NEW YORK, August 7, 2008 – The Summer of 1968 was long and hot, with political discord and economic upheaval across America. Amidst an economic downturn, rising gas prices and a heated Presidential Election, the Summer of 2008 presents its own challenges.
A lot has changed in forty years, much of it to the benefit of consumers. But one stark reality remains the same: Most consumers still pay real estate agents 6% of the total sales price of their home in order to sell it.
According to industry leader ForSaleByOwner.com, most residential real estate transactions involve inefficiencies and unnecessary costs – which are especially tough on consumers in this real estate market.
The More Things Change . . . .
In 1968, the median cost of buying a home was just over $15,000. A gallon of regular gasoline cost $0.34. A first class stamp cost a nickel, and people shopped for everything the old-fashioned way: They visited the nearest store, loaded up the shopping cart, and took their goods home.
What a difference forty years makes. In June of 2008, the median existing single-family home price was $215,100. A postage stamp costs $0.42. And gas is over $4.00 a gallon.
But consumers have also made great strides. Today, virtually anything can be purchased online and delivered to the buyer’s doorstep, with only the click of a mouse and a credit card. “Middlemen” have largely been eliminated in booking travel, investing in stocks, and countless other consumer transactions. And consumers have benefited by saving money.
This is not the case for consumers who sell their homes with real estate agents.
“According to independent research, more than 20% of consumers are now trying to sell their homes by owner, and that’s a good thing,” said Greg Healy, Vice President of Operations of ForSaleByOwner.com.
“But that also means most home sellers are still doing it the old way – and still, effectively, giving up six percent of the equity in their homes in commissions. In this market, that can be devastating.”
Retaining Equity By “Doing it Yourself”
Spotlighting the problem of shrinking home equity, ABC News reported that in 2007, more than 10% of all homeowners owed more on their mortgage than their home was worth. For homes purchased in the past two years, the figure shoots up to 30%, according to Reuters.
For most home sellers in today’s market, selling by owner can help, allowing them to retain more equity in the home they own, and therefore, put themselves in a better position for their next purchase.
Healy commented, “Although many consumer still use agents, recent data shows not only that consumers who sell by owner retain more equity, but they actually get better pricing power on homes they sell – dispelling another long-time myth about the benefits of using agents.”
Supporting his contention are recent studies from Northwestern University and Stanford University, which found that “for sale by owner” consumers can not only sell their homes effectively – but frequently get a higher sales price than had the home been sold by an agent.
“In today’s tough housing market, we believe that it’s important for consumers to understand that selling ‘for sale by owner’ is a tremendous opportunity to save a significant amount of money,” concluded Healy.
For consumers confronting a host of economic challenges, selling a home online by “doing it yourself” may be one of the few bright spots left.
ForSaleByOwner.com is the nation’s leading for sale by owner website. Since 1999, ForSaleByOwner.com has saved home sellers more than one billion dollars by providing premium Internet marketing services, real estate guidance and information, as well as live customer support, to help customers independently sell their own homes. The company offers a wide range of listing packages at varying prices that provide advertising, information, tools and resources to empower people to sell their homes themselves. In contrast, a person selling a $300,000 home through a real estate agent would be charged a 6% commission fee and pay approximately $18,000. Prospective homebuyers can browse the ForSaleByOwner.com database