Personal Finance

How To You Sell Your Home On Your Own?

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Jr. Member
Dec 4, 2013
194 posts
15 upvotes
Vancouver, BC

How To You Sell Your Home On Your Own?

Why aren't there more FSBO listings on the MLS?
40 replies
Deal Expert
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Aug 2, 2010
15196 posts
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Here 'n There
First of all, we need to distinguish between FSBO with and without an MLS listing. I would not advise without at MLSA listing as you need to have exposure for your property and MLS is where all buyers and their agents go to in order to find homes.

The reason people don't sell their home on their own is because they think there is some mysterious 'marketing plan' to selling a home when there really isn't. An MLS listing (which you can pay just a flat rate for) is the main requirement and also that the buyer's agent get the typical 1.5-2.5% byers agent commission. People are scared as they think that they can't do it on their own and that they don't know all of the 'secrets' to doing so. Well, there aren't any. My thread at How to lower your Real Estate Agent Transaction Fees describes in detail how to sell your own home. As the agent shows in the above video (which is quite simplified btw) it's not rocket science at all (btw, skip the open houses, except for the real estate agents open house as people are going to be exposed to your home through MLS regardless of whether there is an open house. That's more of tactic for agents to market themselves, not your home. Also, who wants a bunch of strangers and tire kickers poking around your home and perhaps stealing small items?). Also, the agent in the video mentions that it takes work to find a photographer, etc. You can find local photographers, homoe stagers, etc easily with simple google searches in about 30 seconds.

Plain fear is the reason people don't sell their home themselves or they simply don't want to do the minimal amount of work and would rather pay 2.5% of their homes value for someone to do it for them. Way overpriced if you ask me! Some want to be hand held when the 'negotiation process' occurs, which is pretty simple really as you will see from reading my thread. The average price of a home has increased 100% in the last 9 years in Toronto and therefore the fees to list and sell a home has doubled too, while inflation has only been 16%. Who else has seen their wages double in that time doing the same job? In fact, most real estate agents (who are not blowing smoke up your behind) will tell you the amount of work to sell a home has actually gone down in that amount of time due to technology.

Btw, ask any agent what more is involved to sell a home than I have outlined in my thread above and you will get one big blank stare. There is nothing else. I've run circles around a few agents that have presented me with their marketing plans. All have admitted in the end that I have totally nailed it in the 'marketing plan' that I posted in my thread.

Proof of that is the fact that not one real estate agent, or anyone else, has been able to add one item to the plan.

Some say that the buyer will try to get a lower price if they know the seller is paying lower commission or is paying a flat rate. Well, it doesn't really work that way. These days, with most properties selling in a bidding war, the buyers have no way of co-ordinating that when they are bidding against each other (ie to all bid a certain % less in the same proportion than they would have if there was a higher commission for the selling agent and against each other). Anyone who claims that, and I am sure someone will in a post on here, has ZERO understanding of how real estate negotiation works. Buyer's agents couldn't care less about what the sellers' agent gets and remember, just because you may have a flat rate MLS listing you still have a seller's listing agent. The buyer's are bidding against eachother. To argue that the buyers, together in concert, will always adjust their offer by the discount the seller's agent gives on the commission (be it a % or a flat rate) is simply nonsense. Don't listen to these people as they are always real estate agents trying to protect their gravy train. This may be different where it's an actual for sale by owner with no MLS listing and there is only one bidder, but that's a rare case. As I mentioned, I do not advise not doing an MLS listing, especially these days when you can get one for as little as a couple hundred dollars listing fee.

Thankfully most of us are getting wise to the fact that real estate agents get paid WAY too much and will spin any story they can to protect their commission, including the one I just mentioned. Don't get sucked in!
Deal Fanatic
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Apr 20, 2011
5310 posts
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Vancouver
There are plenty of listings on www.kijiji.ca and to a lesser extent craigslist. I would advise both as a way to save money if you do not require a full service marketing plan.

Citizens don't do FSBO that often because they don't want the hassle of handling it all. In both BC and Ontario, there are so many options its not funny. From services like this $200 MLS guy http://www.fsbofsbo.ca/ to this http://onepercentrealty.com/ and all the way up to http://www.mikestewart.ca/

There are tons of secrets, some ethical and some not, such as inciting a bidding war, sending calls to the office only, search engine optimization, cash backs, etc. Having a few open houses provides a low pressure environment to explore without massive paperwork, and its time tested and useful. You could also consider hiring a staging company to make your place look presentable.

Most people will tell you costs and the work involved has gone up. Some brokers even charge everyone a 'technology fee' in addition to all the other fees. BC training is a bit easier as it takes less than a year, but in Ontario it has been changed to take 2 years or longer. For over a decade BC has had cheap commissions that start at half Ontario's default rates, with discount brokers even less than that. Some discount brokers spreading to Toronto as well.
Jr. Member
Dec 4, 2013
194 posts
15 upvotes
Vancouver, BC
I'm still a bit lost, so if a buyer presents me with an offer, and if I'm ok with the offer, do I simply bring that offer to a real estate lawyer to have him/her to prepare the contract agreement for me?
Deal Fanatic
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Apr 20, 2011
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Poor4Life wrote: I'm still a bit lost, so if a buyer presents me with an offer, and if I'm ok with the offer, do I simply bring that offer to a real estate lawyer to have him/her to prepare the contract agreement for me?
Yes. Or if you know a notary you are comfortable with, then he or she can prepare a contract as well.
Deal Fanatic
Dec 28, 2007
5348 posts
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Might as well use 1% realtors. Last home I sold only costed me 7k agent fee, and that includes both buyer and seller agent fees.
Deal Addict
Feb 27, 2011
2161 posts
726 upvotes
Poor4Life wrote: I'm still a bit lost, so if a buyer presents me with an offer, and if I'm ok with the offer, do I simply bring that offer to a real estate lawyer to have him/her to prepare the contract agreement for me?
Yes, a lawyer is the one thing you should always get. Also, I would suggest picking a smaller firm that you can actually talk to, any decently sized firm is just going to outsource your work to the articling students.

A house is no different than any other >$100,000 transaction.
Jr. Member
Dec 4, 2013
194 posts
15 upvotes
Vancouver, BC
WL1980 wrote: Might as well use 1% realtors. Last home I sold only costed me 7k agent fee, and that includes both buyer and seller agent fees.
If I use that service, how will the buyer's agent get paid?
Deal Fanatic
User avatar
Apr 20, 2011
5310 posts
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Vancouver
Poor4Life wrote: If I use that service, how will the buyer's agent get paid?
The buyers agent get an amount that varies depending on the individual agent but in many cases it is approximately half of the total fee.
Deal Guru
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Nov 30, 2009
12178 posts
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Toronto
For me, personally I'd hate to deal with annoying people/home buyers wasting my time, so I would fork over the cash for a realtor.
Deal Expert
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Aug 2, 2010
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Here 'n There
LostInTruth wrote: For me, personally I'd hate to deal with annoying people/home buyers wasting my time, so I would fork over the cash for a realtor.
Many people think like you and therein lies the problem. Just like them, you don't understand the process of selling a home. Even if you do a flat rate MLS listing, which will save you tens of thousands of dollars and way more than 1% realty or whatever % commissioned real estate agency you choose, it is the buyer's agent that shows the home, not you. They get the key code for the lock box and show the home while you are out (and you leave even if you have a fully commissioned agent). So, there are no 'annoying people/home buyers' wasting your time. Don't know where you got that from! You really need to read my thread on selling your own home and educate yourself (post #2).

Anyone who agrees with you is a real estate agent trying to preserve their gravy train. I am sure a few will post immediately that they agree with you. Don't believe the smokescreen!
Deal Fanatic
User avatar
Apr 20, 2011
5310 posts
484 upvotes
Vancouver
LostInTruth wrote: For me, personally I'd hate to deal with annoying people/home buyers wasting my time, so I would fork over the cash for a realtor.
Exactly. You couldn't have hit it more precisely than that. For people that want to cut costs all the way down, Craigslist and Kijiji are popular places with little fees. For others that want traditional service, there is onepercent realty which is substantially cheaper than a full service broker, but still comes with most of the usual refinements. Someone will talk about a lockbox which not all companies provide. In the case of fsbo.ca , they allow the buyer's agent to contact you, thus you need to do some work yourself which is totally the opposite of what that individual claimed. FSBO.ca is still a legit company for a basic mls listing.
Sr. Member
Jan 17, 2013
778 posts
379 upvotes
Poor4Life wrote: Why aren't there more FSBO listings on the MLS?
Here is one reason:

Some home owners bought their house at under $200,000 and now the house is worth over $700,000. These home owners can afford to let the realtor do the work and pay them a commission. There are two scenarios here (1) in the above example, the home owner made $500,000 if he sell his home, that few thousand dollars in commission is nothing. (2) Because it is a hot market here,sometimes with even bidding wars, the home owner can mark up the price of the house to include the commission. So he could sell the house at $710,000 and the additional $10,000 is to cover the commission.

With the commission taken care of, the home owner can spend his time, negotiating for his new house, if he has not bought one, or shop for furniture, appliance etc and let the realtor do all the work in selling his house. This is one reason why there are few FSBO on the MLS.
Sr. Member
Jan 17, 2013
778 posts
379 upvotes
Poor4Life wrote: Why aren't there more FSBO listings on the MLS?
Another reason is some people just didn't know how to list on the MLS without a realtor.
Member
Apr 22, 2015
388 posts
76 upvotes
Toronto, ON
They have done studies on this and most FSBO sell for 15-20% less than asking...you will get low ballers that figure they can get a good deal since you're saving commission. the 4-5% commission is not much really if you consider the fact that you will net more in the end.
Deal Fanatic
Jul 3, 2011
6517 posts
3798 upvotes
Thornhill
Three reasons. Those:
1) who believe it takes no talent to sell a property and that price is all that matters
2) who believe they’ll find a buyer willing to pay their price without discounting a brokerage’s commission
3) who cannot afford to pay even the bare minimum of anywhere between free and $800 for an MLS listing much less a buyer’s agent’s fee

are far fewer than those who do not fall into any of those categories.

It really is that simple, and to each their own.
Deal Fanatic
Dec 28, 2007
5348 posts
4356 upvotes
Poor4Life wrote: If I use that service, how will the buyer's agent get paid?
My 1% agent charged me $700 admin fee, and he and the buyer agent get paid $3000 each. In today's market where properties can be sold in less than 2 weeks, $3000 is reasonable for the amount of work they put in.
Member
Sep 23, 2011
298 posts
89 upvotes
Toronto
I will never be able to understand how people can easily pay 5% (okay, 2.5%, even 1%) of the sold price...
OK, maybe that amount doesn't look big comparing to the whole price, but it's still 10..20..30 thousand! That's your money!
How much time it takes to earn that amount of money for an average person? Why not try to save that money, go list on MLS without an agent, and if the house doesn't sell itself in a month, then you can give up and hire a realtor.
We sold our house in 2 days. No agent, no lawn sign, no commission, tens of offers, sold above asked thru multiple offer.

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