MLS vs FSBO - Study Proves For-Sale-By-Owner is Better
What a great day for FSBO! On June 7th, 2007, Northwestern University released an independent, unbiased report (linked here) concluding that “MLS offers no advantage in the sale price ”
At ByTheOwner.com, we have often heard agents claim that they will get you “more money” and that their commission is “worth it” because they can “put your home on mls”. We always knew these claims to be false, but now there is proof!
The study took data from 1998-2004, and compared FSBOmadison.com (Madison, Wisconsin) to MLS. Many different factors (house characteristics, seller selection…) were considered and it is an incredibly detailed and thorough report. Some points from the study:
-”The average sale price of homes that sell on FSBO is higher that the average price of homes that sell with a realtor.”
-”We did not find that listing on the Multiple Listing Service (MLS) helps sellers obtain a significantly higher sales price.”
-”Our results suggest the two platforms (mls, fsbo) command similar prices.”
-”Internet sites facilitate direct (by owner) marketing. Direct marketing has always been possible using newspapers, flyers and other forms of advertising. However, the internet is a cheaper and potentially more effective form of direct marketing.”
-”a proportion (about 20%) of FSBO listings move to MLS after initial failure” - This statistic is particularly interesting because CREA publishes that “most people who try to sell their home on their own end up using a realtor in the end anyway“ . CREA considers 20% to be “most people”?
Some results were positive for agents. The report points out:
-”Listing on MLS does shorten the time it takes to sell a house.”
-”Realtors can save sellers time and generally help through a stressful and maybe difficult period.”
This report validates that listing your home on MLS does not mean that you will receive a higher price. If you are looking to get the most money out of selling your home, then selling your home privately is the best way to go.
June 13th, 2007 at 4:29 pm
A survey done in one small college town in Wisconsin does not a serious study make.
Anyone who looks at these numbers and assumes they apply all across the land is not being realistic. It rather sounds as though the blogger has waited all his/her life for this one bit of evidence that ‘proves’ once and for all that what he/she has always believed in his/her gut was right all along.
June 14th, 2007 at 8:43 pm
This study was done by Northwestern University, with the aid of Harvard, MIT…over the course of 7 years. It’s the first unbiased study on For Sale By Owner. I think that makes it serious. For sure I’m excited about it!
William