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[...] Source: http://economistsoutlook.blogs.realtor.org/2011/10/07/fsbos/ [...]
This is good information when working with FSBOs, but I have a question. You state that the median sold price for FSBOs is lower than for all properties, but have you removed the possibility that FSBOs tend to be at lower price ranges? This could account for the same difference.
Jim, thanks for the comment. Yes, that is true, FSBO homes also are more likely to be in rural areas, and are more likely to be mobile or manufactured homes. However, the lower price is also related to the FSBO seller and buyer relationship – many sellers and buyers are friends and family and set the price as the contract is drawn up.
[...] FSBOs. [...]
Jed . . .
I too support that a simple price comparison between conventional transactions & FBSO’s would result in skewed data. The mentioned 28% does not paint a true picture.
Our Houston Assoc. of Realtors (H.A.R.) cites the differential to be 15-16% some 2.5 times the market commission rate. And in over 90% of FSBO transactions, the Buyer uses licensed representation who earn a 3% commission.
My early ‘business plan’ focused primarily on FSBO’s in urban subdivisions, no manufactured homes. A FSBO sign in the yard meant they wanted to sell (no farming) and as our Texas transactions became more complex, it seemed reasonable that FSBO’s might need some ‘help.’ Most did!
Over some six years serving the FSBO niche, I find the #1 reason for a FSBO was PREVIOUS POOR PERFORMANCE BY THEIR AGENT/BROKER. Cost of commission ranks 3rd!
As an Independent Broker/Brokerage, I shaped my plan to be ‘commission rate responsive’ and offered a written “Service Performance Guarantee.”
On average, 3 out of 4 FSBO’s contacted sought my representation. Of the 3, I qualitatively selected but 2. Then further, 1:3 Listing Contracts results in an Intermediary transaction.
In summary, FSBO’s prepresent a unique market niche; generate meaningful commissions; and are always open to focused service.
Is that not what we do every day? And did I mention referrals?
Hopefully everyone knows founder and former CEO of ForSaleByOwner.com had to hire a Realtor to sell his condo! Google it to read articles.
but of course, the NAR has nothing to gain by writing (or spinning) this article…..
It may really depend on the home seller’s training and abilities, as well as the market, but I spoke with my R.E. lawyer, and “difficult” is not the word I’d use to attempt to save R.E. fees kind of money!
What also bothers me is that I don’t feel the seller, who pays the bills, get proper representation. The buyers, on the other hand do. Maybe they should pay the realtor!
What I’ve done is posted a rebuttal: http://www.chicagonow.com/getting-real/2011/10/can-a-realtor-really-sell-your-home-for-28-more/ to let people know how wrong this post is. It’s embarrassing that the NAR’s Managing Director of Quantitative Research would a) make a math error in their post and b) totally misinterpret data for the purpose of furthering the agenda of realtors. This is what gives realtors a bad name.
I wish the NAR would post an apology for their share of causing the real estate bubble. They’re quick to point a finger at everyone else, (Mortgage brokers, appraisors, heck, even the stupid consumer who bought their slick sales pitches) but never do they accept any fault for what has occurred in real estate. )And by extension, what they did to our entire economy and country.)
Instead, it’s a lot of spin and a lot of HARD CORE lobbying to the stupid imbeciles in Washington.([Every home sold supposedly creates how many full time jobs? And how many of those purportedly created are commissions for the listing and buying agents?)
Or the entire industry’s patent acceptance of conflicts of interest, like dual agency, or realtors that are also mortgage brokers, or countless other nefarious practices. (Would anyone else walk into court, accused of some crime or another, and ask for the prosecutor to also defend them?)
Or when was the last time anyone heard of a Realtor (R) ever being disciplined or sanctioned for illegal, immoral, or deceitful practices? I guess it just never happens for Realtors (R), right?
In any case, best of luck to all of you out there. Jed, there just might be a politician who needs a good spin doctor like yourself. Nothing quite like incomplete and/or misleading information, so as to forward a false conclusion, right? (After all, if you don’t tell at least one lie a day, you’re not a Realtor (R).)
[...] Won’t I make more money if I sell my home alone? It would appear that way. But according to 2010 NAR statistics, the median selling price of a home for sale by owner (FSBO) was 28% less than agent–assisted [...]
[...] http://economistsoutlook.blogs.realtor.org/2011/10/07/fsbos [...]
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