Thinking of Selling Your Own Home? You may want to think again.

by Connie Foley

This is an article I received from a lender, based on a new study by Collateral Analytics. The actual study goes into great detail, with graphs and more analytics, but this is an excellent recap.

One of the main reasons why For Sale By Owners (FSBOs) don’t use a real estate agent is because they believe they will save the commission an agent charges for getting their house on the market and selling it. A new study by Collateral Analytics, however, reveals that FSBOs don’t actually save anything, and in some cases may be costing themselves more, by not listing with an agent.

In the study, they analyzed home sales in a variety of markets in 2016 and the first half of 2017. The data showed that:

“FSBOs tend to sell for lower prices than comparable home sales, and in many cases below the average differential represented by the prevailing commission rate.” (emphasis added)

Why would FSBOs net less money than if they used an agent?

The study makes several suggestions:

“There could be systematic bias on the buyer side as well. FSBO sales might attract more strategic buyers than MLS sales, particularly buyers who rationalize lower-priced bids on with the logic that the seller is “saving” a traditional commission. Such buyers might specifically search for and target sellers who are not getting representational assistance from agents.” In other words, ‘bargain lookers’ might shop FSBOs more often.
“Experienced agents are experts at ‘staging’ homes for sale” which could bring more money for the home.
“Properties listed with a broker that is a member of the local MLS will be listed online with all other participating broker websites, marketing the home to a much larger buyer population. And those MLS properties generally offer compensation to agents who represent buyers, incentivizing them to show and sell the property and again potentially enlarging the buyer pool.” If more buyers see a home, the greater the chances are that there could be a bidding war for the property.

Three conclusions from the study:

FSBOs achieve prices significantly lower than those from similar properties sold by Realtors using the MLS.
The differential in selling prices for FSBOs when compared to MLS sales of similar properties is about 5.5%.
The sales in 2017 suggest the average price was near 6% lower for FSBO sales of similar properties.

Bottom Line

If you are thinking of selling, FSBOing may end up costing you money instead of saving you money.

If that is not enough to convince you, think about all of the services you get from hiring me as your Realtor.

I bring my marketing experience with me, providing professional photos, marketing materials and huge network
Detailed market analysis on your home and pricing strategy
Stage the house for maximum appeal
Bring in professional inspectors as needed
Suggest needed fixes or improvements to justify a higher price
Include all information, photos and videos to all online real estate search engines
Provide a lockbox as easy access for agents
Use all California Association of Realtor contracts to safeguard the transaction
Get as much exposure as possible with open houses and broker tours
Sell your home for the best and highest possible price

For more information, please Contact Me

Please feel free to leave opinions, questions or suggestions.

Thank you!