A new study from Collateral Analytics Research recently published an article examining the price differences for homes sold by Real Estate agents through the MLS compared to “For-Sale-by-Owner” for the 2016-17 calendar year. The study used a variety of geographic markets to collect data. It looked at more than 200,000 FSBO sales and one million MLS sales that took occurred across hundreds of markets in 2016 and 2017.
This topic has been debated and is a constant argument for home owners who feel that the cost of working with a sellers agent is far too high. All FSBO have their reasons for choosing to try and sell the property themselves. They may not have enough equity in their home to afford an agent, some just feel the agents commission is are too high for the services they provide, others just like the idea of saving money and want to try it for themselves. None of these reasons are wrong, but it is interesting to consider the idea that by using an agent, you could save yourself a lot of headaches and even put more money in your pocket by allowing an agent to market your home for sale.
As of August 2017, here in Bucks County, it is no secret we are in a seller’s market. Properties that show nicely and are priced correctly are selling within days of being listed. So, just a heads up to all my FSBO readers out there, if you have your house listed and you haven’t gotten much traffic through, you may want to reconsider how you’re marketing your property.
The data collected by this study indicates “homeowners will net roughly the same proceeds whether they sell through a real estate agent or take the FSBO (for-sale-by-owner) route.” Teke Wiggin reported from inman publications.
“That’s because agents tend to achieve higher sales prices for properties than comparable FSBO listings — enough to offset their commission fee”.
Since working with an agent can dramatically reduce the work, risk, and time of selling a home, homeowners should consider carefully if they are prepared and capable of handling such a complicated type of transaction. Norman Miller, a real estate professor at the University of San Diego who produced the study with Sklarz commented “Overall it is clear that FSBOs have a low probability of selling, and if they do they will likely net the same or less after closing issues, plus they are more likely to screw up on disclosures which may lead to lawsuits after the fact, when buyers discover material facts not disclosed,”.
What they found was that on average, FSBO listings sold for about 5.5 percent less than comparable properties sold through the MLS. Surprisingly, the average commission for a tranaction here in Bucks County as well as most areas in the country is 5.5%.
So how is that possible? Well, if you’re working with a good agent, they will be able to maximize the exposure for the home by getting it out to the large market of buyers. They can also advise you on the types of repairs that would be worth doing in order to get the most return on investment. Plus they can give you tips or provide recommendations for staging your home to help it show the best.
Considering most FSBO are willing to work with a buyers agent and pay a 2.5-3% commission, it makes you consider if the other 2.5-3% of that is really something worth fighting over. Working with an agent really can be a huge benefit considering the potential to sell the property for a higher price, plus all the headaches, time and paperwork your agent can help you with.