Contrary to researched performed by the National Association of Realtors (surprise, surprise!), a new study of the housing market in Madison, Wisconsin by two economists from Northwestern University has found that, after accounting for commissions, owners who sold their homes on their own did better than those who used an agent. The paper, which has yet to be published, looked at the period from 1998 to 2004, a time in which the market only went one direction, up. The authors are currently studying data from 2005 and 2006 to see whether the results might differ under more difficult market conditions. In the agents’ defense, the research revealed that the broker listings tended to sell faster than the FSBOs; it also did not account for the value of other services provided by brokers (or, we assume, the value of the owners’ time). Food for thought, nonetheless. Another thought: What about selection bias in this study? What about all the people who tried to sell their own homes, failed and then gave the house to a broker? Wonder how that was accounted for in the study.
One City’s Home Sellers Do Better on Their Own [NY TImes]
Photo by TroyM