Thinking You Should FSBO? Think Again [INFOGRAPHIC]

Sellers go FSBO because they do not perceive the value of the commission being charged.  It is about the money. The industry needs to be open to providing alternative solutions to meet their needs.  Flat Fee Listings, Hourly Fee For Services, and Real Estate Consulting offer the seller additional choices to meet those needs while saving their equity.  All of the issues mentioned can be addressed by a real estate broker/agent who is open to alternatives beyond the legacy commission compensation system.

Sellers Net More Using a Real Estate Agent/Broker is repeated often but is not supported by reality.  Will a real estate broker really generate $39k more on a single house?  No.  Quoting from above, "This doesn’t mean that an agent can get $39,000 more for your home, as studies have shown that people are more likely to FSBO in markets with lower price points.".  Large macroeconomic data (the United States FSBO sales data) does not support the local market; this is a logical fallacy being used to mislead and confuse sellers.

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.  Note, the study also has some caveats to the conclusions. 

An anecdotal example, actual sales activity: Two similar homes on the same street sold within weeks (33 days) of each other; one FSBO, one agent represented.  House 1 FSBO, 1,140 sq ft, 2 bed 2 baths sold for $224,000, sold June 1.  House 2 Agent, 2 bed, 2 baths, 1,190 sq ft, sold for $224,000, sold April 28.  We will even assume the FSBO buyer had representation, so the only commission savings is on the listing side.  For example’s sake, assume 2.5% listing commission.  FSBO property netted $5,600 more.  Certainly not $39,000 more.  And this is not the exception to the rule. I have seen many situations experience similar equity savings.