Lower Selling Price FSBO vs Agent Represented
a. this is repeated often but is not supported by reality. Will a real estate broker really generate $60k more net after commissions on a single house? No. Causation does not mean correlation. Quoting from the NAR, "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 reflect/support the local market; this is a logical fallacy being used to mislead and confuse sellers. The NAR should cease using this misleading statement.
b. If a car salesman (real estate broker) sells Ferrari's and another (FSBO) sells Fords, 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.
c. An economic study, which controlled for the Madison, WI local market, 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.
d. An anecdotal example, actual sales activity: Two similar homes, in my market, on the same street, sold within 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.
Let's assume the FSBO buyer had representation, so the only commission savings is on the listing side. For example’s sake, assume a 2.5% listing commission. The FSBO property netted $5,600 more. Certainly not $60k more. This is not the exception to the rule. I have seen many seller's experience similar equity savings.