For Sale By Owners Net Significantly Less

Dated: 08/24/2017

Views: 69

For-sale-by-owners tend to sell their homes for lower prices than homes sold through traditional agents via the MLS, and in many cases below the average differential represented by the prevailing commission rate, according to a new study by Collateral Analytics.

The study examined the price differences between homes sold through traditional agents versus those sold by FSBOs from 2016 to the first half of 2017.  Some homeowners may be tempted to try to avoid commission costs to a broker and try to sell the home on their own. But that can backfire and turn into a much lower sales price, the study found.

Even successful FSBO sellers achieve prices “significantly below” those from similar properties sold more traditionally via REALTORS®, the study found.  The authors found that the differential in selling prices for FSBOs when compared to MLS sales is “remarkably close to average commission rates.” A FSBO sale, on average, nets nearly a 6 percent lower price than an MLS sale for a similar property.  “Assuming that both buyers and sellers pay the commission, one might have expected something less than this average,” the researchers note. “It appears that many sellers are avoiding commissions while netting home prices less than they would with an agent-represented MLS sale. They are avoiding commissions at any price, even one that exceeds a commission rate.”

Blog author image

Noa Porter

Noa has been exceeding the expectations of his clients since launching his real estate career in 2003. His client list includes CEO's of Fortune 500 companies, senior biotechnology executives, profes....

Latest Blog Posts

Loan Limits Increased Greatly For San Diego County Residents

On November 28, 2017, the Federal Housing Finance Agency announced that it would raise the baseline conforming loan limit for 2018, for most counties across the country. They are also increasing

Read More

Inc 500 Ranks Big Block Realty Fastest Growing Private Real Estate Brokerage In America

Inc. magazine today ranked real estate brokerage BIG BLOCK REALTY NO 26 on its 35th annual Inc. 5000, the most prestigious ranking of the nation's fastest-growing private companies.

Read More

California Association Of Realtors 2018 Market Forecast

With the economy expected to continue growing, housing demand should remain strong and incrementally boost California's housing market in 2018, though a shortage of available homes for sale and

Read More

Home Sales And Median Prices Rise Throughout The State

California’s housing market defied gravity as existing home sales and median home price registered increases on both a monthly and an annual basis in August, the CALIFORNIA ASSOCIATION OF®

Read More