For quite some time, we've touted studies from Northwestern University and Stanford Universities that each found that "for sale by owner" home sellers are as effective as agents in maximizing the sales price of a home. The studies also concluded that, once commissions are taking into account, a FSBO home seller comes out financially ahead than sellers who use a real estate agent.
Now comes a new study from Consumer Reports. The publication (September 2008 issue) found home sellers who used a real estate agent received less money for their homes than sellers who sold their home without an agent. Specifically, the study concluded that homeowners who sold with the help of an agent received $5,000 less, on average, than the home’s original asking price.
So, in other words, if a person lists a $300,000 house with a Realtor, they'll sell it for $295,000 and pay more than $17,000 (6%) in commissions - -leaving them with $278,000. But a "for sale by owner" seller will list a home for $300,000 and sell it for that amount, and will receive it in full since they're not paying commission. That's a $20,000 differential between a FSBO seller and an agent-represented seller.
If you're thinking about selling a house, why wouldn't anyone want to use a site like ForSaleByOwner.com and enjoy such savings?
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3 comments:
My wife and I are in the process of a divorce, and I want to sell our house myself, she wants to use an agent. I've explained how we can end up with more money to add to our equitable distribution of property paperwork without an agent, but she won't listen. I can't wait to show her this information, I hope that she'll come around.
This confirms what we have been saying all along. NAR touts their own studies claiming that it is the realtor who sells for more. However here is an INDEPENDENT agency claiming just the opposite. The fact is, it all boils down to a quick sale/commission for most agents. Netting $5,000 more for the home owner means exactly that: $5,000 more for the home owner. On the other hand the agent most likely would only recieve an additional $150 for all the effort in holding out for a higher price. Numerous studies keep confirming this. Will NAR ever wake up from its state of denial?
Did those totals account for the time and money spent in marketing the home (printing flyers, lost time from work for showing, etc.) It just seems a little too simple for me.
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