Friday, January 27, 2012

What the NAR Doesn't Get About FSBO's

This week’s topic is the NAR data correction.

The NAR counts any agent involvement in a sale as an agent-assisted sale – even when a by-owner seller simply uses an agent to get a listing onto the local multiple listing service, and identifies as a by-owner seller.

In fact, the NAR's own 2011 Profile of Home Buyers & Sellers proves that alternative agencies are making significant inroads:

• 25% of sellers list with agents that "list the home on the MLS and perform few is any additional services" -- precisely the model offered by ForSaleByOwner.com

• 30% of sellers list with limited-service agents

• 24% of sellers list with full-service, traditional agents

With the proliferation of real estate services, it’s easy to see how even an expert like the National Association of Realtors could get confused. So here’s a quick rundown of the spectrum of real estate services offered by agents, from full-commission to by-owner.

Full commission – Usually, agents charge 5% to 6% to list a home. The listing agent (who represents the seller) collects half of that, splitting that half between the agent herself and her broker. That means that the agent who sold the house only nets 1.5% of the 6% commission. The same happens for the agent who represents the buyer in the sale. The home seller’s 6% fee pays both agents and their brokers. That’s why buyers don’t have to pay to have an agent represent them.

Discount fee – Smaller commission, smaller service. Discount agents sometimes offer a set basket of services for a reduced commission, or sometimes offer a pick-and-choose array of services. Either way, be sure you know what you are getting for the money.

Flat fee – Instead of a commission, a flat fee agent charges a single fee – usually from $1,000 to $4,000 – and expects you to do some of the work to offset the lower cost.

‘By owner,’ listed on Realtor.com and local multiple listing service. ForSaleByOwner.com works with cooperating agents around the country to publish its customers’ listings on local multiple listing services and at Realtor.com. Owners create their own listings with digital photos; market their houses; and by offering a 1.5% or 2% buyer’s commission, can win the interest of buyer’s agents. These homeowners count themselves as selling 'by owner,' even if the NAR doesn't.

2 comments:

Dallas Property Management said...

Your post is certainly one of the best source of valuable information every reader must follow. Glad to hear a lot from you soon. Keep on sharing! Thanks

Houses for Sale in Liberty Village said...

Wow its a very good post. The information provided by you is really very good and helpful for me. Keep sharing good information.