The Freakonomics Blog
recently posted this item:
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.
I believe I've discovered how the National Association of Realtors (NAR) came up with their surprising statistic. The 16% figure probably comes from an NAR study which found that the median 2005 sales price for a home that was sold by an agent was $230,000, compared to only $198,200 for a FSBO home.
But the NAR is guilty of comparing apples with oranges. While $230,000 is about 16% higher than $198,200, it doesn’t follow that hiring an agent will boost a home’s sales price by 16%. There are many possible reasons that FSBO prices are relatively low. One is that FSBO properties include a disproportionate number of mobile homes and manufactured homes, which usually sell for less than detached single-family homes.