FSBO - 06/02/08 11:54 AM

My Recent Experience With a FSBO - 06/05/08 03:17 PM

I JUST REALIZED THAT YOU SHALLOW HALS MIGHT THINK THAT MY POSTS ARE FROM REALTORSUCKS.COM NO NO NO NO NO

I JUST WANTED YOU TO SEE IT.

RE_LITTER HATER - your litter was deleated however your math however is as bad as the FSBO's

but then everyone is entitled to his or her opinion

just as
everyone has the right to buy or sell in the manner they choose

but for the widest possible exposure
you still need more than a sign on the lawn
and a post on a blog or add in the newspaper.

RE-LITTER HATER - should you wish to repost your comments as comments in a manner in keeping with the format used here you are welcome please save all your fancy text, links etc. for your own blog.

We welcome debate on any issue just as we welcome everyones right to their own opinion and to the manner they choose to sell or buy their home.

OCT

2008

RE-LITTER Hater looks distinctly like the same person who emailed "hate' emails to me from an area FSBO company. Yet another reason to use a REALTOR® as they are obliged to follow stringents standards of practice and a Code of Ethics PLUS, we are legislatively bound to protect the consumer. But that's all aside from your original point. I too have wondered where the numbers come from. In our area, I have yet to see any of the FSBO companies have more than one or two of their advertised properties sell. There are many signs up but no activity. Using the land registry formula makes no sense. Many, many properties are transferred upon divorce, death, partnership splits and a host of ther reasons. If you pull up registry records for a certain area, have a look at all the two dollar transfers. They are not sales but yet are huge in volume. It really disturbs me that these companies are not (YET) bound by consumer protection standards as many other businesses are. I do truly believe in a person's right to sell privately if they are above board, honest and fair in their dealings. I also truly believe that what I do for a living is very valuable to consumers. To each his own however, the standards of honesty and integrity have a long way to go in the commercial FSBO arena.

OCT

2008

Marg - I imagine some of the FSBO operators figured all they had to do was hang out a shingle and FSBO's would flock to their door. The biggest kick I get is they are sending their potential clients to REALTOR® to get their pricing information. They just can not offer what a REALTOR® does.

OCT

2008

Thanks for the link love Barrie!

While I wasn't really going the FSBO way to buy I did want to make sure I saw all houses available in my area and price range. Not one FSBO was actually entered despite trying. That doesn't bode well for going the FSBO route.

Dane - real life experience with FSBO's from someone who knows and understands how real estate works but is not a real estate professional speaks volumes more than anything anyone else could say

Well, then Barrie, let me sum it up for consumers who are considering selling FSBO.

Don't bother. You are not going to take time off work to show your house because you will think...'eh they are just looking'
You really don't need to sell...so why waste buyers time when you have an inflated price (for a FSBO).
I will not pay the same of a FSBO house next door to the same house sold by a Realtor. Too many issues can come up and or fall through. That is why a Realtor is paid their commission to make sure everything is in place and the property is available for showing around the clock.
FSBO means jumping through hoops to find the houses! Who's got the time for that?!

Cheers,

Dane

OCT

2008

Dane - clear as a bell

OCT

2008

Interetsing Post. We all agree everyone has the right to sell there house how they choose. I have seen it done successfully a few times, however the longer I am in Real estate I recognize the value of a good realtor. If you have time check out my blog titled fsbo success story !! I recently converted a FSBO ( raised the price ) and sold the house in one day .. Our actions will and do speak louder than words ... Our industry is solid as long as the integrety of mls is preserved, ( which the general public doesnt realize we all invest in this service )

OCT

2008

Carl - Ahh The age of entitlement I want it all, I want it now, and I want it for free. One of these days the world will awaken to the fact that REALTORS do earn what they charge.

OCT

2008

Barrie

Thanks for taking the time to bring out some of the truths about the FSBO company.

I feel if someone wants to take on the job of selling their own poperty they certainly have every right to. As a realtor I respect that and hope that most other realtors do as well. Much the same as if I decide to change the oil in my car myself, I would expect my mechanic not to be upset with that.

It's also interesting to note that the savings that the site reports are based on 6% commisiions. In our area I think the average would be less than that. And it would be more to the point to call it earning the money rather than saving it. Many that have gone the FSBO route get a quick education as to what all is involved in the sale of their largest assett.

When I started my reatestate career in Oshawa 1989 a large part of my business was listing FSBOs that had become discouraged after trying it on their own. Nice to see so many potential clients out there.

Bob - As a former broker I echo your feelings and you are correct they are not saving the commission they are earning it.

FEB

2009

The Canadian Real Estate Association (CREA) claims they believe that real estate brokers account for 75 to 80% of transactions in Canada. According to figures for 2003, more than 440,000 homes were sold by a broker. This leaves as many as 150,000 or 25% that sold in the same time period without the aid of a broker.

Statistics from Wikipedia and The Globe and Mail.

Mr. Durham FSBO - that is simply ridiculous. First of all, you are citing a Globe article from 2004! Do you have something more current and reliable? Also, did you read that old old wiki reference and the sources? Did the article take into account people who bought direct from a builder or sold within family? No.

If you take the time to look at the latest NAR survey for 2008, it points out that, "Eight-one percent of buyers used an agent to find the home that they bought. That number has increased steadily since 2001 when the figure was 69%. Ten percent of buyers purchased directly from a builder, and 6% bought directly from an owner." You may note this adds up to 97% and the balance were likely non-arms length transfers of title.

The trend is AWAY from FSBO as consumers recognize the value of dealing with a REALTOR®. I'm sure the hard stats of how many people switched from selling privately to listing professionally are very telling everywhere as they are in our own community.

I don't begrudge what you do and wish you success since there are consumers who want your service. Putting out incorrect or misleading information however, is simply unacceptable and not in anyone's interest.

Finally, why is it that your name is not shown anywhere on AR or your personal website?

FEB

2009

Marg.

Thanks for the voice of reason.

Bob

MAR

2009

I find it interesting that our FSBO promoter claims to have been a top producing REALTOR® for 15 years yet hides behind a company name with no indication of who he is or why he left (if in fact he did "leave") the industry.

To use his figures if less than 25% of the sales are conducted privately why would anyone who did not have the marketing expertise, multiple web sites, sales ability or a myriad of other talents skills and tools a REALTOR® brings to the table ignore 75% or more of the potential buyers who do use a REALTOR®

As I have always maintained.

Everyone has the right to buy or sell in the manner they choose but for the widest possible exposure you need more than a sign on the lawn and a post on a blog a single website or an add in the newspaper.

This blog does not allow anonymous comments

Barrie Clulow

Uxbridge, ON

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