Special offer

West Hills- Think FSBO Will Save You Money? New Study Says Otherwise

By
Real Estate Agent with Your Home Sold Guaranteed Realty CalBRE-01797405

When a seller prepares to put their home on the market, they have one of two choices: working with a real estate professional to sell their home, or attempting to sell it on their own (aka "FSBO" - for sale by owner). The reason most sellers decide to go the FSBO route is to avoid paying a commission to a real estate agent. But turns out, FSBO doesn't save money at all. In fact, in the end, it may cost you. According to the 2017 National Association of Realtors Profile of Home Buyers and Sellers, homes sold using an agent sell for significantly more than FSBOs. In fact, the study found that the median price of a home sold by an agent was $250,000, compared to $190,000 for FSBOs—an astounding $60,000 difference. Will you avoid paying a commission fee if you go the FSBO route? Yes. But if your home sells for $60,000 less than it would have with an agent, it's not worth it. The math simply wouldn't add up in your favor.

The Takeaway

FSBO might help you avoid paying a commission to a real estate agent, but when you factor in the expertise an agent brings to the table and the higher price they'll be able to get for your home, FSBO isn't a way to save money. In fact, it's the opposite.

Please feel free to contact me for more information. I will always provide you unique services that gets you top dollar and guarantees you top exposure for your home.

Fast, Reliable and Honest. This is how I conduct my business.

Esperanza Butler Realtor CalBRE 01797405

818 926 5425

Esperanza@esperanzabutler.com

www.esperanza4homes.com

www.FreeFindOutWhatYourHomeisWorth.com

For Sale By Owner Guide

 

Posted by

 

       Esperanza Butler   Realtor®

 

         

 

Serving the Woodland Hills, West hills, Winnetka, Canoga Park, Northridge, Chatsworth, Granada Hills and just about anywhere in the San Fernando Valley.

I want to be the person you come to for help in buying or selling your home.

Comments (1)

Mel Ahrens, MBA, Kelly Right Real Estate
Kelly Right Real Estate - Hood River, OR
Customized Choices for your Real Estate Needs

The NAR statistics vary as the years go by; it was a 13% FSBO/agent variance for 2014.  The NAR study clearly states FSBO's tend to be lower priced homes; macro statistics for the country versus one property in a very local market is not a valid comparison, maybe even outright misleading.  The NAR study also includes manufactured homes, which typically have a lower sales point and are sold FSBO more often.  The NAR study should control for the manufactured homes and provide the results in a transparent manner.  

If a car salesman sells Ferrari's and another sells Fords, we know which one would generate higher sales prices per unit.  Is the Ferrari salesperson better because they generate more money for the seller?  Or they sell higher priced cars?  Which one has a higher sales price when compared to other sales people in the same market (Fords or Ferraris only).  That is a more valid comparison.  Even the worst Ferrari salesperson should generate more revenue per unit than the best Ford salesperson.

An economic study, which controlled for the local market, specific to Madison, WI, showed there was no difference between sold pricing for FSBO/agents. Certainly not what the NAR and real estate sales industry want to hear, let alone disclose.  Yes, real estate agents have been hired for a hundred years in a similar manner. It does not mean it will continue in the same manner going forward. Times change.

A hundred years ago, manned flight was being expanded by creative people looking for new solutions, from waging war to transporting mail, but not yet as mass transportation.  We now have people living in space for long periods of time and routinely transport cargo to them. 

 

The real estate industry needs to realize the consumer is looking for alternatives to the typical real estate commission compensation system. Over time, we can be sure of one thing, change.  Legacy systems will change over time.  The current real estate commission compensation model is a legacy system.  It will change.  Will you quote NAR stats or find the right way to meet your client needs?  We need to listen to what the client is telling us and work with them to meet their needs.

May 06, 2018 08:08 AM