'For Sale By Owner' Listings Tend to Be Used by Rural and Lower-Income Sellers

Over three-year period, 4-6% of all monthly listings nationwide were offered directly by owners

SEATTLE, Nov. 23, 2021 -- A recent report released by Zillow highlights trends in homes listed as "For Sale By Owner" (FSBO), which are advertised and sold directly by owners without enlisting the services of an agent. Over the past three years, FSBOs have made up 4-6% of all home listings nationally, which translated to roughly 63,000 homes for sale during September 2021. The research also found that 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," 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."

The research found that in 2021, 24% of rural sellers did not use an agent, compared to 16% of suburban and 20% of urban sellers. Additionally, across all markets, FSBOs are listed at prices 18% 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. The median listed price for a FSBO home is $292,810. The median price of a home listed with a seller's agent is $355,777.

FSBOs can be found in every state in the country, providing an option for some buyers searching for a home at a lower price point. For instance, in states like New York, Illinois and Montana, FSBOs are 19-25% less expensive than non-FSBO properties. States with the largest share of FSBO properties are concentrated in the Midwest and South. FSBOs make up at least 10% of all homes for sale in Iowa, Mississippi, Nebraska, Kentucky, Arkansas, Oklahoma and West Virginia.

The data 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%) of sellers earning less than $50,000 sold their home without the help of an agent over the past three years.

While more FSBOs are generally in rural areas, FSBOs can still be found at lower prices than traditionally listed properties in a number of large, populated U.S. metro areas. In 23 of the largest 50 metros, FSBOs are priced lower than agent listings. Looking closer at these figures, the research shows that 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% 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% of Black sellers and 76% of Latinx sellers report enlisting an agent to help sell their home. White sellers reported using an agent 83% of the time.

Overall, FSBOs are used for all home types, but are most popular for sellers of smaller home types like townhomes, row houses, duplexes, triplexes, mobile homes and manufactured homes.

The steady and consistent prevalence of FSBO listings underscores the importance of this option as one of many in today's housing market.

About Zillow Group

Zillow Group, Inc. (NASDAQ: Z and ZG) is reimagining real estate to make it easier to unlock life's next chapter.

As the most-visited real estate website in the United States, Zillow® and its affiliates offer customers an on-demand experience for selling, buying, renting or financing with transparency and nearly seamless end-to-end service. Zillow Offers® buys and sells homes directly in dozens of markets across the country, allowing sellers control over their timeline. Zillow Home Loans™, our affiliate lender, provides our customers with an easy option to get pre-approved and secure financing for their next home purchase. Zillow recently launched Zillow Homes, Inc., a licensed brokerage entity, to streamline Zillow Offers transactions.