The National Bureau of Economic Research published a joint study by Stanford and Texas A&M University about selling a home. This study took a detailed look of the pros and cons of a home seller using a self MLS listing for a flat fee versus a traditional agency.
Here is the executive summary, which finds that home sellers "net" less money when they use a traditional agent.
- The large traditional agent commission exceeds the higher sales price an agent could bring "by a wide margin."
- It finds that the main value you need is the MLS listing, which is the service BuySelf Realty provides.
- For the services of a traditional agent, "It is not obvious that sellers benefit from those services."
- The statistics suggest that agents work for their own benefit more than the sellers.
After 20 years, this study no surprise to us. We have seen these conclusions confirmed day after day, seller after seller...
Executive Summary:
"This paper measures the effects of real estate brokerage services provided to sellers, other than MLS listings, on the terms and timing of home sales. It is not obvious that sellers benefit from those services. On the one hand, brokers offer potentially useful knowledge and expertise. On the other hand, because the relationship between the homeowner and the broker resembles a classical principal-agent problem, the broker may not deploy services in ways that promote the seller's interests. Yet as long as valuable MLS listings are bundled with brokerage services, homeowners may use brokers even if the agency costs exceed the benefits of brokers' knowledge and expertise. Thus, quantification of the net value of brokerage services other than MLS listings bears directly on the recent policy debate over the desirability unbundling of MLS listings. We estimate the effect of a seller's decision to use a broker on list prices, selling prices, and speed of sale for a real estate market with an unusual and critical characteristic: it has a single open-access listing service that is used by essentially all sellers, regardless of whether they employ brokers. Our central finding is that, when listings are not tied to brokerage services, a seller's use of a broker reduces the selling price of the typical home by 5.9 to 7.7 percent, which indicates that agency costs exceed the advantages of brokers' knowledge and expertise by a wide margin."
You can see the study at this external website: Do Real Estate Brokers Add Value When Listing Services Are Unbundled?
