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Do you really need A REALTOR®? If you have a home to sell, it sure seems like a good idea to figure out how to save as much money as possible since home values are not where they once were. If you could sell your home without a REALTOR®, wouldn’t you be adding a whole bunch of money to your bottom line (or reducing the amount of money you might need to bring to closing?
In order to find an answer to this oft asked question, I would suggest you start by examining the current state and cycle of your local housing market. In Tallahassee, the bottom of the housing market appears to be behind us, and thus we must slog through the toughest part of the market. This is the point in the housing market cycle where home values continue to decrease, which brings an increase in buyer activity. This should continue until supply and demand balance out around 6.0 months of supply of homes.
You don’t need a REALTOR® to determine the current supply and demand for homes like yours (if you are in Tallahassee), as you can download a free Tallahassee Housing Supply And Demand Report anytime you want. If you are not in Tallahassee, then you will need to find your local real estate market expert and get a report from her (or him).
How Is The Real Estate Market
If your market is like Tallahassee was in 2005, I’m not so sure you need a REALTOR®. Just put whatever price you want on the home (within reason), and the market should catch up to you real quickly.
But if you find a situation similar to what we are dealing with in Tallahassee, I suggest that you might want to consider how homes have been sold historically. Specifically (see real estate graph below), you would find roughly 2/3rds of the home sales in the Tallahassee housing market in the MLS. That means 1 in 3 were either sold by a builder, a “For Sale By Owner,” or by a REALTOR® who did not enter the sale in the MLS. That means that “For Sale By Owners” were typically about 1 in 9 sales.
As the market has gotten tougher, we have seen a trend towards more of the sales coming from REALTORS® in the MLS. In the graph above, the red area represents all recorded home sales in Tallahassee (on a 12 month trend). The logo-shaded portion of that area represents the closed home sales trend during the same period of time in the MLS.
The gap between them (visible red area) shows the amount of recorded home sales that were not in the MLS. The yellow line shows that from 1992 to present, the MLS has represented 40% to 83% of all the sales in Leon County. Of course, in the early 1990s, the computerized MLS was more of a gadget compared to the tool that it is today.
Tough Times RequireREALTORS®
With the current glut of homes making competition fierce among home sellers, it is not surprising to see a higher percentage of them getting help through a real estate brokerage company. My best advice on this is make sure that REALTOR® and the real estate company that you do choose to hire can optimize your exposure on the internet and get your home sold!
Reports That Home Sellers Should Find Interesting
The following are the past six daily reports available at the Tallahassee Housing Report. We keep updating these reports so that Tallahassee home sellers (and buyers) know the current state of real estate in Tallahassee.
- Average Real Estate Prices
- Pending Home Sales Report
- Year To Date Home Sales
- Greater Tallahassee MSA Housing Supply and Demand
- Condominiums and Townhouse Sales
- Lot and Land Sales Report
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Joe – It is refreshing to see another Realtor analyze market statistics! According to the January 2010 Naples Board of Realtors Overall Market report, Naples has an inventory that could last 23.8 months. More importantly 71.49% of ALL the closed sales were under $300,000.00. If you look at those numbers, you would think that a Seller in that price range might not need a Realtor to sell them home. In reality most of these sales are short sales and foreclosures where Sellers really do need the help of a Realtor.
It is helpful to be able to show Buyers these stats also. If Buyers are looking in Naples under $300,000.00, they face stiff competition.
First of your charts that I truly understood. Thank you.
Thanks Nic.
Thanks Lynn. It looks like you know your numbers as well!
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