Interesting study - FSBO vs MLS

Depends on which studies you’re quoting and who they’re from. Some studies show the agent negotiated a much higher price or was able to start with a higher price in the first place since sellers can underprice their homes or not negotiate well.

I think any FSBO/MLS study is curious and suspect because there’s too many factors. The REALTORS can make it look like you always get more and the FSBO companies can do the same. I wonder if they tracked the number of FSBOs that never sold or ended up listing with an agent. Many homes sit on the market and only the cheap ones get sold after the seller doesn’t know what else to do. Then again, the same thing can happen when you use an agent.

The strange thing is that all homes are “for sale by owner” and it depends on whether they want a professional to represent them and provide advice or not.

I don’t necessary agree that “all homes are ‘sold by owner’” because if you hire an agent to sell it for you, they have to come out of pocket to pay for advertising the property. That is if you have a good agent, they will do more than place it on the mls. And if your home isn’t sold, they take the hit.

Although I do agree that The Realtors and the FSBO companies always make the studies lean one way or the other…but doesn’t necessarily come close to the total truth, just part.

Ultimately, the house is going to sell based on its value and the marketing put in to get a customer. Realtors are in a better position to make a sale because they have a larger network to market through than a typical FSBO will utilize. Also, many buyers shy away from FSBOs due to fear. The realtor handles all the details. In a FSBO, the buyer has no one to hold their hand.

You can disagree with it, but the fact is that only the owner can sell their home. The industry created a term where the sellers feel they have more control and are “selling the home themselves” when they aren’t represented. I’m just saying that there’s a new thought that ALL homes are really sold by the seller unless it’s a trustee sale. It’s just a matter of if you have someone else’s sign in the yard and they’re marketing it for you.

I know it’s semantics, but it shows the mindset of the industry.

I would put my 2 cents in here but Dee already paid for me . Hats off to you DEE.

If we’re talking about nationally, the truth is most FSBO’s don’t sell at all. Those that do, rarely are done ‘fully’ legal because the seller simply doesn’t understand what it takes to sell the property. For example, in NC, there is a state required property disclosure sheet that MUST be delivered to the buyer at contract. This rarely happens in a FSBO sale, which leaves the seller open to a ton of potential legal mess in the future.

The internet has made it easier for FSBO’s to market their homes on a level with agents, but they usually don’t have the market savvy to price their props correctly and either grossly overprice, or underprice, their props. Especially for those that underprice, they have to deal with the dreaded investors calling up offering even less money. That’s in addition to the ‘normal’ people calling wanting to see the home.

This particular article is especially flawed as it states that it is being conducted in a strong sellers’ market. In a sellers’ markets, monkeys could sell real estate. EVERYBODY wants to buy. Makes it very hard to overprice your prop because even if you, someone will buy it because “it’s only going up” or the market will quickly catch up to it.


When I am buying real estate agents are god sends when I am selling they are bloodsuckers. But When I sell, I want to get the house gone. I use agents because I never underestimate the power of greed. An agent will do what it takes to earn tha tcommission and all they have to do is talk this poor sap into buying my house.

This is discussed a little in the book Freakonomics. Actually, and I do hate to generalize, but I don’t think Realtors are as interested in extracting every last dollar (as the listing agent) as you would like to think.

There is very little incentive for a Realtor to squeeze another $10,000 or $20,000 from the sale of a house.

Assuming the old business model where the listing agent might get 1.5% of the sales price (with the other half going to the broker), that extra $10,000 in sales price is going to bring the agent only another $150. The ten grand is a lot for you, but the commission is not much for the agent.

It’s discussed in the book how Realtors tend to sell their own homes for more than they sell their clients’ homes.

Having said that, there are times when I think it’s wise to use an agent, and other times when I think you’re OK using a “sell it yourself” MLS-listing service.

I agree. A well priced home will sell regardless, but some buyers do tend to steer away from FSBO because they have to put all their trust on the person selling the home. On the flip side, I have encountered some buyers who only want to buy FSBO because they feel they can get a better deal because there is no middle-man.

I know of a couple just like this. They refuse to agents and look for FSBOs because they think they’re saving 3%.

I told them that depending upon how the owner of a FSBO has priced their house, they aren’t saving a penny unless they can get the price down 6% off market value.

Exactly. Most buyers dont realize that the sellers are selling FSBO to keep that extra 3% for themselves, or 6%. They aren’t selling FSBO to help a buyer get a good deal.

Agreed. I’ve sold some great FSBOs that sat on the market OR the owner didn’t know the value of the property. Once an owner lists their house and I have a buyer’s representation agreement with a client, I don’t have to tell them the value. We just picked up a great FBSO that was $50k under market. The house across the street sold on MLS for $200k in 3 days.

Too bad they didn’t have an agent, but we had to represent our clients. We don’t have the heart to tell them how much they didn’t save.