The process is typically not as easy as it is portrayed and there are several additional factors you should consider, that might cost you more than you are hoping to save.
Here are some things to consider when you are selling your home without a real estate agent:
- With DIY marketing plans, you must pay up-front: typically the fees are $1,000-to- $2,000, for pictures, videos, signs, etc. Most charge extra to have your home placed on the public site http://www.realtor.ca, which hosts MLS listings. However, you do not get a refund if your home doesn’t sell. With a real estate agent, if your home doesn’t sell, you pay nothing, even though the Realtor may have spent a lot of time marketing and using all of their own and their company contacts to sell your home.
- A bidding war is unlikely: Bidding wars are often the norm within many parts of the GTA. In virtually all cases, the home is sold by a real estate agent. The reason is that it takes experience to price the home properly and to create the environment from which multiple offers may materialize. Second, the process is fair, based on Board rules and procedures, so potential buyers are far more willing to participate in the process. Bids are done blindly, so each participant does not know the value or terms of the other offers. With a private seller, there is no duty of confidentiality, no rules or due process, so the seller can tell one buyer what another buyer is bidding. Buyers are highly unlikely to trust the process, eliminating the opportunity to create a bidding war if your home is in high demand.
- You negotiate on your own: When you do it yourself, it is difficult to know what a fair price is for your home. You might have to pay an appraiser to find out, or you will have to mislead and entertain real estate agents in order to gain their opinions and insights. Then there is the concern over the paperwork, legal issues, being available for showings. Do you have the time or the confidence to navigate all of these issues?
- Security: Have you considered the security of your home? Who are these people who are viewing your home, are they sincere, are they casing the home for valuables, can they afford your home, or are they just dreaming? Most Realtors only deal with buyers who have signed a Buyers contract (BRA). That means the buyer is serious about buying because they have committed to their agent. As a part of the process, the agent knows who they are, including the verification of their identity with photo ID. Additionally, a professional Realtor will insist that the buyer is pre-qualified for a mortgage, meaning that they will only view houses within their budget.
- What are the true savings: When a buyer realizes that you are saving commission, isn’t it natural or logical to conclude that they will want to split the savings? You both can’t share all of the savings, so it’s safe to suggest that you may not save as much as you are hoping to. From a buyer’s prospective, why would they do their own searching and negotiations, unless they were experienced or they were looking for a bargain? It does not cost a buyer anything to hire a real estate representative, who offers data, experience and expertise.
- What are your legal obligations: Sellers cannot rely on the term “Buyer Beware.” Even private sellers are legally required to disclose any known problems. Those who do not disclose things such as leaks, tragic events, grow houses and may other things often end up in court after a sale. Conversely, many buyers are skeptical that private sellers may be hiding something. Once again, dealing directly with buyers poses many challenges.
- Lenders are more cautious when they see a private deal: Lawyers have many private transactions collapse before closing because of problems with financing. Most often, private sales are subject to a full appraisal, because lenders are concerned that the buyer may have paid too much money. Sometimes the buyers are not qualified, or have bought firm and cannot arrange financing before closing. When both the buyer and seller are trying to navigate their way through a process that is unfamiliar, problems are likely to arise. When buyers are represented by agents, they are usually pre-qualified in advance so the seller can have comfort or obtain proof that they will have the money available to close the deal on time.
When you’re out for a walk this weekend have a look at the For Sale signs and see how many are represented by realtors. There’s a reason for that.
By all means, try and sell your house on your own, just beware that it’s not as easy as it looks. As you think about selling your property, you may realize that you face many choices. There are many different companies, hundreds of salespeople with various skills and years of experience and different commission rates. Whether you are selling your first property or if you have previous experience, you should set high standards when selecting the person who will represent you.
As a full time salesperson, I work hard every day to serve my client’s needs and provide my sellers with insights into pricing, marketing and negotiations that are invaluable. By offering consumers a choice of commission plans and a complete range of services, I provide my clients with high quality services at a fair price.
If you are thinking about selling your property, contact me for a free consultation. I can provide you with exceptional services and market your home, condo or commercial building to its fullest potential. I’d be happy to personally answer any other questions you may have. Remember, I will be here to assist you every step of the way!