Are Realtors Worth the Price?

Are Realtors Worth the Price?

NEW YORK (MainStreet) — In the 16 years that she's been a real estate broker, Roxanne Durham has come across plenty of homeowners who think they can sell their homes without help.

"They overprice their property, sell their house for less than what it's worth because they don't know the market or their house is on the market longer than it has to be," Durham told MainStreet.

In fact, a Stanford University study found no evidence indicating that the use of a broker significantly affects either the selling price or the initial asking price, though it does lead to a more rapid sale.

"Realtors may be doing their job but charging more than they need to," said Donald Van Dyne, developer of the iGOfsbo.com system and MyOpenHouseAnytime.com "The commission should be negotiable like an open, free market."

Durham begs to differ. She works hard to earn the 6% commission she's paid to sell a home by first studying the real estate market.

"Brokers devote the time to selling the house that the owner may not have," Durham said. "Being a real estate agent or broker is a profession. It's a job."

Yet one-third of Americans who sold a home did not feel the service they received from a realtor was worth the commission, according to a Toluna study commissioned by iGOfsbo.com.

Durham's duties include preparing a home for viewing, marketing, showing the house in rain or snow and fielding offers.

"Negotiating a price is not an easy job," Durham said. "It's a special skill to negotiate a price and harder for the home owner to do because they get emotional and often sell their home for less than what it's worth. When you have the realtor as middle man, negotiating is easier."

And quite possibly more profitable.

Homes owned by real estate agents sell for about 3.7% more than other houses, according to a study called Market Distortions When Agents are Better Informed by Steven D. Levitt and Chad Syverson, and the real estate agent is likely better informed about the value of the house and the state of the local housing market than the seller.