Real Estate Blog - What it Costs to Sell Without a REALTOR®

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What it Costs to Sell Without a REALTOR®

The National Association of REALTORS® (NAR) says its $31,800.

(LAKE TAHOE REAL ESTATE BLOG) Because some NAR stats come out every two years, we suspect there will be an update on this information soon, but at last report the NAR cites that the average seller who uses a real estate professional makes 16 percent more on the sale of their home than do sellers who go it alone.

The truth is real estate professionals do a lot more for a seller than just make a transaction go easier. We could write a book on the things we do as professionals to help both sellers and buyers. In fact many already have.

There's more we do than make more money too. There are many details and specific things that we do to help a family with a home, but normally the varied things we do fall into broader concepts such as saving time, reducing stress, making more money and reducing risk of liability and litigation.

When it comes to how much more money a real estate professional gets for selling a house, we don’t know for sure how much more that is here in South Lake Tahoe. Sometimes it is a lot more, and we will be specific about that with examples in two of the three articles to follow.

There are times too, when we get only a little more than an owner could, and also times we suspect when we probably get about the same. What we are saying here is there is no way one can prove, or disprove on average how much more, or less, we get for a sale than what the NAR reports. Overall, we just know it is more.

In all cases though, we do save stress, time and substantially limit risk, all of which have value.

Here is an article from the NAR about this, and because it was presented in a public forum, there is naturally much debate, all of which is found in comments that follow the article.

We thought it would be interesting and helpful to you to read the discussion in its entirety. It was a most interesting read for us.

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Posted by Gary Bolen (CRS) Lake Tahoe Real Estate Information on 03/17/2008 06:12 PM

Comments (49)

nar statistics, south lake tahoe, real estate agents, realtors

Originally posted at: Lake Tahoe Experts: What it Costs to Sell Without a REALTOR®

This post has been included in California Information El Dorado County, CA Information South Lake Tahoe, CA Information

49 Comments on What it Costs to Sell Without a REALTOR®

MAR

2008

That is a great article. Thank you for sharing. I will have to show my clients.

Bookmarked!! i LOVE this and it expresses in a nutshell what I'm always trying to convey to sellers who are sitting on the fence because of RE fees. If they were only able to do the math and see the difference. Nicely articulated guys!

Fastest time from posting to feature. Nice job.

I am going to add your facts to a class I teach! Get job!

Gary, I sat in a ladies living room today explaining just that! She really wants to sell it herself. I gave her the reasonable price after doing comps and I have a feeling she's going to try to sell it first anyway. She told me that her pride was getting in the way.

So, I asked her how much that pride was worth? I left her with that! Wish me luck.

In all cases though, we do save stress, time and substantially limit risk, all of which have value.

Exactly! Who can put a dollar value on stress, time and risk?

Gary, Interesting article from NAR. I'm pretty sure it is not that much and regardless something like 95% eventually list.

The topic that will always be debated -- always has been, always will be.

What always fascinates me though is the debate like there is no choice. There are always choices and always have been.

Regardless, At the end of the day, Your "Bottom Line" says it all!

(And something tells me that part about "Reduce the Risk of Litigation" is going to become an even more important topic in the years to come which can be far more expensive then any commission.)

That is a good point about reducing the seller's risk in the transaction. I will definitely read the article you noted in your post. Many sellers don't understand all that goes into selling a home and just how hard their Realtor actually works.

Although we generally do improve their bottom line, it's definitely not "all about" the bottom line. There's stress, risk, hassle. All these are worth $$.

Excellent post...great information....

I agree with you. There is so much more than just the sales price. The liability can be a great cost to bare.

Good post as always boys, thanks for sharing. Got the article book-marked to save and use as needed.

Well, lets remember with FSBO the seller want to save the commissions. FSBO buyers typically are looking for a deal and want to save it to. Most likely a wash and tons of headaches for buyers and sellers.

But check this out, which I ran across today onlie

http://www.youtube.com/watch?v=LWU0W-4L9P0&feature=PlayList&p=ACC995D843FBA113&index=1

get to minute 3 and see what is recommended for FSBOs when pricing their homes by a huge national company(or so they claim). You will think twice about your next "free cma" appt. Guaranteed

That NAR study has enough holes to drive a truck through. The methodology is poor at best. Of course, the studies from the other side (Madison, WI and Stanford) are just as flawed.

But, I have talked with a few of my clients and they agree that the real reason to use an agnet has more to do with efficiency than net price.

Great post. This is one more article that I can use to justify my services. Thanks.

Is there any reason the seller couldn't just pay $500.00 for an appraisal to get the listing price right? Maybe another few hundred for a good real estate attorney to draw up the papers? That leaves staging and marketing. But the $18,000.00 or so savings on a $300,000.00 property would be fairly significant. And an appraiser will be more accurate in valuing the property.

I like your blog. I read this on your main website a few days ago and bookmarked it. You guys have great content!

SteamboatHomeSales.com

I think the NAR would do itself a great service by posting the methodology behind the numbers. By not doing so, they get the normal skeptical reaction from the public.

Patrick - Thanks much for your comment and question. As you know, one can get three different numbers from three different appraisers. In an up market, houses often do sell at pre-appraised value. In may buyers markets across the country right now, houses are selling for less than appraised value.

In our market, appraisers often call us to help verify their assumptions. You may be correct in the market you are in, but here, value is often so varied, because of lake and forest views and many other non quantifiable factors, most top tier agents are quite often as good as most appraisers in predicting value. And sometimes too, all of us are way off. There are some places up here that are so unique compared to all others than a pre-appraisal, or evaluation from any of us, is little more than an informed guess.

Thanks again for taking your time to comment, and its both valuable and appreciated.

cheers

I think that the costs go beyond what you even say. However, I do feel that these numbers are pretty revealing.

Gary, great article. This is great ammunition for listing appointments with fsbos and I will be sure to use. Thanks for posting.

Price is what you pay. Value is what you get - Warren Buffet.

If you do a good job of explaining this to your customers...they will list with you.

Great article.....I even pulled the NAR article. Thanks again.

I sure would like to know exactly how this figure was derived. It seems a little 'convenient'...

Using a Realtor is expensive, considering the commission structure. I understand it is our business model, but it is claims like these from the NAR that can quickly turn off clients. A Realtor brings management skills, knowledge of the complete transaction, and protection to their clients, but they certainly can't do too much to drastically alter what a ready, willing, and able buyer is going to bring to the table.

Putting out numbers like this puts the emphasis on the wrong benefits of using a Realtor, IMHO...

Thanks for a great post! Congrats on being featured!

To your success,

Susan

MAR

2008

Great stats, thanks for sharing this information.

Rich

Long Realty Company

I'm going to share this with the next fsbo I run into Good job

I would love to know how they arrive at that figure?!?!? I like the quote by Kristi.... we do add VALUE!!!

Enjoyed this information (and the NAR link). You made the news too! Thank you.

Thanks for sharing your thoughts. It will make some people think about what they are doing.

I am not sure how it is in other markets. In our market I have not seen hardly any owners that were very successful trying it on their own.

The problem they run into is the colliding of two opposite worlds. Buyers without an agent are looking for a deal. Sellers without an agent are trying to make more money.

Only 16%?...that seems a bit low these days...but hey sellers take on the liability if they sell it themselves and don't have the proper representation.

Thanks for digging up this old article and sharing it with us. NAR publishes some interesting data that we could use, if only we took the time to find it!

Gary - There will always be those that want to sell it themselves. Always. You offer valid reasons why this may not be the best course of action for some. The argument falls apart when you quote the NAR. The level of accuracy they offer is minimal. My confidence in their methodology does not exist. If Larry Yun were sitting here, telling me that I am typing.... there is no way I would believe it.

Nicely put together.

One of the first set of comments on NAR's post caught my attention.

"How about you provide your methodology and data to back your sensational headline instead of fluffing this entire piece with advertising? You make an incredible claim, but provide only a single sentence to back that up?.... Provide the methodology that the NAR used to determine this figure, as well as the dataset used to calculate it."

I agree they should provide more information. There are a lot of factors that could impact that... the chosen listing price, the area of the country, or is it costs of time with appointments and buyers or is it litigation etc. I agree that I am more likely to get benefit from such a piece when they share the reasoning behind the figure.

Thanks for the info very appropriate for our market thanks for the article.

Interesting blog, our average sales price in my area is 105,000, I know we are not saving them $31,000 but we are doing the other things like saving time, stress and just working it out.

Interesting and certainly information I will use in the very near future!

Thanks for Sharing

kathyfisher@remax.net

Gary that is a great Real Estate article. I have had it as a link on my Squidoo page for the last year!

It would be nice if ALL sellers saw that we have value as agents. We just have to keep showing them that we do have it and not take our value for granted.

Great article. Of course, the article would tell sellers that hiring a realtors will make them more money when they sell.

Gary - Great article. I did look at the NAR article you linked and read all the comments. I have to agree...quite fascinating. I have to say you said it best in this post. How much do we save? Who knows, but listing the value we provide our clients is very important. And that's what sellers who list with us are paying for. I always wonder if it would be good to find a couple articles that tell a story about the unrepresented seller who was sued for not disclosing some info, and including that article in the pre-listing packet to FSBOs.

We as Realtors need to do a better job of letting potential clients know all the parts of the transaction we help them with...and how each affects the bottom line.

Great post with good content and easily presented. Thumbs up! Keep 'em coming....

Great post, hopefully some sellers are reading this..

Thanks for the post. I have to agree with those who want more data, though. NAR touts this statistic every year or so, with no methodology to back it up. For that reason, I never use it in my presentation because I would be caught in the headlights if anyone called me on it.

Ask yourself these questions:

In non-disclosure states, where sales prices are not placed into tax records, how in the world could the NAR possibly know what FSBOs sell for?

Even in disclosure states, where the sales amounts are public, a nominal amount, such as $10, ends up in the records when there are related-party sales, refinancings, etc. Has the "FSBO" data been cleaned up to get rid of that lowering effect?

Has the NAR spent the incredible time and effort that would be required to match all MLS sold property addresses, including misspellings and abbreveiations, to the correct tax record so they can be sure they're counting the right sales as FSBOs vs agent sales?

If so, how did the NAR get the tax records anyway?

Plus, the folks above who mention that owners of more expensive homes may be more inclined to use agents have another good point.

I just don't think it's good data. If it's a legit number, they should find it easy to explain and document. I'm guessing they did a phone survey or something. Hmm, a limited study funded by an organization likely to benefit from it, which results in that organization looking good. Nope, not buying it on face value.

Anyone who knows the methodology, feel free to stomp on me and tell me where to look. I'd love to use this number if I trusted it.

You bet, we're worth it!!! I've bookmarked & saved this jewel!! Love the VALUE that is attached here. Thank you, Thank you, Thank you!!!!!

MAR

2008

Hey... I've been undercharging! :-) Thanks so much for the info... this is awesome stuff.

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