Homeowners have more options than ever when it comes to selling their homes. Thanks to real estate technology platforms, such as iBuyers, cash-buying companies, and flat-fee multiple listing services, many Americans are exploring ways to sell their home without using an agent.
However, a new study from Clever Offers suggests that using a traditional real estate agent still yields the best outcomes, even though many sellers believe they can do a better job.
Why Do Sellers Forgo an Agent?
More than 9 in 10 nontraditional sellers said avoiding the hassle of a conventional home sale was a priority. It’s why 33% said they didn’t use an agent — because it was simply more convenient to sell on their own.
However, selling without an agent’s expertise proved more difficult than they realized. Without an agent, sellers were responsible for marketing, negotiating, and other tasks. It’s no surprise that 52% of unrepresented sellers said they felt overwhelmed when they sold their home.
For most nontraditional sellers, though, selling solo was worth it. Nearly three-quarters said forgoing an agent was worth the extra effort to save on commission.
Commission Confusion
However, most nontraditional sellers don’t know how much commission the average U.S. home seller pays. Eighty-five percent are unaware that the average commission rate is about 6% of the final home sale price, with 40% assuming it is higher.
The result is that many unrepresented sellers aren’t saving nearly as much as they think. Around 42% of unrepresented sellers say they’d accept an offer $15,000 below their asking price to avoid working with an agent, and 17% said they’d accept $25,000 less.
But the average listing agent charges a 2.82% commission, which equates to $11,585 on the median-priced home. That means many nontraditional sellers would actually be willing to lose more on their home sale than if they used an agent.
What’s more, unrepresented sellers are nearly twice as likely as represented sellers to pocket zero profit on their sale. About 7% of nontraditional sellers said they broke even or lost money, compared to just 4% of agent-represented sellers.
Represented sellers who made a profit earned $138,477 on average — about $6,225 more than the $132,252 in profit that the average unrepresented seller made.
What Sellers Wish They’d Done Differently
About 85% of sellers said they had regrets about their sale, a figure roughly split between represented and unrepresented sellers.
The most common regret, cited by 25% of nontraditional sellers, was pricing their home incorrectly.
“If their pricing is off, they’ve already blown their best shot at selling for the most money because most sellers don’t understand that there is an art to pricing. It’s not a science,” said Kati Spaniak, a real estate agent and YouTuber. “Most sellers don’t realize how much dark, unprofessional images hurt the perception buyers have when they are seeing the house online for the first time. Many buyers assume they can get a ‘deal’ on FSBO homes because they know the sellers aren’t being advised properly.”
The second most common regret, cited by 23% of unrepresented sellers, is that they struggled to negotiate with the buyer’s agent, and nearly half of those sellers said they were intimidated by the prospect of sitting across from the buyer’s agent at the negotiating table.
Two-thirds of sellers who used an agent also had regrets about some aspect of their sale. The top regrets were that their agent’s commission was too high and that their home didn’t get enough offers, each cited by 21% of represented sellers.
Although using an agent seemed to offer a better chance of a satisfactory home sale, a non-trivial percentage of represented sellers were left wanting a little more.
Unassisted Sales Can Take a Long Time
A successful home sale is as much about speed as it is about profit. About 94% of all sellers say selling their home as quickly as possible was a high priority.
Represented sellers have an advantage in terms of sale speed. Around 65% of sellers accepted an offer on their home within 2 months of listing, compared with only 51% of unrepresented sellers.
Sellers seem to agree that two months is the time limit for a successful home sale. About 87% of unrepresented sellers and 86% of represented sellers say they’d try a different selling method if they hadn’t received any reasonable offers after two months.
The problem is that after a home has been on the market for several weeks, it’s hard to change that first impression, said Spaniak, who has taken over many FSBO listings after sellers realized they were in over their heads.
“Most FSBO sellers start the process thinking they can do it. However, they get very timid and scared the moment it goes on the market because there is a lot to manage with the showings, the phone calls, and the agents who are trying to get the listing,” she said. “So many times I have taken over a FSBO because the sellers gave up really quickly. The stress was more overwhelming than they had originally thought. So they say, ‘Forget it. Just take the listing.’ But the problem is, by that time, the home has already been in the MLS and the excitement for the listing is over.”
Perceptions of Agents Vary Widely
Survey results show that sellers who pursue an unassisted sale tend to have a fairly low opinion of real estate agents, but sellers who do use an agent have a high rate of satisfaction.
About 69% of nontraditional sellers said agents are more concerned about getting paid than about their clients’ best interests, and 57% said agents are just overpriced, unnecessary middlemen.
However, 85% of represented sellers said they were satisfied with their agent, and 77% said they’d use the same agent again.