This statistic drives me crazy every time I see it misused and misunderstood.

While it's certinaly possible that agents can get more value for a given property than laypeople,m that's NOT why this statistic is true.

the #1 reason FSBOs sell for less on average than agent-marked properties is because sellers at teh high end are less likely to go FSBO in the first place. Thus the high end of the market is more likely to use an agent, and this drives up the average for agent-marketed properties.

I'm not going to give a statistics lecture here but the the issue at play here is dissimilar samples.

That pretty much sums it up.

I'd rather be paid to do the dirty work than use stats showing agents are better than people that are often more educated and better at marketing than the typical agent.

Selling houses is easy but it can take a lot of time spreading out over weeks and months. I get paid because I have the time.

Anybody can do the work themselves but they don't have the time or desire to do it.

Ever read the book, "How to lie with statistics"?

Hmm last FSBO listing I got netted the seller $3000 extra dollars after ALL fees where paid. I got a big thank you even though they where rough on me becuase the closing date got moved back 3 days due to the buyer being sick. Yes this is only one case but non represented sellers often price thier homes wrong either too low or too high.

fantastic post

Everyone knows that the average distorts the value, because of some high end sales thrown in, but what's the median price? That should give a more accurate figure if FSBO homes sell for less.

"""""""Everyone knows that the average distorts the value, because of some high end sales thrown in, but what's the median price? That should give a more accurate figure if FSBO homes sell for less."""""""""

I don't think the median is a good enough indicator. It woud have to be the median of comparably sold properties at roughly the same time period.

I think the flaw in the statistic is that FSBO's are likely to sell for less because they are priced less to begin with. The real statistic would be what FBSO net profit relative to agent sold homes net profit for the sellers. Sellers price in the agent costs when using an agent. If I am going to sell FSBO, I would sell for less because I wouldn't be paying an agent. When I sold my condo FBSO, I built in the price of the co-op for the buyers agent. I would have priced it higher if I used a listing agent. My home sold in the first week with 2 offers by the way.

A property is worth what it's worth. The buyers don't care if you're paying an agent or not, they don't care how much equity you have in the place, they don't care how much you spent on it last year, they don't care if you're going through a divorce or just won the lottery. It's worth what it's worth.

If you listed it for 3% less than if you had an agent and it would have just as quickly have sold for 3% more then you kind of shot yourself in the foot.

I run a FSBO website. www.ByOwnerNation.com. I work with FSBOs and FSBOs only so I think I can be considered reputable when I talk about this subject.

I agree that FSBOs only sell for less, because their homes are worth less in the long run.

The line that many people like to use, that I made a FSBO $3000 more because they used me is just not true. Yes, it may happen sometimes, but then again, sometimes anything can happen. Including you making them less most of the time.

The truth to the matter is that when someone decides to sell by owner, it's because they want to make more money and not pay a commission. That's it. So tell me, why would someone decide to sell their home on their own, just to give somebody they will never talk to again a great deal on their home? It doesn't make scense. If that was the case, everyone would just use a Realtor and pay the commissions and come out with the same money.

The ONLY reason a FSBO would sell for less to a comparable home, is because the FSBO didn't know the market or didn't do their homework. If they thought it was worth more, they would have sold it for more.

Someone selling by owner is ONLY doing it to make more money, no other reason, so buyers thinking they can get a better deal from a FSBO is going to sadly mistaken. At least that's the case 95% of the time.

But hey, SOMETIMES, anything can happen.

But many of the buyers who go to FSBO's know they are not paying commission and offer less. A few of my friends ( before I went into RE) bought some only because they knew they could get them for less.

Lets all turn in our key cards and our Realtor pins. FSBO's have taken over and we are not needed anymore.

Lets face it people

There are many people in this country who have needed us in the past and who will in the future.

I dont do my taxes, I dont change my oil, I dont cut my grass, I dont shovel snow.

I dont do these things because either I dont want to or I know SOMEONE CAN DO IT BETTER!

These anti-Realtor posts on here are damn silly. If you dont want to be a Realtor or have nothing POSITIVE to say, why dont you just go to another site and stop wasting your time?

The 2005 NAR Profile of Buyers & Sellers answers most of the issues raised:

* The median price of unrepresented sellers is 16% less than the median price for properties represented by agents.

* Most importantly, in 2005, the data indicates that both universes of homes are IDENTICAL. The idea that agent-represented homes are different is simply false.

* The reasons for the disparity are three-fold: 39% of non-agent represented homes are sold to someone that the seller already knows. Agents provide greater exposure. And, not least, agents do have some expertise in pricing, negotiating and closing deals.

The bottom line is that agents DO provide value to the transaction --- and the data shows that value in dollar terms.

Thank you staggart, I knew there was SOME reason I can make a living off being a Realtor. Maybe some of these "negative Nancys" will get a clue.

You guys have convinced me. I will start quoting the mean as well as the standard deviation. I will throw in the variance for sport.

By far the #1 reason a buyer goes to an FSBO is because they're interested in that particular house. The idea that they might be able to save a few thousand bucks isn't a major issue for most buyers.

For example, I sell all of my houses myself. You can call me an FSBO if you want but really I'm a professional seller. I always price my houses well above the highest comparable sale and I always get it, sellers market or buyers market, it makes no difference. I have never once received an offer for less than my price.

IF you can do that for your clients, and you make it an easy and painless process to sell their home, THEN you absolutely deserve your commission.

But most agents are incapable of offering that kind of skill and service because they haven't been trained and haven't taken it upon themselves to learn. Why bother when you can quote a bunch of twisted statistics and deceive people into letting you punch a few numbers into a computer and let someone else sell the house for you?

The thing that amazes me is that after all of this, the way you treat the people you're supposed to represent, you have the audacity to complain that people hate you and your "profession" HAH!

last FSBO listing we got will net seller
35k more than he was asking for..5 offers and all countered..seller to decide which offer to accept since all 5 accepted counter offer.

The average consumer doesn't know a realtor from a real estate agent but that doesn't mean that all fsbos are any less informed than the typical agent. I've seen stats that both ways and it's entertaining at times to read them.

If you're going to pitch the realtor is better than fsbo line be prepared for the smart sellers to throw back some numbers too.

All a seller has to do is show a comparable fsbo property that has sold more or equal to that of a realtor and you basicallly lose. OTOH, if you come straight and say hey look you can sell it yourself but do you really want to?

You make money by selling convenience and hassle free. You don't make money by insulting the clients intelligence. Whether you are right or not you will not win.

The comment above was insightful.

Even though I believe the data does paint a powerful picture, general patterns are not determinative with respect to a specific unrepresented seller.

While I may sincerely believe that a seller is likely to pocket less, he or she may feel otherwise based on individual experience or the efforts of neighbors.

As mentioned in the proceeding comment, the key for a real estate professional is the idea of making the process easier and more convenient.

I've told my agents that an individual moving out-of-the-area has more important things to do than sell their house. I suspect we need to emphasize that point more.

I think much of the venom in this discussion comes from two key points:

* Sellers often feel they are being personally insulted by the real estate community's general disdain for for-sale-by-owners.

* Agents hate beeing dismissed as not providing a valuable service perceiving it as trashing of their hard work.

Fundamentally, for-sale-by-owners and the real estate industry need each other. Most FSBO sellers end up listing. Many allow agents to bring buyers. And, most agents end helping for-sale-by-owner sellers into their next home or selling the home of the FSBO seller's buyer.

In the residential market, folks have options. I think we need to be respectful of their individual choices and provide assistance where we can.

A little less snideness on all sides is needed.

Don't forget the T-scores.

staggart, very well articulated, sir. Bravo!