The National Association of Realtors publishes an incredible report called The Profile of Home Buyers and Sellers each year in late November. It is chock full of great statistics, comments, and insights and I highly recommend that you get a copy each year. I usually order it online the day it becomes available during the national convention. It retails for $249.95 but with your NAR Membership its $19.95.
I’m a numbers geek so this actually excites me year after year– it’s like opening a Christmas Present. I get the new Report each year and immediately go to the section on For Sale By Owners., it’s usually page 115 or so.
The report has got lots of analysis on lots of subjects like the fact that the number of sellers that go the For Sale By Owner route has declined significantly since 2003 from 14% to 8% and that the number of true for sale by owners (those owners that sell to a buyer they don’t know has dropped for 10% to 5% .)
The big number every one reports is from chart 8-6 which shows the huge difference between the median sales price of a For Sale by Owner and the Median sales price of homes that were sold assisted by an agent.
In 2015 the numbers were $210,000 and $249,000 a difference of $39,000!! As a Realtor for 36+ years and coach and instructor I know beyond any shadow of a doubt that we are worth every
penny we are paid but the mere fact of hiring us does not make any home worth $39,000 (or almost 19%)more. I’ve been hunting for statistics for years and this report is the only report I’ve found that consistently gives any quantitative number to the value we, as agents, bring to a seller. Knowing we’re good is one thing but there’s no way we can call a FSBO and say “list with me and I’ll make your home worth $39,000 more”…we don’t have magic wands that instantly add value to a home. We can logically say “Sellers that own more expensive homes understand the value a real estate agent brings to the transaction; and seller selling to a relative or in a divorce case may be listed here. So the study is skewed as generally for sale by owners are less expensive” but that conversation may add to a FSBO ‘skepticism about self-serving statistics.
What I want you to notice is the last figure in exhibit 8-6. A seller that tried for sale by owner in 2015, one of the best years ever to sell a home, who gave up trying to sell on their own and listed with an agent sold for a median price of $228,000. As opposed to a For Sale By Owner who did sell averaging $210,000. That’s $18,000 or or 8.6%.
A great question to ask (don’t just berate them with statistics) is “how can you explain a for sale by owner just like you listing with an agent and netting 8.6% more?” They’ll be silent but you could nudge them with “could it be our negotiating skills, or our marketing, or the fact that agents like to work with other agents?” They’ll get the point that we add value – and after all – most of us charge far less than 8.6% to list and sell a home.
I use what I call the FSBO Cheat Sheet to show them the value and ask the question. I’ll often email it or drop this sheet off and have the for sale by owner contact me asking for more details.