The Truth Behind the NAR's Data Correction

For years, the National Association of Realtors statistical reports had been drifting out of touch with reality. Finally, under increasing pressure from critics, on Dec. 21, the NAR released a sweeping statistical correction: from 2007 to 2010, an average of 14% fewer houses actually sold, compared to prior NAR reporting.

This week’s ForSaleByOwner.com blogs will parse some of the details in the NAR’s report, explored more fully in our Education section.
The NAR downplayed it statistical missteps by emphasizing the corrected statistics were national, and of course, real estate markets are local. But that overlooks one major point: local markets compare their strength to the national norm, and that directly affects the decisions made by homeowners as to whether or not they should sell. Critics around the country have called on the NAR to tidy up its statistical reports going forward.

The NAR managed to blame a supposed undercount of by-owner sales as one factor for its data headaches. But the real issue is that the NAR’s definition of a ‘by owner’ sale does not reflect what a ‘by owner’ sale really is. If you put your house on your local multiple listing service or on Realtor.com through ForSaleByOwner.com, and handled every other aspect of your sale on your own, the NAR still counts your sale as ‘by agent,’ because an agent was paid a small flat fee to pass through your listing to the MLS.

By the NAR’s definition, the only marketing options that are truly ‘by owner’ are yard signs and local classifieds. But as smart home sellers know, there is a wide spectrum of services that they can tap into while still steering their sale themselves – ‘by owner.’

Image courtesy of Morguefile contributor alvimann.