Think FSBO Will Save You Money? New Study Says Otherwise

By
Real Estate Agent with RE/MAX Professional Associates

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.

 

 

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Rainmaker
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William Feela
WHISPERING PINES REALTY - North Branch, MN
Realtor, Whispering Pines Realty 651-674-5999 No.

Not knowing the laws will cost you a ton of money if you good up

Oct 12, 2018 11:59 AM #1
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Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
Charlotte Homes for Sale - Charlotte Neighborhoods

It's been shown time and time again that FSBO's cost homesellers time and money in the long run. Realtors earn their commission through pricing and marketing.

Oct 12, 2018 12:29 PM #2
Rainmaker
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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 generally lower priced manufactured homes in their analysis.  Lower priced homes tend to FSBO more often.  The NAR could remove the manufactured homes from the study but then, more than likely, the results would not be as dramatic.

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.  

Nov 10, 2018 04:22 PM #3
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