In the United States, where there are about 6 million existing home transactions per year, it is said that about 7% of them are FSBO (For Sales By Owner) transactions. This figure is announced by the National Association of Realtors (NAR), and it should be noted that there are about 20% of transactions that are not registered in their database, the MLS (the difference between MLS and public-record-based data). Considering that, it would be about 10% of all transactions.
It is interesting that even though most housing information can be found online these days, the number of real estate agents and their average income are increasing.
The situation is a little different in the US rental market, where about 40% of owners find their own tenants, and the majority of the rest seem to leave it to management companies. However, in large cities, there seems to be a tendency to use agents in the rental market.
According to Zillow, about 36% of owners try FSBO when they sell, but most of them seem to give up. It seems that FSBO is not subject to the “Fair Housing Act” which prohibits discrimination in housing transactions, but it still seems to be difficult in many ways.
In terms of price, NAR says that FSBO is cheaper than using a real estate agent. On the other hand, there are some who question NAR’s claim, and there are also some who point out that there may be a price difference between when a real estate agent sells his or her own property and when he or she sells someone else’s property in the course of business.
There are also increasing lawsuits that seem to view this situation, where the number of real estate agents and their average income are increasing, as a kind of “monopoly”.
(1) A lawsuit filed by the bankrupt company Rex against the real estate portal Zillow, claiming that it was damaged by the rule that NAR prohibits the display of MLS and non-MLS properties on the same page (Real Estate Exchange Inc v. Zillow Inc, U.S. District Court, Western District of Washington, 2:21-CV-00312-TSZ)
(2) A lawsuit filed by PLS, which has discontinued its service, against NAR, claiming that it was damaged by the rule that requires real estate agents to immediately list properties on the MLS when they handle them (The PLS.com LLC v The National Association of Realtors et al, U.S. District Court, Central District of California, 2:20-cv-04790-JWH-E.)
(3) Also on the rule that “the seller decides the commission of the buyer’s real estate agent”, which was mentioned in previous blog.
These lawsuits could be enjoyed more as entertainment, but if all of these rules were abolished, would there be an increase in properties that do not use the MLS, or would the buyer’s and seller’s agents become the same (dual agency?)? A new database that is not MLS may be born.
In any case, Future Sales By Owner should be the answer.
