The National Association of Realtors has started a blog. The lead item today is headlined “The Cost of Selling without a REALTOR?: $31,800.” Pretty scary, huh? Here’s the lead: “Real estate professionals do more for sellers than make the transaction easier. They make them money. In fact, the average seller who uses a real estate professional makes 16 percent more on the sale of their home than do sellers who go it alone. That’s an average of $31,800 per home.” Unfortunately, there’s no supporting data. So it could be that a Realtor actually brings in, on average, $31,800 more per home sale. Or it could be that a few dozen, or few hundred, or few thousand Realtor-sold multimillion-dollar homes skews the average very high compared to FSBO’s, which tend to be cheaper. Or it could be a few dozen other factors.
Realtors Get a Blog
TAGS: real estate, realtors
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It could also be true for the wrong reasons. In hot markets realtors routinely overprice properties and offer seller contributions, to closing costs, improvements, etc. in order to boost the price of homes and gain higher ‘comps’. It’s also interesting that realtors must disclose why a house sold undermarket (usually significantly below) so that other realtors know to ignore that sale in comps.
That is not to say realtors don’t provide real value. There is something to be said to have a professional marketing a house if that person is competent and uses all the knowledge and resources at their disposal, as well as a bag of tricks. But I believe it’s a little closer to break even.
Remember that realtors don’t always make money on every effort. They can have the rug pulled under them by the people who hire them by having realtors compete against each other or doing a FSBO behind the scenes. That can lead to alot of wasted time.
In jest, you can probably have Apple market homes calling them iPod accessories and summarily raise retail prices by 20% or more.
It could also be true for the wrong reasons. In hot markets realtors routinely overprice properties and offer seller contributions, to closing costs, improvements, etc. in order to boost the price of homes and gain higher ‘comps’. It’s also interesting that realtors must disclose why a house sold undermarket (usually significantly below) so that other realtors know to ignore that sale in comps.
That is not to say realtors don’t provide real value. There is something to be said to have a professional marketing a house if that person is competent and uses all the knowledge and resources at their disposal, as well as a bag of tricks. But I believe it’s a little closer to break even.
Remember that realtors don’t always make money on every effort. They can have the rug pulled under them by the people who hire them by having realtors compete against each other or doing a FSBO behind the scenes. That can lead to alot of wasted time.
In jest, you can probably have Apple market homes calling them iPod accessories and summarily raise retail prices by 20% or more.
A real estate agent can raise the price of a $200 thousand dollar home by more than $30,000? As just a gut check, that sounds absurd. The real estate market isn’t completely efficient, but darn, this is so wild that the NAR should get into the business of buying FSBOs and reselling them. I’ll even through some venture capital in if they can prove those numbers!
A real estate agent can raise the price of a $200 thousand dollar home by more than $30,000? As just a gut check, that sounds absurd. The real estate market isn’t completely efficient, but darn, this is so wild that the NAR should get into the business of buying FSBOs and reselling them. I’ll even through some venture capital in if they can prove those numbers!
Wow. So I definitely shouldn’t BUY a house if it’s represented by a realtor!
Wow. So I definitely shouldn’t BUY a house if it’s represented by a realtor!
It’s possible these stats might be accurate, merely reflecting selection bias. I suspect the cross-section of people who choose to sell themselves is skewed toward lower-priced homes.
Imagine the modestly-priced home owner who knows or strongly suspects he’ll lose money (or not make much). He might opt to sell it himself.
Now imagine the other end of the distribution: What’s the likelihood that the owner of a multi-million dollar home will really take the time to sell it herself?
It’s possible these stats might be accurate, merely reflecting selection bias. I suspect the cross-section of people who choose to sell themselves is skewed toward lower-priced homes.
Imagine the modestly-priced home owner who knows or strongly suspects he’ll lose money (or not make much). He might opt to sell it himself.
Now imagine the other end of the distribution: What’s the likelihood that the owner of a multi-million dollar home will really take the time to sell it herself?