Call Jen Instead!
Inventory is low and there’s not arguing that it does cost some money to hire a Realtor. Some people might consider selling their homes on their own which is known as a For Sale by Owner (FSBO). They rationalize that they don’t need a real estate agent and believe that they can save the fee for the services a real estate agent offers.
Many people feel that the Realtor is just an extra layer that really isn’t needed. (Kinda makes me feel bad if you think about it – – because I work reallllllly hard to get my clients the best price possible with the least amount hassle. But I digress!)
However, a study by Collateral Analytics reveals that FSBOs don’t actually save anything, and in some cases may be costing themselves more, by not listing with an agent. 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.”
The study makes several suggestions as to why a FSBO might net less money for their home:
- “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 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.
Conclusions from the study:
- FSBOs achieve prices significantly lower than those from similar properties sold by Realtors using the MLS.
- The data suggests the average price was near 6% lower for FSBO sales of similar properties (coincidence?).
Bottom Line:
As Dave Ramsey, America’s trusted voice on money, explains:
“Research has shown that, between mistakes, lack of negotiating skills, pricing errors and general exposure on the market, you’ll cost yourself more than the real estate commission…You’ll come out slightly better and with a lot less hassle if you use a top-shelf agent.”
So what’s your best bet?
Call Jen Instead! 908-432-0318
Click here to request a free market analysis regarding the value of your home in today’s market.
