It's not a secret that the main reason one chooses to sell his/her own home is to save the Real Estate Commission that comes along with using a Realtor. A new study by Collateral Analytics, however, reveals that selling your own home doesn't actually save you money, in fact many times the FSBO loses more money by not using a licensed Real Estate Agent.
A variety of markets were studied in 2016 and the first half of 2017 and it concluded that For Sale by Owners tend to sell for lower prices than other comparable homes in their market and many times, often below the net commission they would have received after paying a real estate commission.
How could this be if not having to pay a commission?
- Some buyers seek FSBOs in search of a lower bargain price.
- Agents help prepare and offer suggestions for Home Sellers before home goes on the market, therefore higher offers.
- A Realtor will list the property in the MLS and market the home extensively. The more exposure a home gets, the more traffic, more offers, better prices. Could create a bidding war.
- FSBOs achieve prices significantly lower than those from similar properties sold by Realtors using the MLS.
- 5.5% is the average differential in selling prices for FSBOs when compared to MLS sales of similar properties
- The sales in 2017 suggest the average price was near 6% lower for FSBO sales of similar properties.
If you are thinking of selling, FSBOing may end up costing you money instead of saving you money.