Economic analysis of FSBOs vs. agents in Madison
marvelousmarvin
16 years ago
There's a really interesting economic paper about the real estate market in Madison, Wisconsin by two northwestern econ profs that disputes the NAR's contention that real estate agents are able to sell homes at a 16% premium over FSBOs. In fact, according to the study, once you account for the commission, the FSBOs actually come out financially ahead (assuming you don't place a value on the time that the FSBO puts in).
But, there's a couple of important points to remember in this paper:
1) Madison has probably the biggest FSBO market in the nation, in terms of percentage. Instead of trying to crack the NAR, they have their own heavily trafficed, alternative listing site which has captured around 20% of the Dane County residential listings.
2) The study still found that FSBOs take longer to sell, and so you need to pay additional mortage, taxes, etc..
dianemargaret
marvelousmarvinOriginal Author
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