For Sale By Owner. AKA: Seller Beware.
You’re probably familiar with the term, Caveat Emptor; Buyer Beware. But if you’re entertaining the notion of trying to sell your home without the help of an experienced realtor, you should absolutely consider the flipside; Caveat Vendor. In no uncertain terms, Seller Beware!
OK. So you’ve looked at the For Sale By Owner (FSBO) option and, from a distance, the view looked pretty good. Saving approximately 5% in realtor commissions on an average $400,000 home nets out to a cool twenty thousand dollars in your pocket. Who wouldn’t love that? But, at the risk of using too many cliché’s, love is blind. Only in this case, it can be downright deaf and dumb too.
Blinded By The Bling.
Hey, who’s not to say you can’t save on commissions. All you have to do is an expert job of selling your property, negotiating the deal, and closing at the price you want. And all of that is very possible. That is, if you’re in an extremely high demand area and your location is highly visible. But if you’re like most FSBO sellers, getting the exposure you need, without the benefit of the MLS listing service and a realtor network, is like a tree falling in the woods; no-one really hears or sees it, unless they happen to be right there. Given that the majority of buyers learn about properties through their realtors, or by doing their own homework online through the MLS, FSBO sellers get minimal exposure at best. And that often translates into substantially lower prices. How much lower?
“An NAR study found that, because homes sold without professional representation often aren’t exposed to the open market, “for-sale-by-owner” homes sold for less, while homeowners who used a real estate agent sold their homes for 25 percent more than the FSBO homes…” Vicki Cox Golder, President, National Association of Realtors®, July 15, 2010
And the chasm is widening!. According to the 2011 National Association of Realtors Profile of Home Buyers and Sellers, FSBOs accounted for 10% of home sales in 2011. The typical FSBO home sold for $150,000 compared to $215,000 for agent-assisted home sales. That’s more than a 40% difference in price!
Low Bids And High Anxiety.
There are dozens of horror stories about FSBO sellers not being aware of ins and outs of negotiating and closing the deal, or of real estate legal issues that can arise after the sale – until it’s too late. That makes FSBO homes a prime target for predatory buyers looking to swoop in and take advantage; trying to get the property at a bargain basement price while working the contract in their favour so they can come back to the seller for even more money the moment anything goes awry. So, not only does a FSBO property generally sell for less, the sale can end up costing the FSBO seller (and buyer) for years to come.
“It’s been insane, I’ve had three different lawyers, and I’m out at least $10,000 dealing with this,” Alan Jacobson, newspaper design consultant (Quoted from a report on his FSBO experience several years ago).
In fact, the 2011 National Association of Realtors Profile of Home Buyers and Sellers showed that getting the right price and understanding and performing all of the necessary paperwork were #1 and #2 on the list of the Most Difficult Tasks for FSBO Sellers. Two pretty compelling reasons why more than 85% of FSBO sellers end up listing with an agent.
99% Inspiration, 1% Persperation.
While the majority of FSBO sellers eventually see the light and realize the value and peace of mind that comes with a good realtor, there are the enlightened many that are getting the best of both worlds; saving on realtor commissions while enjoying all of the marketing expertise and resources available from the top Canadian realty brands. That’s where OneForAll.ca comes in. The online service is really taking the GTA by storm – introducing sellers to top brand realtors who are offering their substantial services to sell homes for top dollar, and for only a 1% selling commission. You may have heard of the 1% alternative being offered by small independent realtors, but never before have the resources of the top brands been put to bear for the Canadian home seller. That is, until now. The most recent OneForAll.ca- assisted match paired a home seller with a representative from ReMax – the biggest and most successful real estate company in the world.
What’s In A Name?
The question we get asked most often is: Why? Why would a name brand realtor be willing to sell a home for only 1% selling commission versus their usual 2.5%? The answer is really very simple: Because it absolutely makes good business sense to do so. There are thousands of agents willing to work for a lower commission for the opportunity to make a new contact and open the door to future business. And we’re not talking small one and two person operations that may have the expertise, but often lack the marketing and financial clout of the big boys. These are agents that belong to the top brokerages in Canada, that can market aggressively for top exposure and, ultimately, top dollar for your home. So there’s no need for Caveat Emptor or Caveat Vendor. The only Latin these home sellers are becoming familiar with is: Carpe Diem.
Carpe Diem; Seize The Day.
If you’ve considered the FSBO route to sell your home, seize this opportunity to reconsider. Leave the marketing, presenting, showing, open houses, negotiating, closing and contracts to the people who know it best; the realtors. And you’ll soon end up leaving your home – with security in mind, and top dollar in hand.