Mark Albert

  416-520-8258 

No Agent - Know Agent

29 November 2018
Mark Albert

The myth about selling your home alone

 

A FSBO (For Sale by Owner) is a Seller attempting to sell their own home- with NO Agent.

Let’s take a deep dive into the prospect of saving the commission” and selling your home without an agent.

Here are some cautionary notes:

FSBO's want to save that big commission.

Sure, I get it. That’s one big bill at the end of the day and for what?  Well the - for what – is a big factor in saying yes or no to engaging an agent.

Did you know that there are,to date, nearly 60,000 agents on the Toronto Real Estate Board?  That means those thousands of agents can see and have access to MLS listings all over the GTA and beyond.  Some of these agents have more than one buyer/client looking to buy a house;  Some have none and some are buyers themselves. That's a whole lot of eyes on a property listed by an agent on MLS.  Do the math.

These are people  who, by the nature of their profession are dealing with real estate, and all those associated with the sale of real estate, daily. In my case, hundreds of transactions and past clients.  How many buyers would a FSBO be appealing to with a sign and perhaps something on social media?  What is a FSBO's real estate network and reach?

FSBO's might imagine that the buyer is already looking in their neighbourhood.

How many options does a FSBO have for sale?  In other words what is the inventory of FSBO?  In all likelihood, when you bought, you looked at several different options of houses for sale.  An agent might suggest their client widen their search in geography/neighbourhood, in price, in style. For example, a buyer might be looking at bungalows in North York, when the agent might suggest more suitable 2 storey family home options in Thornhill.

A FSBO, most likely, has only one item of inventory - their own home.

Finding the best fit Buyer

A seller attempting to sell their own home may not be able to properly vet or check the financial (purchase) ability of the Buyer.  A self-Seller only has their own house to offer as best suited to the Buyer. When the FSBO has a singular benefit and advantage and in fact is only interested in selling their own home, objectivity and credibility are clearly compromised and come into question. An agent would be able to offer comparable homes, highlight the best features and suitability or suggest changes and compromises for the home being considered.  In fact, a Buyer may come  not only from any part of the city, but from anywhere in the country or even the world. Did you know that Re/Max has offices all over the world?  A buyer can be sent the listing, that may include photo, feature and location details, for your property while sitting at their breakfast table in Australia!

 

Back to Saving Commission

One of the most common reasons for a Seller to sell their own home is to save that commission paid to the Agent. But what advantage does the Buyer have by going it alone, into this scary and not very credible transaction?  Most buyers, if brave enough to venture this alone, would hope to take that risk knowing that they will reap a considerable cost savings benefit – let's say something equal to the commission that Seller is not paying. Remember, the Buyer isnot paying any additional fee for the services of an agent.

Saving your money

In the end

FSBO's are more likely to attract more buyers to your home by engaging an agent ( That is by Not being FSBO's). 

Homeowners will attract more buyers to a, more than likely, validly priced, better marketed home, that is competitive and visible on the MLS system and to other agents.

Reduction of price will no longer be a buy direct and save factor.

Both Buyers and Seller are adequately, appropriately and professionally served by a real estate agent, while preserving confidentiality and performing their fiduciarily-bound best for their clients when offering advise and direction.

The likely result of the exposure and professional representation will likely exceed whatever the Sellers’ bottom line may realize without being so represented.

Technically the Buyer, by paying the commission-inclusive price, is paying the commission

Here's a simple demo:

 House on HOME STREET listed for $139,999.00

 *(where the last comparable property sold for $135,000.00 published on MLS listed and sold by real estate agents.)

 Agent/Seller sells to Buyer:  $138,000.00 (SOLD Price)

 FSBO sells to Buyer (who has calculated savings of 5% -about $7000.00 discount for buying direct- knowing Seller/Owner is not paying commission. Then a further cautionary discount (approximate $3000. for risk factor of having no professional, ethically or fiduciarily bound, involved to navigate pitfalls and issues)

FSBO selling to Buyer:  $129,000.00      

 The math:  possible $9000.00 Less than MLS market sold - if sold by FSBO

Just sayin'  -  knowing and engaging an agent may net a homeowner more than the risk and compromise for selling without an professional. How about an award-winning, broker status, agent with 33 years in the business and 25 years with the most successful real state franchise, Re/Max Realtron, in most areas in Toronto, under the umbrella of Re/Max- the most successful internationally recognized real estate companies.