Over a three-year period, between 4% and 6% of all monthly listings across the country were offered directly by their owners, a new report from Zillow found.
Homes listed as “For Sale By Owner” (FSBO) are advertised and sold directly by owners without an agent’s help. Roughly 63,000 homes for sale in September 2021 were FSBO, while in 2021 overall 24% of rural sellers did not use an agent.
For comparison, 16% of suburban sellers did not use an agent, along with 20% of urban sellers.
The report found that FSBOs are most common in rural areas. They were also more affordable overall. The median list price for an FSBO was $292,810, while the median price for a home sold by an agent was $355,777. Zillow noted the price disparity was likely due to the size of the homes and their locations, rather than a deep discount.
“Our research shows that homes put on the market directly by owners are a small but consistent part of the housing ecosystem,” said Zillow economist Alexandra Lee.
“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.”
FSBOs accounted for at least 10% of all homes for sale in Iowa, Mississippi, Nebraska, Kentucky, Arkansas, Oklahoma, and West Virginia, all rural states. However, FSBOs are available in 23 of the largest 50 U.S. metros and were priced lower than agent listings. In St. Louis, Atlanta, and San Antonio, FSBOs cost 10% less than other homes. FSBOs cost 19-25% less than agent-listed properties in New York, Illinois, and Montana.
Lower-income homeowners were more likely to sell their properties FSBO. A household making less than $50,000 a year was almost twice as likely to sell a home without an agent than a household making six figures. In the last three years, 24% of lower-income homeowners sold FSBO.
All homes types were represented in FSBO listings, but it was most common for smaller properties such as townhomes, duplexes, mobile homes, or manufactured homes.
Non-traditional houses, such as manufactured homes, have gained popularity as inventory shortages have driven up prices.
“Manufactured housing communities often represent the most affordable multifamily housing option available in many areas, particularly rural areas,” said Debby Jenkins, executive vice president of Freddie Mac Multifamily. Freddie Mac announced new tenant protections for owners of manufactured homes who pay rent on the land beneath them.
Like traditional houses, they have been subject to price hikes in the past year, but they still offer a more affordable alternative that is attracting attention.
Sellers of color were slightly less likely to report using an agent due to structural inequities in income. Over three years, 79% of Black sellers and 76% of Latinx sellers used an agent. White sellers, by contrast, used an agent 83% of the time.