With the way information is so easily obtained online nowadays, you can get access to a lot of information by just doing some basic searches. A number of people consider selling their house "For Sale by Owner" or abbreviated FSBO. A lot of people want to save on the commission, and I don't blame them. It's the largest cost of selling a home. But below, we'll cover some of the reasons why a REALTOR adds value to a transaction.

Automatic Valuation Models

You can use resources that will give you estimates of how much your home is worth in mere seconds. These websites have complex algorithms that they use to generate their estimates, but how accurate are they? What don't they consider?

There are several things that these models can't account for. Namely: your particular home, how your home is different than the neighbor’s home, the upgrades that may have been done on your home, the local market conditions, what you will use as your initial listing price, whether you'll get multiple offers or not, and countless many other local factors that a knowledgeable agent can help you with.

Each home is different, even if they have the same floor plan, one house might have an updated kitchen, or one house might have high efficiency appliances, or one may have been super insulated. Every house is unique.

Also important is to look at your house with an objective viewpoint. Since you’ve lived there so long, you’ve probably got some feelings and memories attached to certain things about the home. We, as agents, have not lived there so we can have a much more objective viewpoint of the house as we see it.

Market Expertise

Knowing the local market is a huge advantage. We have local market expertise. In the Minneapolis / St. Paul real estate market, we have seasons that follow the weather patterns. Our market is quite a bit different November - December - January, than for instance March - April - May. Our market tapers off as the weather gets cold, and as we get snow. When the "Spring Market" starts heating up depends on the weather as well.

Negotiation Skills

With over 20 years of experience, and over 300 homes sold, each transaction is different. Each one required different vantage points and skills to get them done. Some of these ended up in multiple offers, while others were just a single offer. No matter what the case, our goal is for a win-win situation, where the buyer is happy with the purchase, and the seller is happy with the sale.

Knowledge of the Sales Process

This is one of the key reasons to use a real estate professional. In the past 3 years, our team has helped 100 people close on their homes (both buyers and sellers). Each of these transactions have had differences in the timelines but they all basically have the same sales process. Having sold 100+ homes this past 3 years, we know the sales process back and forth. How long should an inspection period be? When does the TISH report need to be done? What are the required repairs on the TISH? How can we ensure the appraisal goes smoothly? What is the timeline for the Closing Disclosure? All these types of questions are things that we are intimately familiar with. And if we come across something that we don't know, we have many well-qualified resources available.

Network

On average, most real estate agents close 8 transactions per year (whether buyer or seller). At RE/MAX Results, we average 23 per agent. The average over the last 3 years is 38 transactions per year. Since RE/MAX Results agents are more productive than other agents, we generally have more buyers than the other agents. I can tap into our network of 1200+ high producing agents and reach these highly motivated buyers.

Higher Net Sales Price

There are a couple of recent studies that show selling a house with an agent (vs FSBO) yields a higher net sales price. One study in 2021 shows that FSBO homes typically sell for approximately 26% less than agent-assisted homes, and with an average commission of about 6%-7%, selling FSBO means selling at approximately 19% less. On a $400,000 home, which would equate to $76,000 less in your pocket.

Another study, the NAR Profile of Buyers and Sellers 2015 shows that FSBO's median sales price in 2015 was $210,000, vs the median sales price of an agent assisted sale of $245,000. That's a $35,000 difference. If one hired an agent and subtracted an extra 3% commission ($7300) and one would still sell for $27,000 more!

Real Life Example:

Before I became an agent, I sold my own personal home myself. I had interviewed 3 agents and decided to list my house FSBO. I chose an initial list price of $249,900. Keeping in mind that this was a hot market with multiple offers regularly, it took nearly 4 weeks to get an offer. We accepted that one and only offer for $247,900. I did pay a 3% buyers commission, and it closed without a hassle. But a few months later, I became an agent. I decided to do a full market analysis of my home and discovered that my home could probably have sold for $275,000. Even after subtracting out a listing commission of 3% (above the buyer’s commission of 3%), I would have made approximately $18,000 more than selling it myself! Even if it sold for $10,000 less than I estimated, I still would have made $8,000 more! This is an example that I still use with sellers today.

For some examples click on the photo gallery shown below. We just looked for some recent sales and checked on what this website thought the homes should sell at. You can see that there is an enormous range between what the estimate was, and what it actually sold for. We can  easily find examples of $100,000 too high, and $100,000 too low. One house was estimated at $260,000 and sold at $369,000. Now granted if you listed the home for sale at $260,000, you would have multiple offers on the first day since everyone would think it was far too good of a bargain. You would probably get 15 offers on day 1 but we're not entirely sure that someone would offer $369,000 with a list price of $260,000.

Conversely if you listed a house for the estimated value of $485,000 instead of the actual market value of $390,000, it would take an exceptionally long time to sell.