My post on October 9, 2008, entitled, “Six Selling Myths Uncovered” has provided me with a lot of feedback. This was information, as referenced at the bottom of the post, taken from our Keller Williams Camp 4:4:3. One person posed a question debating “Myth #5″ which said that, ” You are better off selling your home on your own and saving money on the commission you would have paid to a real estate agent. ” He said that while he had nothing against Realtors, Myth #5 seemed like a circular argument, so to speak. Its like your Minister telling you that the Bible says to tithe to the Church. Well of course “he” says that. Well, Myth #5 seemed to be the same thing to this gentlemen. So let us bring in some research!
What I was able to find to answer this question was a study entitled, “The 2007 National Association of Realtors® Profile of Home Buyers and Sellers” where according to the NAR, an eight-page questionnaire was mailed in August 2007 to a national sample of 150,000 home buyers and sellers who purchased their homes between July 2006 and June 2007, according to county records. It generated 9,966 usable responses; the adjusted response rate was 6.9 percent. All information is characteristic of the 12-month period ending in June 2007 with the exception of income data, which are for 2006.
What they found was that 8 in 10 sellers said their agent reviewed sales contracts and purchase offers, managed paperwork and contracts, negotiated with buyers and scheduled showings. 75% worked with their agent in determining the asking price, and said their agents coordinated home inspections and appraisals.
The report also found that the level of for-sale-by-owner transactions remains at a record-low market share of 12 percent, the same as in 2006. The level of FSBOs has declined since reaching a cyclical peak of 18 percent in 1997.
The research notes that 4 out of 10 FSBO properties were not placed on the open market as these 39% were “closely held” between parties who knew each other in advance, such as family or acquaintances.
The NAR went on to say that by factoring out properties that were not placed on the open market, the actual number of FSBOs is 7 percent – the rest are unrepresented sellers in private transactions. This is down from 10 percent sold on the open market in 2004.
Now here is the meat of the report. “The median home price for sellers who used an agent was $240,000 vs. $180,000 for a home sold directly by an owner, but there were significant differences between the two. The median price for transactions between parties that knew each other in advance was noticeably lower than those sold on the open market. The median price of an open-market FSBO was $208,000 vs. $142,400 for closely held transactions.” So even with a sales commission or marketing fee of 6% (just to note, not all properties are priced with a 6% marketing fee) the average seller with the aid of a Realtor would have netted $225,600 which is still $17,600 more than the FSBO assuming an open-market transaction net of $208,000.
Stumble It!
Stumble It!
