July 13, 2010
As the Competition Bureau tries to open the grasp of the MLS system, Realtors argue that that they are able to sell your home for more money than by doing it yourself.
But, where are their statistics?
Check this out, by CityNews:
“A 2007 study by Northwestern University’s Igal Hendel, Aviv Nevo and François Ortalo-Magne found that there was no difference in sale price between houses sold without an agent and agent-sold homes, though sellers did save between 3 per cent and 6 per cent on commission. Another paper, published in 2008 by Stanford University’s Douglas Bernheim and Texas A&M University’s Jonathan Meer, says that houses at Stanford University actually sold for 7 per cent more when no agent was involved.
Meer says that could be because houses sold by realtors sell faster. “Agents are acting in regard to their own interest—to sell the house quickly—even at a lower price,” he says, adding that waiting another month to sell a house for an extra $10,000 will only net the agent about $150 after expenses.”
But, there are some drawbacks to DIY sales, such as:
– The longer your house is on the market, the more your interest payments;
– The inconvenient costs that you may have not thought about, such as the time is takes to show your house, and advertising costs.
Despite the above, using a Realtor is definitely an attractive option. But, the numbers above should put some pressure on Realtors to loosen their fees.