We’ve been saying this for the last 11 years: If you list your home to sell with an agent on the real estate board’s multiple listing service (MLS), you will lose money over what you could have walked away with had you sold privately, but the agent will make out very nicely.
We’ve been saying it because we know it’s true. But now a major study conducted over seven years and released in June by economists at two universities confirms it.
Economists from Northwest University and the University of Wisconsin were given access to the Madison, Wisconsin, real estate board’s MLS database, the database of a successful private sales company operating in that city and that city’s assessment office files, each from 1998 through 2005. They analyzed every residential real estate transaction in Madison during that time frame and came up with an apple-to-apple comparison. Real estate and the MLS work the same there as here. So this study is relevant to us.
In their concluding remarks, the economists say: "...we examine(d) the relative performance of two competing networks: MLS and FSBO (for sale by owner or private sale). Our results suggest the two platforms command similar prices. Even after controlling for differences in house and seller characteristics, we find that MLS offers no advantage in sale price."
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To view the full report:
CLICK HERE - 147k
(Requires Adobe Acrobat Reader)
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And later: "As more people become aware of it (private sale) and, more importantly, as more sellers realize that there might not be any penalty associated with using it, its share of the market will increase."
It’s only reasonable. Many sellers only use an agent because the agent has told them he can "net them more," or has frightened them into believing private sale is too complicated or "dangerous." This study proves neither is true.
Not only will your home sell for as much when you market privately, but you will pocket all of what would have been the agent’s commission.
We’ve always believed that a well-informed homeowner is more likely to be a ComFree client, so we’d like you to read the full paper.
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