Inman News, a popular source of industry news for real estate agents, recently published an article title “Agents sell homes for more than FSBOs: study”. In this article, the author cited a study done by Collateral Analytics which revealed that homes sold by real estate agents sold for a mean of 5.5% more than FSBO’s (for sale by owner’s).
Being the usual skeptic that I am and also being unwilling to promote industry propoganda just because it sounds good, I decided to attempt to do an analysis of my own based upon the St Louis market. So, what I did, was pull the sales for the past 90 days from the tax records for St Louis County of homes sold in the $150,000 – $250,000 price range (the bulk of the market), then matched up the sales with MLS listings to find the ones that appear to have been listed with a REALTOR versus the ones that were not.
I ended up with 728 sales for that period in St Louis county, 654 of which (90%) appeared to have been sold using a REALTOR, with the other 10% selling without the benefit of a REALTOR. Granted, without checking each sale individually it is impossible to say whether all of the remaining 10% were in fact FSBO’s but I think I have pulled a large enough dataset to allow for some errors but still be accurate overall.
The data shows that homes that were listed with REALTORS sold for a median price of $195,000 which was a median of 118.5% of the county’s assessed value (which is what I used for the benchmark). The listings sold FSBO, sold for a median price of $190,000 and at a median of 111.5% of the county’s assessed value. So, homes listed with a REALTOR sold for 7% more than FSBO’s. Given that the typical listing commission is less than 7%, seller’s that list with agents come out ahead financially even after taking into account the commission and they avoid the hassle, headache and risk of doing it on their own.
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