Home for sale by owner versus realtor

When it comes time to sell your home, the first thought that crosses most people’s minds is wouldn’t it be nice if I could sell it myself and save myself thousands in realtor commissions. In a hectic, fast paced world, the answer to that question has a harsh reality.

So when people ask me the question, “Why should I pay you to do something that I can legally do myself and save thousands”, I choose to educate rather than react.

The first step to selling on your own is to become educated about all the possible outcomes and challenges that you will face. I will briefly go over a few of those that I find to be most important.

1. Buyers looking at private sales are looking for a deal and they are not willing to pay top fair market value. It does not cost the buyer anything to use a real estate agent to find them a house through the MLS (Multiple Listing Service), so why then would a buyer choose to buy privately and do all the leg work of searching out the deals, viewing houses, negotiating, writing up offers, etc., all at a much greater risk of fraud or lawsuit. It’s because they are willing to make the sacrifice to save money.

2. Government regulations now require real estate agents to obtain copies of their buyer clients’ drivers’ licenses and other secure information in order to combat fraud. This security measure is not required from private buyers. Most real estate fraud is committed through the course of private deals and private sellers should be wary. For more information on real estate fraud, visit www.cisc.gc.ca. When you consider that your home may be your most valuable asset, it only makes sense to ensure that you protect that asset.

3. Private sellers and private buyers must be aware of their physical safety and should always practice utmost caution when showing or viewing a home. After all, do you really know ‘who’ this person is? I recommend all private sellers and buyers have a friend or family member present when showing or viewing a home. I’ve seen it time and time again where a family initially tries to sell on their own, but when they realize that this could mean their wife and children being alone in the home with complete strangers during showings, they ultimately choose to list with a real estate agent. In the grand scheme of things, you cannot put a price tag on your physical safety.

4. Selling a home privately is time consuming and if it doesn’t sell fast the bills can add up. On average it takes 2-3 months to sell a home, which is 60-90 days of advertising in your local newspaper. This also translates into many inconvenient evenings you have to be available for, spur of the moment viewings, and time on weekends. This means you can’t leave town in case ‘the’ buyer comes along that weekend. What is your time worth to you?

5. Selling a home requires a wide range of skills including knowledge of the law, marketing, sales strategies, price evaluation, ‘people’ skills, paper work and the list goes on. The most important tip you will ever receive with respect to your people skills when selling a home is this, leave the buyers alone! You have to be there in order to show the home, but buyers do not like this and they don’t want to hear your personal stories, they want privacy. Put yourself in the buyer’s shoes. Often sellers will ‘talk’ the buyer out of a deal. Real estate agents have the seller leave for most showings so the buyers can discuss the home in private and ‘try on’ the home.

6. When selling a home through a real estate agent, you’re paying for the service they provide so that you can sit back, relax and let them do all the leg work of attracting a buyer. Just imagine for a minute a world without the MLS, resulting in economic chaos, depressed markets and general confusion. Nobody would know the prices of properties, features, or even which houses are for sale. People would have no comparables and be taken advantage of and lose money. The purpose of the MLS is to enable the efficient distribution of information so everyone, sellers and buyers are all informed. The main benefit is maximum exposure = maximum dollars to you, which the buyer will pay because of the services involved. Private sellers don’t inherently know the market and the true value of their property; they get their prices by comparing homes listed on the MLS by the real estate industry. Why would you bite the hand that feeds you?

Success in the real estate industry depends on impeccable service, knowledge and experience. Many real estate agents possess these skills and if you do decide to work with a licensed real estate agent, you can be certain that they will take care of you and ensure that your best interests are taken to heart, so you can sit back, relax and have your house sold at top dollar or find the home of your dreams.