One of the main reasons why For Sale By Owners (FSBOs) don’t use a real estate agent is because they believe they will save the commission an agent charges for getting their house on the market and selling it. A new study by Collateral Analytics, however, reveals that FSBOs don’t actually save anything, and in some cases may be costing themselves more, by not listing with an agent.
In the study, they analyzed home sales in a variety of markets in 2016 and the first half of 2017. The data showed that:
“FSBOs tend to sell for lower prices than comparable home sales, and in many cases below the average differential represented by the prevailing commission rate.” (emphasis added)
Why would FSBOs net less money than if they used an agent?
The study makes several suggestions:
“There could be systematic bias on the buyer side as well. FSBO sales might attract more strategic buyers than MLS sales, particularly buyers who rationalize lower-priced bids on with the logic that the seller is “saving” a traditional commission. Such buyers might specifically search for and target sellers who are not getting representational assistance from agents.” In other words, ‘bargain lookers’ might shop FSBOs more often.
“Experienced agents are experts at ‘staging’ homes for sale” which could bring more money for the home.
“Properties listed with a broker that is a member of the local MLS will be listed online with all other participating broker websites, marketing the home to a much larger buyer population. And those MLS properties generally offer compensation to agents who represent buyers, incentivizing them to show and sell the property and again potentially enlarging the buyer pool.” If more buyers see a home, the greater the chances are that there could be a bidding war for the property.
Three conclusions from the study:
FSBOs achieve prices significantly lower than those from similar properties sold by Realtors using the MLS.
The differential in selling prices for FSBOs when compared to MLS sales of similar properties is about 5.5%.
The sales in 2017 suggest the average price was near 6% lower for FSBO sales of similar properties.
If you are thinking of selling, FSBOing may end up costing you money instead of saving you money.
Author:REMAX Elite Phone: Dated: August 24th 2017 Views: 132 About REMAX: ...
View our latest blog posts in your RSS reader. Click here to access.
I am a dedicated agent who is known for getting the job done and making the impossible happen. I will show you I am not the stereotypical agent by doing what I say and keeping YOUR best interest at hand. The way I operate my business is simple, No Lies or False Promises just the facts and a professional aggressive approach to getting things done.
Being a strong minded honest individual who loves his family and work would be a good start to my description. When I became a Realtor I was looking for a change in the way I was able to represent my clients. In past years I worked in the automotive industry and was governed by rules and customer service guidelines that I didn't always agree with. Now I am able to treat every client as family and can do what is in their best interest at all times. This is the KEY to making Customers For Life and not just another sale. I promise that I will treat you like a person and not just another commission. When you join my team you can rest assured that you have a friend in the industry on your team. As a local and native Floridian I know the area better than the majority of other Realtors and am able to answer your questions with honesty and knowledge in every transaction.
Your Wants Needs and Budget are Important so call me and lets get the ball rolling on your next real estate transaction.
One of the main reasons why For Sale By Owners (FSBOs) don’t use a r
"I recently went up against competitors in Lansing Island for a $1.7 million dollar listing. Justin stopped what he was doing and went out of his way to assist me in securing the listing. We talked about what to say and how to say it. He even took the time to e-mail responses to objections the seller was making about the competition. All I had to do was simply copy & paste what he said and send along with my signature on it. Long story short, I won the listing and sold the house 3 weeks later. By leveraging the knowledge and support of a Billion Dollar Broker, I now have an additional $30,395 sitting in my bank account! The value that I receive working with Justin, Heather, Susan, Lisi, Sharon and the rest of the crew here at Elite has been priceless!"