Are you thinking about selling your home? Many people turn to real estate agents for help, but what if there was another way? New research shows that selling your home on your own might actually lead to a higher price.
According to a study conducted by economists from the Federal Reserve Bank of Atlanta, homeowners consistently earned 1% to 4% more than real estate agents for similar properties. And that’s not all – sellers can also save up to 6% by not paying a commission to the listing agent, which can quickly add up.
But what about the downsides? The study did find that homes sold by owners typically stayed on the market longer and were more likely to not complete a sale. However, the researchers concluded that these drawbacks were outweighed by the higher selling price.
To put it into perspective, let’s consider an example. If a home is sold for $286,000 with a 3% commission to the buyer’s agent and a $400 flat fee to list the property on the Multiple Listing Service (MLS), and the owner earns a 4.3% premium on the home without using a selling agent, they could save a whopping $19,740. Now that’s something to think about!
The Pros and Cons of Selling Agents
The researchers also examined the usefulness of selling agents in the real estate market. Despite advances in technology making it easier for people to buy and sell homes, commission rates for agents have not declined. In fact, getting a real estate license is relatively easy, with just an exam and background check required.
In their study, the economists analyzed the performance of 16,000 individual real estate agents in various markets. They discovered that the choice of selling agent has a significant impact on the selling price. Switching from a low-performing agent to a high-performing one could increase the sales price of a home by 15% to 20%.
Interestingly, the study also found that in some cases, owners who sold their own property could actually outperform even the best-selling agents. Not only do owners save on commission fees, but they also have the potential to secure a higher price from buyers.
Is Using a Selling Agent Worth It?
This research challenges the figures provided by the National Association of Realtors, which suggested that homes sold by owners tend to have lower median sales prices compared to agent-listed homes. However, the economists argue that this difference could be due to factors like the market conditions during the analysis period and the inclusion of multiple markets.
While highly skilled selling agents can negotiate a higher selling price to offset their commission fees, it’s important to consider other factors. Selling agents can provide valuable resources such as market knowledge, assistance with determining a sales price, and saving the seller time.
When it’s time to sell your home, it’s worth considering the option of selling it on your own. If you do choose to work with a selling agent, be sure to shop around, read agent reviews, and look at previous sales to ensure a good fit. Selling your home can be a stressful time, but with the right approach, it can be made easier and more beneficial for you.
