DOWNLOADABLE PDF: Fizber – Methodology
How Fizber Estimates Self-Directed Real Estate Activity
Below is the methodology and sources that Fizber used to determine the top 10 geographic listing locations on Fizber.com, as well as to calculate the estimated number of self-directed homes sold in each state.
Top 10 Cities: The rank and order of these cities is based on Fizber.com listings and site traffic.
Average Fizber List Price: Gathered from Fizber’s listings data and removing the outliers.
Estimated Self-Directed Homes Sold 2014 (Statewide): This is a Fizber estimate of the number of self-directed real estate homes sold in 2014. This was factored using data from the NAR 2014 Profile of Home Buyers and Seller report[i]. In particular, statistics on FSBO and Agent-Assisted Sales, by Location (see Exhibit 8-1 on page 110) and the Level of Service Provided by the Real Estate Agent (see Exhibit 7-6 on page 103). With these numbers and an estimate of existing homes sold in an area we can estimate the number of homes sold with an agent providing “a broad range of services and management of most aspects of the home sale” and the number of homes sold with any combination of fewer services than this broad and full range of services. Anything less than the “broad range of services and management of most aspects of the home sale” we call Self-Directed Real Estate, since the customer received only “a limited set of services as requested by the seller” or “the agent listed the home on the MLS and performed few if any additional services” or conducted the sale without agent-assistance.
To calculate this for each state, Fizber used the total number of homes sold as a starting point, and applied the national percentages of agent-assisted vs. FSBO vs. limited services to translate that total number of homes sold to an estimate of those that were sold as a self-directed home.
The estimate for the total number of homes sold in each state was calculated based on various numbers gathered online (see source listings at the end of this document). In a few instances, Fizber had to manually add or consolidate quarterly numbers to obtain an annual Fizber estimated number of homes sold as self-directed sales in each state.
Estimated Total Savings (Statewide): Similar to the estimate of the Self-Directed Homes Sold in 2014 by state, the estimate by savings is based on a median home sales price for that state (usually found in the same place as the total homes sold). The methodology assumes that a FSBO seller saved six percent of the median home price, that a MLS Only customer saved three percent of the median home price minus $300 (the cost of the FFMLS), that a limited agent services seller saved three percent of the median sales price, and that a full service customer didn’t save anything.
Estimated Average Savings (Statewide): Calculated taking the Estimated Total Savings and dividing it by the Estimated Self-Directed Homes Sold in 2014. For example: The Illinois Association of Realtors published this PDF: http://www.illinoisrealtor.org/sites/illinoisrealtor.org/files/Infographic_Year-End_Dec2014_FINAL.pdf
This document states: Illinois Median Home Sales Price: $160,000, Closed Sales: 146,659. To obtain a total number of Self-Directed Home Sales Fizber did the following:
- Total homes sold “Agent-assisted” = 146,659 x 88%[ii] = 94,089
- Homes sold with an agent managing most aspect of the home sale = 94,089 x 79%[iii] = 74,330
- Homes sold with Limited Service by Agent = 94,089 x 9%[iv] = 8,468
- Homes sold MLS Only = 94,089 x 12%[v] = 11,291
- Homes sold FSBO = 146,659 x 9%[vi] = 9,623
- Homes sold Other (no-agent) = 146,659 x 3%[vii] = 3,208
- Total Self-Directed Real Estate (or anything other than full-service) = 8,468 + 11,291 + 9,623 + 3,208 = 32,589
The Estimated Savings was calculated similarly, taking the totals above and multiplying them by a potential savings number as previously described.
- FSBO & Other Savings = Median Price x 6%
- MLS Only Savings = (Median Price x 3%) – $300
- Limited Service Savings = Median Price x 3%
[i] National Association of Realtors, 2014 Profile of Home Buyers and Sellers, available for purchase: http://www.realtor.org/reports/highlights-from-the-2014-profile-of-home-buyers-and-sellers, last accessed: 22 April 2015.
[ii] National Association of Realtors, 2014 Profile of Home Buyers and Sellers, Exhibit 8-1, Percent of homes sold “Agent-Assisted 88%”.
[iii] IBID. Exhibit 7-6, Percent of homes sold with “A broad range of services and management of most aspects of the home sale 79%”.
[iv] IBID. Exhibit 7-6, Percent of homes sold with “A limited set of services as requested by the seller 9%”. A common example is an agent only asked to host an open house for a seller.
[v] IBID. Exhibit 7-6, Percent of homes sold where “The agent listed the home on the MLS and performed few if any additional services 12%”.
[vi] National Association of Realtors, 2014 Profile of Home Buyers and Sellers, Exhibit 8-1, Percent of homes sold “Agent-Assisted 9%”.
[vii] National Association of Realtors, 2014 Profile of Home Buyers and Sellers, Exhibit 8-1, Percent of homes sold “Agent-Assisted 2%”. Rounded to 3% so that 88% + 9% + 3% = 100%