Madison Wisconsin do-it-yourself home sellers beat the pros

NEW YORK (CNNMoney.com) -- Putting a house on the market and cutting out the middleman could pay off for sellers in Madison, Wis., along with a little help from a for-sale-by-owner Web site, according to a study released Friday.

Economists conducted a study on whether paying for a real estate agent was worth the money, when having to pay 5 or 6 percent commissions, and found that people selling their own homes in Madison benefited more financially than those who sold their homes through agents.

The study found that an advantage in Madison is a heavily trafficked for-sale-by owner Web site FSBOMadison.com, which competes with local listing services operated by real estate agents.

Homes sold on FSBO received an average price of $175,068 during the seven years studied, while homes sold on the multiple listing services brought an average price of $173,205, roughly equal when taking into account the study's margin of error, first reported in the New York Times Friday.

Although home sellers who listed houses on FSBO fetched a higher profit, the study found that houses listed by real estate agents sold faster.

"Sellers in Madison appear to sort themselves as expected across platforms, the more patient and astute ones going to FSBO, and those who need more help or a quick transaction going (to real estate agents)," Francois Ortalo-Magné, an associate professor of real estate and urban land economics at the University of Wisconsin in Madison and one of the three authors of the study, said in a statement.

The Madison study flies in the face of other real estate studies. A 2005 National Association of Realtors report found that, nationally, sellers got more money for their homes through real estate agents, the Times article said.

The realtor group found that FSBO houses sold for a median price of $198,200, but those sold through an agent went for an average of $230,000, or 16 percent more.

Moreover, the Times article cited a March 2003 issue of Realtor Magazine Online which referred to a 2002 survey which found "on average, people who sell their homes through a real estate professional receive a price 27 percent higher than people who sell their home themselves."