During the last 50 years there has been an oft-repeated broker/agent’s narrative which claims that FSBOs inevitably lose money without them. During that same time period, the number of FSBO sellers has been reduced by half – even though the tools for FSBO’s to use have increased dramatically.
Here are some academic studies that help debunk that narrative.
https://insight.kellogg.northwestern.edu/article/the_superfluousness_of_realtors
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=942348
Stanford Institute for Economic Policy Research: How Much do Real Estate Brokers Add? A Case Study, “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.” https://ideas.repec.org/p/sip/dpaper/06-041.html
Do Real Estate Brokers Add Value When Listing Services Are Unbundled? “a seller’s use of a broker reduces the selling price of the typical home by 5.9 to 7.7 percent” https://www.nber.org/system/files/working_papers/w13796/w13796.pdf
National Bureau Of Economic Research: The Relative Performance Of Real Estate Marketing Platforms: MLS Vrs FSBO Madison.com, “for sale by owners were able to achieve selling prices $14800 higher than Realtors who sold identical homes“.
Princeton University and National Bureau of Economic Research in conjunction with UCLA and University of Pennsylvania: “Our key finding is that Realtors do not offset the cost of their commissions; they do not get you a higher price.”
American Economic Review: The Impact of Commissions on Home Sales in Greater Boston. “high commission agents realize lower sales prices to increase the likelihood of selling a property”
Levitt, S. D., & Syverson, C. (2005). Market Distortions When Agents Are Trusted: The Case of Real Estate Agents “Agents are incentivized to close quickly rather than maximizing the sale price for clients”