Hello To All Our DIY Friends
Admittedly, there's no heavy lifting involved with selling real estate. However, the benefits of listing with a Realtor on MLS are multi-tiered and calculable.
Experience tells us that Private Sellers are a unique breed of individuals, and although they want to be like us, do not place a high importance on the services of a full time Realtor. Truth is, all real estate agents are not created equal and some simply are not worth the fees they charge. Understandably, one may erroneously conclude that they could do a better job themselves and save a few bucks in the process. Given the most ideal circumstances, amazing feats can occur, however a word of caution is in order.
Once Bitten, Twice Shy: Its easy to formed an unfavourable opinon of the real estate industry after a less than favourable result with an inexperienced agent. Did you know that 50 percent of newly licensed Agents leave the business within 2 years. The learning curve can prove more difficult for some. A newbie (in any industry) struggling to compete, and ultimately fails to thrive, or satisfy their clients. Don't be discouraged or allow this to stand in your road to success. Although regrettable, it is entirely avoidable when you ask for testimonials and a referral from a friend. Make sure you deal with an Agent who works and/or lives in your neighbourhood.
Suspicion:Often we hear that a Private Seller was asking too much and Agent's wouldn't list at their price. If a Home Owner is difficult and unrealistic, Agents are reluctant to invest their time and energy only to end up with an expiry. It is a Realtors perrogative to decline listings that have laitent defects that the Seller is unwilling to disclose. Homes with flooded basements and Grow Operations are popping up everywhere. Consumer may suspect a problem when the Owner has chosen not to go the conventional route. You maybe a teacher with some time off this summer and want to try your hand at conducting your own open houses or post a few pics on that Plumtree website you've heard about over the fence. But as time marches on and your property remains unsold, or the closing date for your new home quickly approaches, you may need to revert to plan B and consider your options more seriously. If you're testing the market, do not assume there are no buyers out there for your property until you get a professional consultation on stagging and pricing. You are not actually "in the market" if you are not properly priced and on MLS. A few strategic changes may be in order before you give up entirely. Running the risk of stigmatizing your property as it becomes stale and undesireable, is a costly mistake.
The fact is, the odds are stacked against private sellers achieving their goal and there are a few key points you should consider while taking the decision to go MLS or go it alone...and make no mistake you are alone in what may turn out to be one of the most costly errors you could ever make.
Opportunity Costs: Facts is 75% of all For Sale By Owner attempts, end in frustration and wasted time. You'll want to factor in increased costs for utilities, taxes and mortgage payments and failed offers on that perfect home you really wanted yet sold out from under you. Becoming a CASH Buyer yourself gives you increased bargaining power when you are negotiating the purchase of your next home.
Who are you attracting: The Average Private Purchaser is a die-hard bargain hunter looking to save every penny they can so how do you come out ahead of the game when the first thing they do is dip into the commission you consider profit and they consider negotiable. At the end of the day, what are you really saving for all your hard work?
Time Factor: Waiting for Mr and Mrs "Be-back"...they declare their love for your home, smile, wave good-bye and promise "We'll be back!"... never to be heard from again. If you have been waiting for Mr. and Mrs. Be-Back to return with an offer, you may be waiting a very long time and holding false hope. Allowing Buyer's to tie up your property and verbally commit you to sell to them without a written offer is the most common mistake made by novice Home Sellers.
Pride Goeth Before A Fall: If you've had the pleasure of showing off your home to a neighbour or friend who boasts on-and-on about your choice of wall colour, or your impressive garage, you may have realized right then and there, pride of ownership has its perks. Don't get fooled, often people tell you what you want to hear so as not to hurt your feelings. A savvy House Hunter although complimentary to your face, is making an important buying decision and will be scrupulously weighing their options when they go out the door. Serious Buyer's require constant reassurance; they aren't over paying for their investment, the home of the choice really is the very best of what they can afford. Consider your disadvantaged as a private seller who is out of the loop. The Buyer often requires a third party unbiased opinion before feeling confident to take such a leap of faith. The truth remains that every time a Seller emails for a status report or picks up the phone to solicit an offer IN WRITING, they appear pushy and desperate. Under these circumstances, you may be successful in encouraging an offer but chances are it will be a low one. Warning: If you have your lawyer draw up or process the closing of your private deal, it will likely cost you considerably more for lawyers fees.
Mental/Emotional/Spiritual Well-Being: While your own stress may be measurable and even tolerable at the prospect of saving money, you may be failing to look at the big picture. If your spouse is not onside with your vision and/or the kids are adversely affected by the uncertainties, your frustration and failed attempts, you may need to make apologies and amends for years to come. Every married person knows what that means in the long term. If you've imagined yourself golfing, boating, fishing, relaxing at the cottage, or chilling on a patio instead of fending off Real Estate Agents who want your listing and Tire Kickers who want to steal your home, you may be ready to list on MLS with a qualified, full-time, experienced Realtor whom you can trust to handle the details for you.
Safety First and Foremost: Our streets are not as safe as they once were and we don't let our kids out alone to speak to strangers, so why would you invite them into your home without a background check. Fact: All licensed Realtors are required to carry identification, be dually bonded and card their pre-qualified buyer's who have been pre-approved with a banking institution. A FINTRAC (Money laundering Act) is a law that means that Buyer's Agent compile sensitive and private information about the Prospective Purchaser by photocopying and personally vouching for the validity of the driver's license verified, address, date of birth and occupation of their client.
Choosing to Co-Operate with a Buyer's Agent: Believe it or not, today's well-informed Home Shopper, is loyal to their Agent who is actively searching and emailing potential listings. Buyer's have the right and in today's fast paced market demand the services of the best Realtors. Quite often once they are pre-qualified, they are recommended and finding it prudent to contract an Agent to represent them and negotiation their best interest. In an Agency Agreement, a Buyer's specifies their intentions to purchase exclusively through their chosen agent and commits to adequately compensated them for their efforts. Most often the specified amount is 2.5% of the selling price which coincidentally matches up with the most commonly offered amount on MLS. Please note: every element is negotiable in a real estate transaction and the Buyer Agency Agreement is an enforceable contractual obligation that both parties consider mutually beneficial to enter into and have agreed to respectfully consider binding. Suggesting to the Buyer, they cut their agent out of the deal, renig on their agreements or do anything else under-handed is not exactly the way to develop good faith. If anyone acts on your bad advise, you may inherit a liability that you didn't bargain for.
Net Effect: So, if the hottest buyers have an agent who will be expecting a portion of your saving plus their fees and the lawyers will be charging you both more, the banks and CMHC will be hesitant about the private sale so they will want an appraisal which costs the buyer more, then it takes longer get your offer, waive your conditions and if you loose out on the home you really wanted and spend more time searching and negotiating to ultimate take your second choice, how are you further ahead if you run the risk not to mention the stress and cost of carrying two properties or ending up homeless? This is our job, to ensure every aspect of your transaction goes smoothly.
In conclusion, selling your own home is your right as a Canadian Citizen however, with all the evidence firmly stacked against you and the downside clearly out-weighing the benefits, our question remains. Why would you want to?