Selling Your Home Could Cost You!

Thursday, May 24, 2018   /   by Nicole Solari

Selling Your Home Could Cost You!





Selling Your House on Your Own Could Cost You


In this extremely hot real estate market, some homeowners might consider selling their homes on their own which is known as a For Sale by Owner (FSBO). They rationalize that they don’t need a real estate agent and believe that they can save the fee for the services a real estate agent offers.


However, a study by Collateral Analytics reveals that FSBOs don’t actually save anything, and in some cases may be costing themselves more, by not listing with an agent.


In the study, they analyzed home sales in a variety of markets. The data showed that:



“FSBOs tend to sell for lower prices than comparable home sales, and in many cases below the average differential represented by the prevailing commission rate.” (emphasis added)



Why would FSBOs net less money than if they had used an agent?


The study makes several suggestions:



  • “There could be systematic bias on the buyer side as well. FSBO sales might attract more strategic buyers than MLS sales, particularly buyers who rationalize lower-priced bids with the logic that the seller is “saving” a traditional commission. Such buyers might specifically search for and target sellers who are not getting representational assistance from agents.” In other words, ‘bargain lookers’ might shop FSBOs more often.

  • “Experienced agents are experts at ‘staging’ homes for sale” which could bring more money for the home.

  • “Properties listed with a broker that is a member of the local MLS will be listed online with all other participating broker websites, marketing the home to a much larger buyer population. And those MLS properties generally offer compensation to agents who represent buyers, incentivizing them to show and sell the property and again potentially enlarging the buyer pool.” If more buyers see a home, the greater the chances are that there could be a bidding war for the property.


Conclusions from the study:



  1. FSBOs achieve prices significantly lower than those from similar properties sold by Realtors using the MLS.

  2. The data suggests the average price was near 6% lower for FSBO sales of similar properties.


Bottom Line


As Dave Ramsey, America’s trusted voice on money, explains:



“Research has shown that, between mistakes, lack of negotiating skills, pricing errors and general exposure on the market, you’ll cost yourself more than the real estate commission…You’ll come out slightly better and with a lot less hassle if you use a top-shelf agent.”







  real estate, home ownership, homebuyers, real estate agent, homes for sale, buying, realtor, selling, finances, first time home buyer, moving

The Solari Group
Nicole Solari
DRE# 02014153

Solano Location
4820 Business Center Drive, Ste 140
Fairfield, CA 94534
707-486-5400

Napa Location
1700 2nd Street Suite 222
Napa, CA 94559
707-819-9119

IDX Content is provided via the Internet for consumers’ personal, non-commercial use. Variable Price’ indicates the seller is willing to entertain offers within a Listing Price Range. All measurements and all calculations of area are approximate. Information provided by Seller/Other sources, not verified by Broker. All interested persons should independently verify accuracy of information. Provided properties may or may not be listed by the office/agent presenting the information. IDX provided by Commissions Inc. Data last updated:October 23, 2019