What This Study Said About The Value Of Your Agent
In 2017, Collateral Analytics Research did the most comprehensive study in history of the value of your real estate agent.
They wanted to improve on the past studies that couldn’t get a clear picture on price or were limited to one geographic area. The waters were muddied because there was no way to control for differences in property attributes and the past studies were too small to be accurate.
In other words, they used their Automated Valuation Models to compare the sales price to the actual value of the homes across the nation to get an apples to apples comparison.
And here is what they found:
- For Sale By Owners [FSBO] homes sold for less money than through traditional agents
- FSBO homes have a low probability of selling
- Homeowners will net roughly the same proceeds whether they sell through a real estate agent or take the FSBO route
The study concluded agents perform better than FSBO because of their expertise in:
- Staging a home, recommending repairs and getting it ready to sell
- Marketing including exposing the home to a larger pool of buyers
- Incentivizing buyer’s agents for bringing a sale
Here’s one more thing to consider. Buyers look at FSBOs for the same reason sellers try to sell them. They see it as an opportunity to save money.
Actually, its worse than identifying an opportunity. Buyer’s feel entitled to make low-ball offers or at a minimum reduce their offer by the amount of the commission that the seller is expected to save.
Here’s what the experts said about the study
“This makes a strong case for hiring an agent, considering that agents allow homeowners to reduce the work, risk, and time of selling a home, said Dr. Michael Sklarz, CEO of Collateral Analytics.”
“Overall it is clear that FSBOs have a low probability of selling, and if they do they will likely net the same or less after closing issues, plus they are more likely to screw up on disclosures which may lead to lawsuits after the fact, when buyers discover material facts not disclosed,” said Norman Miller, co-author of the study and real estate professor at the University of San Diego.
Here’s my “biased” take on the study.
If at worst you take home the same amount of money whether you list with an agent or sell on your own, then why would you take on the extra work, headaches, and liability.
If you have any questions about the report or want to see a copy, just hit reply and I’ll send it to you right away.
Have an awesome weekend!
The Daily Deal in Nashville is a one story, rustic home on 5 wooded acres in Brentwood [Williamson County] for less than $480,000.