If you need assistance, please call 303-222-2131

Selling Your House on Your Own Could Cost You

Sunday, May 27, 2018   /   by Scott Goodnight

Selling Your House on Your Own Could Cost You

20180524-Share-STM.jpg

In this extremely hot real estate market, some homeowners might consider selling their homes on their own which is known as a For Sale by Owner (FSBO). They rationalize that they don’t need a real estate agent and believe that they can save the fee for the services a real estate agent offers.

However, a study by Collateral Analytics 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. 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 had 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 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.

Conclusions from the study:

  1. FSBOs achieve prices significantly lower than those from similar properties sold by Realtors using the MLS.
  2. The data suggests the average price was near 6% lower for FSBO sales of similar properties.

Bottom Line

As Dave Ramsey, America’s trusted voice on money, explains:

“Research has shown that, between mistakes, lack of negotiating skills, pricing errors and general exposure on the market, you’ll cost yourself more than the real estate commission…You’ll come out slightly better and with a lot less hassle if you use a top-shelf agent.”

Hudson Stonegate Team | Coldwell Banker Residential Brokerage
Scott Goodnight
8501 Turnpike Drive, Ste 211
Westminster, CO 80031
303-222-2131

Information and Real Estate Services, LLC. Provided for limited non-commercial use only under IRES Rules. © 2019 IRES. Listing information is provided exclusively for consumers' personal, non-commercial use and may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing. Data last updated October 21, 2019 12 AM. Information deemed reliable but not guaranteed by the MLS or Scott Goodnight - WinBack - Coldwell Banker Residential Brokerage - Hudson Stonegate Team.
The content relating to real estate for sale in this Web site comes in part from the Internet Data eXchange (IDX) program of METROLIST, INC., DBA RECOLORADO®. Real estate listings held by brokers other than Scott Goodnight - WinBack - Coldwell Banker Residential Brokerage - Hudson Stonegate Team are marked with the IDX Logo. This information is being provided for the consumers’ personal, non-commercial use and may not be used for any other purpose. All information subject to change and should be independently verified.
REcolorado® Terms and Conditions
The real estate listing information and related content displayed on this site is provided exclusively for consumers' personal, non-commercial use and may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing. This information and related content is deemed reliable but is not guaranteed accurate by the Pikes Peak REALTOR® Services Corp.