Do Real Estate Agents Cost Too Much?

Why do I need a real estate agent when I can sell my Prescott home by myself and save the commission?

I hear this statement quite often, so I decided to answer the question with real facts and some simple math.

There are so many reasons to a hire a professional to do the job, but today I am going show you the simplest, factual and most important reason... “Show me the MONEY!”

FOR SALE BY OWNER (FSBO) - In 2017 the national median selling price of an open-market for sale by owner home was $200,000

SOLD BY A REAL ESTATE AGENT - In 2017 the national median selling price for all agent-assisted home sales was $265,000

Date provided by National Association of Realtors (NAR) Profile of Buyers and Sellers in 2018.

OK, now let’s do the math:

Let’s assume for simplicity that all other selling costs are equal. The reality is that they will vary a little because escrow and title fees are based upon the sales price. However, we are only talking about a few hundred dollars difference and the increase in selling price will by far offset any small percentage increase in cost.

The normal commission/fee a seller pays to an agent upon the successful close of escrow is 6%, this fee is always negotiable. Therefore the total paid by the Seller for the median priced home sold with an agents assistance was $15,900.00. This commission is normally split and paid 50% to the Seller’s agent and 50% to the Buyer’s agent.

Now let’s take the sales price of $265,000 and subtract the commission ($15,900), the net to the Seller before other selling costs was $249,100, versus $200,000 for a FSBO (for sale by owner) sold home.

The net to the Seller was $49,100.00 MORE for an agent-assisted sale than for a FSBO sale. That is roughly 24.5% higher, even after paying the full commission rate. That is just simple math.

WOW what a deal... the Seller does not have to do any of the work and they get an extra 24.5% or $49,100 for letting a real estate agent help them sell their home! I bet your home in Prescott is worth quite a bit more than the National median; Prescott Arizona’s median price, existing home sold in September 2023 was approximately $591,800 therefore 24.5% of that price equates to roughly $145,000. Using a great agent to receive an additional $145,000 on the sale of a Prescott home sounds like an amazing deal to me!

Think about this for a second, it gets even better...

This data was compiled using the “median” home price and the “average” agent across the Country. Therefore 50% of the transactions would have received a higher price and 50% a lower price. Now imagine how great your return may be if you have an above average home and found an above average agent!

Agent selection is the single most critical factor in maximizing the return on the sale of your most valuable asset, your home.

A huge part of my job as a Broker-Realtor® is to educate, therefore I am also always available by email and phone for real estate and business questions. I hope you enjoy this information and please feel free to post any comments questions or suggestions in the comments section below... start the conversation.

“If you are armed with all the knowledge then you can make the best possible decisions when preparing to sell your most valuable asset, your Prescott, AZ home.” - Ron Brookshire, Broker-Realtor®