Wednesday, May 03, 2006

Using a real estate agent saves time AND money

Why do people decide to sell their home on their own? The majority of FSBOs (53%, in fact) are done because the seller does not want to pay a commission fee to an agent or broker.

But based on that same research, FSBO sellers actually LOSE money by selling their home on their own, even after the agent's hard-earned commission has been paid.

According to NAR's most recent Profile of Home Buyers and Sellers, the median selling price of a home sold with the help of an agent was $230,000. That's 16% higher than the median price of a FSBO sale, which was $198,200. According to the data, there are no measurable differences in these figures based on different types of homes or region.

Now, let's assume there was a 6% commission paid on that $230,000 home. That's still just $13,800. If the difference between a seller-assisted sale and a FSBO sale is $31,800, then the FSBO seller LOST $18,000 on the sale.

That's a new car. A ski boat. A year or two of your kid's college expenses. Not to mention eliminating heartache, hard work and countless hours FSBO sellers go through trying to price the home right, market it themselves, wade through the paperwork and disclosures, etc.

Further proof that working with a real estate agent pays off in the end.