Saving Real Estate Commissions at Any Price: Does Having a Real Estate Agent Influence the Sales Price of a Home?

Norm Miller, Alison Sanchez, Michael Sklarz and Adriana Vamosiu

Journal of Housing Research, 2021, vol. 30, issue 2, 175-206

Abstract: We examine the price differentials for homes sold through traditional agents compared to For-Sale-By-Owner (FSBO) sales for two geographic markets with data from January 2016 to July 2017. While revealing that the “MLS premium” no longer exists, we find that FSBOs sell for significantly lower prices than comparable home sales sold by agents and for prices below the average differential represented by the commission rate (6%), even after accounting for endogeneity of the FSBO variable. We find that the magnitude of the effect varies by geographic market as well as type of home. Our results have implications for assessing the value of a real estate agent when determining sales commissions.

Date: 2021
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DOI: 10.1080/10527001.2021.1984756

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