A study by Stanford University economists B. Douglas Bernheim and Jonathan Meer called “How Much Value Do Real Estate Brokers Add? A Case Study.” Bottom line: We (I) don’t add a whole lot. “We find no evidence that the use of a broker leads to higher average selling prices, or that it significantly alters average initial asking prices. However, those who use brokers sell their houses more quickly,” the authors write.
The study was based on data pertaining to sales of faculty and staff homes on the Stanford campus over a 26-year period. “For the median home in our sample, a 6 percent sales commission totals $34,000, a steep price to pay for the value rendered,” the authors write.
The study closely resembles one in 2007 that covered brokers vs. FSBOs in Madison, Wis., another college town.
The National Association of Realtors reaction:
—Time is money when it comes to selling a home. If it takes longer to sell a home yourself, it could mean making one, two, or three extra mortgage payments.
—The Stanford campus may not be typical of the nation as a whole.
—The NAR’s own annual survey found that on a per-square-foot basis, FSBOs sold for $92, vs. $116 for sales by brokers.
I’ll file this under: Looking for a new job.
Source: Sanford University study via Business Week
Over the course of 20 years in the Boston downtown real estate market, John represented and sold numerous, condominiums, investment and development properties in Greater Boston and in the surrounding suburbs
In addition to representing Boston condo buyers and sellers, John is currently one of the most recognized Boston condo blog writers regarding Boston condominiums and residential real estate markets. John's insights and observations about the Boston condo market have been seen in a wide variety of the most established local & national media outlets including; Banker and Tradesman, Boston Magazine The Boston Globe, The Boston Herald and NewsWeek and Fortune magazine, among others.
For over 24 years, John Ford, of Ford Realty Inc., has been actively involved in the real estate industry. He started his career in commercial real estate with a national firm Spaulding & Slye and quickly realized that he had a passion for residential properties. In 1999, John entered the residential real estate market, and in 2000 John Started his own firm Ford Realty Inc. As a broker, his clients have come to love his fun, vivacious, and friendly attitude. He prides himself on bringing honesty and integrity to the entire home buying and selling process. In addition to helping buyers and sellers, he also works with rental clients. Whether you’re looking to purchase a new Boston condo or rent an apartment, you’ll quickly learn why John has a 97% closing rate.
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