Agents tend to achieve higher sales prices for properties than comparable FSBO listings, enough to offset their commission fee, according to a recent analysis. Academic research has often cast doubt on the value of real estate agents, but a new study will come as music to their ears. It suggests that homeowners will net roughly the same proceeds whether they sell through a real estate agent or take the FSBO (for-sale-by-owner) route. That’s because agents tend to achieve higher sales prices for properties than comparable FSBO listings — enough to offset their commission fee, according to an analysis released by automated valuation model (AVM) provider Collateral Analytics. This makes a strong case for hiring an agent, considering that agents allow homeowners to reduce the work, risk, and time of selling a home, said Dr. Michael Sklarz, the CEO of Collateral Analytics and a co-author of the study. “Overall it is clear that FSBOs have a low probability of selling, and if they do they will likely net the same or less after closing issues, plus they are more likely to screw up on disclosures which may lead to lawsuits after the fact, when buyers discover material facts not disclosed,” added Norman Miller, who produced the study with Sklarz and is a real estate professor at the University of San Diego. The study looked at more than 200,000 FSBO sales and one million MLS sales that took place across hundreds of markets in 2016 and 2017. They found that on average, FSBO listings sold for about 5.5 percent less than comparable properties sold through the MLS, with FSBO listings tending to sell for a little less than their automated valuations and MLS listings tending to sell for a little more. The valuations were generated by Collateral Analytics’ software.
- Inman News, August 16, 2017