New Study: Home Sellers Still Depend on Real Estate Agents Despite Disruptions

New Study: Home Sellers Still Depend on Real Estate Agents Despite Disruptions

Home sellers think they know what they’re doing when it comes to selling their properties, but according to a new survey from Clever Real Estate, they’re often wrong or not ready.

Homeowners don’t realize how much it costs to sell a home, with 45% not expecting to pay the buyer’s commission. Those who plan to sell for sale by owner (FSBO) aren’t ready to sell by themselves; they aren’t comfortable negotiating without an agent (53%).

Most home sellers, even those who do try to sell by themselves, still need a real estate agent. 62% of respondents indicated they’re uncomfortable filling out and completing the necessary paperwork by themselves.

How Do Commission Fees Work, Anyway?

While there were over six million homes sold in 2017, many Americans just don’t understand how real estate commissions work. The home selling process is complicated and filled with minor fees and costs.

Of the 1,000 home sellers surveyed, almost half of the cohort thought the home buyer pays their own commission, while in reality, the home seller pays commission fees in almost all transactions.

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Most homeowners don’t understand all the costs involved in selling a home, and home sellers were also confused about the average commission fee itself. Only 35% of home sellers know that the total commission fee is about 6% of the home’s final price.

The study also found that 34% of respondents thought realtor fees are costly and unfair to sellers, but 46% of respondents felt that realtor fees are costly and fair, and 19% felt realtor fees are reasonable and fair.

The bottomline: When starting a relationship with a home seller, a real estate agent should explain the process and commission structure, especially for first-time home buyers, who are more likely to be confused.

Even FSBO Sellers Need a Realtor

While new real estate services like flat-fee MLS services and AI-driven home listing sites are disrupting the industry, there’s nothing that can quite replace a traditional real estate agent. Even as technology improves, there are important parts of the home-selling process that most people don’t trust to themselves.

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Most buyers don’t feel comfortable negotiating on their own, and even among sellers listing by themselves, almost half are uncomfortable negotiating.

Furthermore, 62% of all home sellers (and 46% of FBSO sellers) said they wouldn’t be comfortable obtaining and executing all necessary real estate paperwork when selling their home. What this data indicates is many sellers aren’t prepared to deal with the minutiae of home selling.

Many home sellers are unaware of how complicated the process can be and how much work goes into it. In 2017, only 7% of home sales  were classified as FSBO. Many people start out thinking they can go it alone, but as they discover how difficult and involved selling a home actually is, they end up partnering with an agent to get the job done.

What’s more, that decision usually pays off: according to recent data from the National Association of Realtors, the average FSBO home sold for $200,000, compared to $265,000 for agent-assisted sales.

Traditional Realtors in 2019

While technological advances are creeping up on real estate agents, including the specter of AI (which 37% of respondents thought could outperform Realtors), they’re still an integral part of the home selling process.

Clever’s study indicates the importance of working with real estate agents, as many home sellers are unaware of the true challenges of selling their homes. With a quality agent who explains the process in detail, home sellers will be more prepared to sell their homes in the future.


Luke Babich is Co-Founder and CSO of Clever Real Estate. Luke is also an active real estate investor with 22 units in St. Louis, and a licensed Real Estate Agent in the State of Missouri.


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