Are you losing money by not using a real estate agent?

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Are you leaving money on the table by not using a real estate agent?
There’s an undercurrent among buyers and sellers that real estate agents are too expensive, and that we literally take thousands — and thousands — of dollars out of our clients’ pockets. The desire to bypass a real estate agent can be strong.

Not using a real estate agent

So, are you losing money by not using a real estate agent? To answer that, we need to look at what a real estate agent does. I, for one, do not think agents are becoming obsolete. 

Most people think realtors take a listing, put it into the MLS, and sit back and wait for a buyer to show up. In most parts of the country, sellers have to hire an agent to get the property into the MLS, since REALTORS own the MLS. Knowing that virtually all the real estate transactions are completed through the MLS, sellers feel that they have to do this.

So they bite the bullet, and hire an agent.

See, here’s the thing. If putting your property into the MLS is the only thing an agent does, you’d be right to be angry for paying huge fees. The cost to play that game – the commission to the agent – is pretty steep. On behalf of all REALTORS, I hope you’re getting more for you money than simply a listing in the MLS. (As an aside, the Colorado Real Estate Commission is clamping down on agents who do nothing more than put a property into the MLS since they are not fulfilling even the most basic of their duties.)

In reality, putting a property into the MLS is just the beginning of what your agent should be doing for you.

Getting into the MLS is possibly the most important piece of marketing your agent is going to do, but marketing isn’t the only thing your agent will do for you. Above and beyond the marketing of your property, real estate agents are also handling your negotiations – which usually makes clients the most uncomfortable – and transaction management. There are a lot of people and details involved in even the easiest of sales. Ironically, the best agents – the ones worth the most – are the ones who make it look the easiest; they’re the ones who make it look like agents don’t do anything!


All that being said, here are some interesting numbers from the National Association of REALTORS. Given their source, you might think the study is a bit skewed. I get that. Still, the numbers say something.

Now, what might cause some of the variance in value between agent-assisted sales and FSBO sales? Obviously, an increase in average value implies that there are more high-dollar transactions in the agent-assisted column.

Think about that for a moment.

There are more high-dollar transactions in the agent-assisted column.

There could be three reasons for this.

  1. Sellers of higher-priced homes are more likely to use real estate agents to help them with their sales. Why would that be? Because those sellers – who are very likely repeat sellers – have learned the value of a real estate agent. Since commissions are almost always a percentage of the sales price of the home, sellers actually pay more to the agent the higher the sales price goes, but even that doesn’t stop them.
  2. It could also be that agents are able to get higher prices because of the marketing channels we have available to us. It’s true that the wider the net you cast, the more fish you’ll catch, and the greater likelihood that you’ll land a big one.
  3. Of course, sellers going alone could be getting talked into lower prices, but don’t feel that they can afford to refuse. They might or might not really know the realities of the market.

So is there ever a reason to forego the realtor? Of course there is. It all depends on your circumstances, and the particulars of your sale. If you’re doing it just to save the commission, however, think long and hard about what you’re doing. I’ve recently come across an attorney who refers to buyers and sellers in FSBO transactions as “future litigants,” and there’s a reason for that.

Above and beyond all that, you could be leaving a lot of money on the table.

Let me know what you think.

Until next time, remember I’m never too busy for your referrals.




Randall Brennan, REALTOR

Certified Negotiation Expert
Certified Investor Agent Specialist
Certified Military Housing Specialist |
My business profile | 

So what’s next? Take your pick.

Is a crazy real estate market the new normal?
The real estate business is an odd business

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