General Process
Financing
FAQS
General Process
Financials
SHOULD
I USE A REALTOR?
Will I make more money using a realtor? Or selling myself?
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THE DATA
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FSBO Listings vs Realtor Listings
FSBO Listings vs Realtor Listings
An average of 89% of homes in the United States were listed by a Realtor over the last 10 years. Most the homes that are listed on Zillow, Trulia, Realtor.com are secondary pass through feeds from the local realtor Multiple Listing Service (MLS). The MLS websites are where 90% of homes are bought and sold. For sale by owners do not get access to list their home on a MLS.
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There have been a few studies conducted on the profitability of a selling a home by owner vs. using a Realtor. We have aggregated data from 4 sources that have done Nationwide studies on this data. Collateral Analytics study found the least amount of profitability compared to a FSBO at only netting 5.5% more by using a realtor than listing yourself. The National Association of Realtors (NAR) does studies on this year to year. The percentage range in the past has been that Realtors sell homes anywhere from 13%-26% more than a FSBO. In the year 2021 the percentage was 18%. Now the NAR has a conflict of interest : They are financially incentivized to report higher numbers so their members get more clients. So if you cast out the NAR and compare and average of the other three sources we get an average of Realtors selling homes for more than 11% more than FSBOs.
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The most a realtor charges typically to sell a home is 6% (split evenly 3/3% between the buyer and seller agent). Average ranges from 5-6% depending on the area. On the most conservative study, if a seller uses a realtor to sell their home and the realtor charges a 5.5% commission, they would come out of the transaction with the same amount of profit without doing any of the work themselves. The median home in July of 2022 costs 428,000. If a Realtor sells a home for 11% more and takes a 5.5% commission then Americans who use a Realtor to sell on average net more than $23,540 more in profit compared to a FSBO.
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If you search the internet long enough you will find the one study "The Relative Performance of Real Estate Marketing Platforms: MLS versus FSBOMadison.com."
It will claim that FSBOs sell for the same amount as Realtors, but the owners have to put in the work and time which ultimately even the study concedes it may be worth it to pay a realtor at that point.
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We did further research into FSBOmadison.com and saw they are indeed a realty brokerage that will list your home on the MLS if you pay them extra money. This is not a traditional FSBO. It is called a "flat fee" brokerage that will list your home for a minimal flat fee. Some will include an agent looking over a contract with you for their price, but then you do the rest.
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So the one FSBO study is actually not a FSBO study- Realtors are still involved in those homes selling for more.
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A Top-Producing Realtor will provide all of these benefits listed above when selling your home. If they do all of these elements they should make you more money than if you were to sell yourself, even charging a full 5-6% commission. There are Realtors out there who will sell your home for 4% (a 1% commission to them for just putting it on the MLS and a 3% buyer agent commission), but they do minimal work, you essentially pay them for MLS access. These typically are called "flat fee" brokerages like the FSBOmadision website mentioned above. You cannot put a home on a MLS without offering to pay a buyer agent commission, and if you offer less than 3% for a buyer agent many agents will not show your home, essentially mitigating the whole purpose of listing a home on an MLS to reach more potential buyers.
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