Your home is your biggest asset, so naturally you’ll want to get a good price for it when it comes time to put it up for sale.
But you might be thinking that a great way to do that is to forego paying the real estate agent fees. After all, you’ll save money and make more profit this way, and hey, you’re pretty good at negotiating too. In short, you may be thinking of selling the home yourself — known in realtor circles as FSBO (for sale by owner).
While this can work out for some people, for most it really doesn’t. The main problem is that most people don’t know how the selling process works, and how much expertise is actually involved. Even if they’re prepared to put the time in, they don’t necessarily have the expertise to do a private sale right.
Selling your Ottawa home is not a process that you’ll want to mess up because it can cost you more than that commission you would have saved. So if you’re wondering if you need a real estate agent to sell your home, you can rest assured that it’s better to have a knowledgeable expert on your team than not.
Here are some of the things to look out for if you’re thinking about a DIY home sale.
How Does Selling Your House Privately Work?
Selling your own house privately in Ontario is not a simple undertaking. Regardless of how much a property is worth, it requires a huge time commitment. You’ll be responsible for ensuring that you research other home for sale listings and set yours at a fair selling price, not to mention negotiating with prospective buyers and buyer agents.
Whether you choose to use a realtor or sell your current property privately, you’ll need to find a real estate lawyer to finalize the sale. You’ll need a legal professional to help with determining closing costs, ensuring the sale terms are legal, liaise with the buyer’s lawyer, and prepare the deeds and other legal documents.
In the end, while you might save money on real estate agent commissions by selling your house privately, you might have ended up spending far more (in money, time, and effort) on the sale process, including staging your home, conducting open houses, negotiating over price, and much, much more.
1. You Might Overvalue or Undervalue Your Home
One of the big risks of selling your home without an agent is that you don’t know how much homes in your area are actually selling for. This is different from the asking price that anyone can find online.
Only realtors have access to information on actual selling prices. A good realtor (who buys and sells dozens of homes every year) also knows when to adjust prices up or down for different neighbourhoods as the market changes.
They also have the experience to weigh the comparable factors for your area. Your neighbour’s house may have differences that made it worth more or less than yours.
What’s the problem with inaccurate pricing? If you ask too high of a price for your house, it may not sell for months and months… or at all. Property listings have a 4 – 6 week shelf life. The longer a home stays on the market, the more likely prospective buyers are going to think something’s wrong with it.
When you’re selling your own home, it’s also way too easy to ask too high a price. After all, you have an attachment to it from years of living there.
Alternately, you could also wind up giving your buyer a huge deal by selling your home for far too little. It has happened, believe it or not. This Florida buyer was able to get a condo relatively dirt cheap from someone selling theirs privately because the seller simply didn’t know what other units in the same building were really going for.
2. You Don’t Get a Reality Check on How Your Home Looks
A second advantage to hiring a good realtor is that they’ll give you an honest second opinion about what buyers want. Their goal is to make sure the home sells, and will work with you to meet that end goal before the house even goes on the market.
They’ll also hire a professional stager to make sure your home looks its best to buyers.
You may have spent some time decluttering and doing some research on staging, but it doesn’t mean you can really produce an effectively staged home vs. selling your vacant home.
Staging is different from how you would normally decorate to make a home feel ‘homey’. Real staging uses placement, sight lines, and psychology to maximize the appearance of space and to help buyers picture themselves in your home.
Professional stagers might be providing you with some decor changes to make, but it’s less painful than having weeks go by without a showing. You may also get a mountain of bad feedback from potential buyers who walk away.
3. You’re Going to Have to Market Your Home All By Yourself
One of the risks of selling your house privately is that it takes a lot of work to market your home. For one thing, you’ll need professional quality photos of your home for your listing that show off how much space you have.
It’s essential to have your home listed in the Multiple Listing Service (MLS), so you’re going to have to find a good broker with a great reputation who will list you for a flat fee, since those private home sellers can’t list by themselves.
Then you have to call up various online sites, newspapers and place classified ads for your listing.
If you’re selling your home privately, you’re also going to need to craft a good “For Sale” sign and send out promotional materials with your contact details on it on as many advertising platforms as you can.
Whew! Sounds like a lot of work to do on your own, doesn’t it?
Good Realtors Have Bigger Networks and More Marketing Channels
Realtors have a massive marketing network they can tap into. For instance, at Paul Rushforth Real Estate, we have a buyer-in-waiting program where people who want to sign up to buy a house can do so. We can then match your home to these prospective buyers.
Our website also gets thousands of visitors each month, and most of those visitors are looking for homes. We also have an extensive print campaign, which will get your home featured in newspapers and magazines, both print and online. In a nutshell, we can get your home in front of more people than most realtors, let alone a rookie.
The other thing to keep in mind is all the marketing costs come out of the realtor’s commission – they’re not extra fees.
4. Dropping the Organizational Ball
For the sake of argument, say all goes well and potential buyers want to see your home.
You’re going to need to communicate with buyers and organize showings. Your evenings and weekends are tied up, and some of your days as well, if people want to see the home 9 – 5. Most people with jobs and families simply cannot handle the workload.
This doesn’t even take into account proving that someone who does want to buy your home has the financial ability to do so. You’ll have to know if a prospective buyer has a pre-approved mortgage to buy a home, and for what amount.
That means asking for a letter from a bank or lender that says how much they’re approved for. Then you’ll want to have a credit check done. If you don’t do these things, you’ll be spending a lot of time doing showings for people who aren’t even seriously ready to buy.
Negotiations and Sale
Some entrepreneurial-minded people think that real estate deals are like any other negotiations, and there are some similarities. But do you know how to negotiate a sale without scaring off your buyer? There are lots of houses, and it’s easy to lose the sale entirely.
If the home sells, there are financial tasks you need to handle, like making sure that one percent of the home’s cost is deposited with a neutral third party to ensure that the buyer just doesn’t walk away from the deal. There’s also the home inspection, and organizing paperwork with lawyers and mortgage agents.
If you go with a realtor, you shift all the personal vetting of buyers over to them, plus all of the time spent organizing appointments.
5. Turning Off Buyer’s Agents
One of the questions you’ll have to ask yourself when selling your home is, “Am I ready to work with a buyer who has an agent, even if I don’t?” If you do, you’ll have to factor in paying the buyer’s agent a commission on the home’s sale — usually three percent of the entire deal.
If you don’t want to pay commission to a buyer’s agent, then these agents will have no financial incentive to show your home to anyone. That will drastically reduce the number of people who see your property.
When you use an agent for selling your home, yes, you’re paying a commission. However, your agent and the buyer’s agent will divide up that commission.
6. Not Ready For Multiple Offer Situations
Canada’s housing market is moving at a faster pace than ever before, and selling house privately means you have to be up to speed on the different tactics some real estate agents will use.
Some buyers will try to make an offer before your specified offer presentation date (known as a “bully offer”). There are plenty more bully offers being made nowadays due to the lack of inventory — Ottawa buyers are snapping up anything and everything they can get their hands on. Sellers who want to put a stop to bully offers on their property can sign a Form 244—if you have an agent fielding your offers, that is.
When multiple offers are expected, you as the seller may choose to sign Form 244. This allows you to review all the offers at the same time; if you don’t sign Form 244, real estate agents are legally obligated to present any offer they receive to you within a strict time frame.
In the case of multiple offers, buyers may try to win you over by putting in offers way above the asking price, forgoing any conditions on the sale, or offering more flexible closing dates..
Multiple offer situations can quickly get out of hand for sellers. You’ll have agents, or the buyers themselves, bombarding you with offers, telling you why you should accept theirs. Without experience, you could be persuaded by a buyer’s agent into leaving money on the table. With a real estate agent representing your interests, you could potentially get tens of thousands more for your house!
Price negotiations are extremely difficult, so skip the regret and the stressors of a private home sale by hiring a real estate agent with experience in multiple offer situations.
7. Lack of Knowledge of Documentation
Selling a home involves a lot of paperwork and legal fees and processes. Without the guidance of a real estate agent, you may not be aware of all the necessary legal documents or how to properly complete them. The closing process is complex, and it can involve a number of steps that are typically handled by lawyers or legal professionals. If you don’t know the finer points of each stage of the process, it can lead to delays, or legal complications down the line, including disputes with buyers or even legal action.
Below are some of the steps and documents you can expect in the closing process, which your real estate agent will handle on your behalf:
- Agreement of Purchase and Sale
- Title Search and Status Certificate Review
- Requisitions
- Title Insurance and Mortgage Preparation
- Statement of Adjustments
- Final document/fund exchange, transfer registration, and mortgage recording
Each of these documents has specific legal requirements and implications, and failure to complete them correctly can lead to serious consequences. Without the guidance of a real estate agent who is well-versed in these legal matters, you may inadvertently overlook crucial steps or make errors in the documentation process.
For example, failing to disclose known defects in the property could result in legal action from the buyer after the sale has been completed. In Ontario, you’re legally required to disclose certain issues, including if the home has asbestos, mould, or structural damage.
Similarly, incomplete or inaccurate paperwork may delay the closing process or even invalidate the sale. Without expert knowledge of local real estate laws, you may find yourself navigating unfamiliar legal territory in trying to sell your own home, increasing the risk of costly mistakes or disputes throughout the entire process.
8. An Emotional Rollercoaster
Selling a home is often an emotional journey, filled with nostalgia, attachment, and uncertainty about the future. For many homeowners, their property holds sentimental value and represents a significant chapter of their lives, so it’s to be expected that the process of selling can evoke a range of emotions, from excitement about the prospect of a new beginning to sadness about leaving cherished memories behind.
Handling the sale of your home without the support of a real estate agent can amplify these emotions and add additional stress to an already challenging process.
Negotiating with potential buyers, fielding inquiries, and managing the logistics of showings and open houses can be time-consuming and emotionally draining. Moreover, dealing directly with buyers, particularly during price negotiations, can lead to heightened tension and conflict. You want someone on your side who is capable of negotiating for the fair market value of your home without having an emotional attachment to it.
Real estate agents not only provide practical assistance with the logistics of selling your home but also offer emotional support and guidance throughout the selling process. Their expertise and experience can help alleviate stress and uncertainty, allowing you to focus on the excitement of moving forward with your life.
9. Unvetted Buyers
One of the advantages of working with a real estate agent is their ability to screen potential buyers and ensure they are qualified and serious about purchasing your home. Real estate agents typically require buyers to provide proof of pre-approval or financing before showing them a property, helping to filter out individuals who may not be genuinely interested or financially capable.
When selling privately, you don’t have an experienced safeguard against unvetted buyers. Without proper screening, you may find yourself dealing with individuals who are not qualified to purchase your home or who have unrealistic expectations. This can result in wasted time and effort on your part, as well as frustration and disappointment if deals fall through due to buyer financing issues or other unforeseen obstacles.
Unvetted buyers may be more likely to make lowball offers or engage in unethical behavior, such as attempting to renegotiate the terms of the sale at the last minute. Real estate agents are skilled negotiators who can advocate on your behalf and help ensure that you receive fair and competitive offers from qualified buyers, reducing the risk of dealing with unscrupulous individuals.
A Good Real Estate Agent is Worth it
As you can see, there are serious downsides to trying to sell your home yourself.
Instead, why not talk to the experts at Paul Rushforth Real Estate? It’s free to chat, and there’s no obligation.
Paul Rushforth Real Estate has a real advantage because our 30-person team has superior experience. We have specialists who take care of things like marketing, qualifying buyers, and paperwork. It allows our agents to spend 100% of their time researching the Ottawa housing market and doing what they do best: selling houses.
We offer a free home appraisal service, so if doing research all by yourself to see what the market’s doing is just not for you, fill out our online form and let us take care of it.
We offer a guarantee that your home will be sold before you take possession of your new one. If your goal is to sell your home quickly at the best possible price, we will make it happen.