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CNNMoney: Homeowners Ditch Realtors and Pocket Savings

By Michelle Smith   |   Tuesday, 15 Oct 2013 07:53 AM

As the housing recovery takes off, more people are opting for do-it-yourself home sales and pocketing thousands of dollars that would have otherwise been paid to real estate agents.

The National Association of Realtors (NAR) says saving commission fees is the top reason homeowners choose to sell without an agent, reports HSH.com, a mortgage and consumer loan information website.

Real estate commissions are normally in the range of 5 percent to 6 percent, which would bite $10,000 to $12,000 from the sale of a $200,000 home, CNNMoney explains. That commissions is usually split between agents for the buyer and seller.

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Many homeowners are skeptical that real estate professionals put in enough work to justify those earnings. The seller usually has little control over whether the buyer uses an agent, but ditching a realtor on the sales side basically chops the commission fees in half.

For-Sale-by-Owner (FSBO) websites makes it easier for homeowners to make this decision since individuals can readily do many of the tasks a realtor would do.

CNNMoney says sellers can go online to websites such as Zillow or ForSaleByOwner and find a wealth of information including sales and neighborhood data to help them to price and market their homes. And they can list their properties with pictures and have it reach a broad range of potential buyers.

Eddie Tyner, general manager of ForSaleByOwner tells CNNMoney listings have spiked 14 percent in the past year.

"Historically, for sale by owner [deals] ebb and flow with the economy," Donald Van Dyne, who developed iGOfsbo, a website that connects buyers and sellers, explains to CNNMoney.

"People use it when there's a hot market, when it's easier to sell their homes," he said.

Some homeowners also ditch brokers because they believe it pays to be in control of the deal. Agents, they say, can be too eager to accept low offers.

CNNMoney notes that there's some evidence to support this theory. A Stanford University study revealed that homes sold on campus using real estate brokers sold for 5.9 percent to 7.7 percent less than did homes sold without brokers.

The NAR begs to differ. According to its data, the average FSBO sales price in 2012 was $174,900. The average price for a home represented by an agent was $215,000, HSH reports.

And while a growing number of people are attempting to sell their own homes and many report positive results, the NAR claims the data aren't so stellar.

Its 2012 Profile of Home Buyers and Sellers, reports that just 9 percent of all home sales last year were FSBO. Of them, one-third of the sellers already knew the buyer before the transaction, according to HSH.

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