Pseudoblog - anatomy of a private sale
When my wife and I decided to move to Mississauga, we debated a private vs. an agent-based sale, so our first step was to interview agents from our town to see what they were going to do for us. In speaking with them, we learned that they have no "marketing plan" for a house. They stick a sign in the ground, add your microscopic ad to the hundreds they pump out every week, and list you with MLS. That last step is the only thing I'm interested in. Eyeballs are crucial. We also were able to obtain recent comparable sales info from the agents as well as their "expert optinion" in order to better assess our list price.
In the end, we decided to try it privately, for a variety of reasons.
1. We're cheap. Saving how ever many thousands of dollars we could would be a huge benefit for us.
2. I work from home anyway. I'm here, I can respond to an inquiry at the drop of a hat, and I can keep the place clean in a quick a timely manner for a presentation.
3. We're not time-pressed. We have no "due date" for a move, so if it took longer to sell than it might through MLS, we're not in trouble.
4. I dislike real estate agents. I've met maybe 30 of them during my buying and selling of houses, and I feel that perhaps 4 of them knew more about real estate than I do...and I don't know much at all! I AM dealing with a buyer's agent in Mississauga right now who is great, however. There are true experts out there, but I think the last few years of booming sales has flooded the market with a lot of bottom feeders.
5. When it comes to the actual presentation and sale of our house, I don't think anyone can do a better job than I can. I know more about the house and area than any agent in order to inform a buyer, and I have my best interests at heart when it comes time to close a deal.
Having decided that, we needed to develop our own marketing plan. This started with an online resource, and also had newspaper ads, free website listings (craigslist and kijiji) and local signage. In the end, things happened fast enough with the online sale that we didn't need to advertise elsewhere.
We assessed the online private sales options for our area, and broke them down as follows:
1. PrivateRealEstate.ca - horrible technology, ugly website, bad search technology.....but they have more listings and sales in my neighbourhood than any other private sales site, and the houses there seemed to be getting a lot of views (every page load is a recorded hit though, so I'm sure a lot of owners are responsible for a tonne of hits on their own property). Rather expensive compared to the others, at $699 (they are now at $595)
2. PropertySold.ca - much better looking site, with far superior search technology (MLS really needs to add a Google Map search similar to what these guys and bytheowner.ca have) but they had exactly one listing in Dundas, and it had been there for a while.
3. ByTheOwner.com - again, great looking site, with better search technology, but NO listings in Dundas at all. Cheap at $299 (now with a $100 discount, for $199)
I phoned a few people who were currently listed with PRE.ca and asked them about their selling experience. They were quite pleased with the level of support and amount of interest they were getting, and one woman was actually in the process of closing after a few weeks of being on there. The amount of action in my area was what prompted us to pay the big bucks for PRE.ca.
Here's what happens when you list with PrivateRealEstate.ca: (My house listing, for reference)
1. The same day as you list, your file is opened and your page goes up. You can immediately put in the description and particulars for the house via your "admin page" but you cannot upload photos yourself. They call you back to book an appointment with their "professional photographer" who will also drop off your signs, info book, copies of documents, etc.
2. The next day, the photographer came by, ran through the house with a crappy camera shooting pictures like a madwoman, dropped off the signs (nice enough, and plenty of them), installed the lawn sign, and gave me all the information, while repeating again and again that they do NOT help you with any sales/legal/closing advice. You do get a free one hour meeting with a local lawyer to review an offer, ask advice, whatever, but I didn't use that.
3. Amazingly, some of the pics the woman took were actually usable, but I replaced the majority of them on the site with ones I took myself. You cannot do this yourself through the admin page - you have to actually email them over and communicate how you want them displayed and laid out. There is no functionality to describe what you're looking at in the pics....they have to speak for themselves.
4. That's it. You are officially finished with PRE.ca, other than fielding calls and email received via their site. If you do sell while listed with them, you are obliged to leave your sign on the lawn with the "SOLD" insert for 2 weeks after your sale.
We received our first phone call before the pictures were even online, and our first visit two days after we listed - that was exciting in the extreme! In the first two weeks, we received probably 15 phone calls and 10 emails about the property, and had about 8-10 families come through. Our house was listed on Feb 6th, by the way. On Feb 8th, we had our first visit, and that visitor ended up making an offer on the house one week later.
The offer process:
I had my lawyer draft an offer to purchase for my house, which is not completely normal, but I wanted to be sure I was being protected. I essentially filled in the blanks for the woman who wanted to purchase it, and then she took it to her lawyer to review. We had a very brief negotiation over price and inclusions with her. We had already made up our mind what price we would accept, and which appliances in addition to that. She offered, we went halfway, and that was that. Conducting this negotiation face to face is 100x less frustrating than doing through intermediaries....and involved less paperwork, fewer faxes, and 98.3% less BS. The home inspection showed almost nothing abnormal for a 40 year old home. However, there were enough little things to worry her, as she was now on her own and didn't have anyone to take care of such things. This is where the problems began. She wanted to renegotiate the price, which we weren't willing to do. She was having trouble with financing. Suddenly, BS had crept into the deal. She was dragging things out to the very limit of the offer expiry. We let the offer die without extension, and had our lawyer return the deposit.
The second offer: (AKA the TSN Turning Point)
This is the feel good part of the story. On the day that the offer was to expire, one of the people who had expressed interest in the place phoned to say that they happened to be in town, and what was the status of the offer? We told them it was near expiry, and they asked to come by. One rushed housecleaning later, we invited them (and their parents) in for a tour. After my usual 30 minute tour job, they asked for some time alone in our living room, and then asked if we would be willing to discuss a non-binding offer than we could firm up after expiry of the first. These people were amazing - complete straight shooters, no games, and they were ready to buy the house outright, with no conditions. Also, their offer was our asking price, with fewer inclusions than the first offer, and more flexibility on the closing date. The next day the offer was formally written up (using the same offer my lawyer had drafted for me, modified to remove conditions), reviewed by their lawyer, and we were done. The day after that we had the home inspection, they signed off on the waiver (also prepared by my lawyer in advance) and we closed the deal. Completely painless.
Thoughts on the offer process:
- Most buyers won't know what they are doing, and need to be told how to make the sale happen. You need to have all the paperwork prepared in advance, from offer sheets to waivers, and let them know what needs to be done with them, in what order, and where the copies need to go. You need to know how to accept a deposit (for us, it was a cheque written to my lawyer, in trust) and how much you need (for us, 2.5% of the sale price...this could be lower in small towns, higher in hot markets). You may have to do some pushing on timelines, make sure they are setting up their inspection, etc. I cannot stress enough the importance of providing the paperwork for them. If they walk out with nothing but the idea that they need to "contact their lawyer to get something drawn up" it's not going to happen, or at least not in a timely manner.
- Be realistic, polite, and make sure the process is painless and friendly.
- Be ready for frustration.
In the end, it took us exactly one month, to the day, to close our sale. We got our asking price, no conditions, and are really happy with the people that bought the place. They have also written us to tell us "...thanks to you both for being such a pleasure to work with. What an easy and enjoyable experience!" (actual quote from an email) which is nice.
I highly recommend the private sales route, but think about the situation I described at the top of this horribly longwinded post and decide for yourself if might be in your best interest to distance yourself from the sales process, if you have enough time to do it right, etc.
In the end, we decided to try it privately, for a variety of reasons.
1. We're cheap. Saving how ever many thousands of dollars we could would be a huge benefit for us.
2. I work from home anyway. I'm here, I can respond to an inquiry at the drop of a hat, and I can keep the place clean in a quick a timely manner for a presentation.
3. We're not time-pressed. We have no "due date" for a move, so if it took longer to sell than it might through MLS, we're not in trouble.
4. I dislike real estate agents. I've met maybe 30 of them during my buying and selling of houses, and I feel that perhaps 4 of them knew more about real estate than I do...and I don't know much at all! I AM dealing with a buyer's agent in Mississauga right now who is great, however. There are true experts out there, but I think the last few years of booming sales has flooded the market with a lot of bottom feeders.
5. When it comes to the actual presentation and sale of our house, I don't think anyone can do a better job than I can. I know more about the house and area than any agent in order to inform a buyer, and I have my best interests at heart when it comes time to close a deal.
Having decided that, we needed to develop our own marketing plan. This started with an online resource, and also had newspaper ads, free website listings (craigslist and kijiji) and local signage. In the end, things happened fast enough with the online sale that we didn't need to advertise elsewhere.
We assessed the online private sales options for our area, and broke them down as follows:
1. PrivateRealEstate.ca - horrible technology, ugly website, bad search technology.....but they have more listings and sales in my neighbourhood than any other private sales site, and the houses there seemed to be getting a lot of views (every page load is a recorded hit though, so I'm sure a lot of owners are responsible for a tonne of hits on their own property). Rather expensive compared to the others, at $699 (they are now at $595)
2. PropertySold.ca - much better looking site, with far superior search technology (MLS really needs to add a Google Map search similar to what these guys and bytheowner.ca have) but they had exactly one listing in Dundas, and it had been there for a while.
3. ByTheOwner.com - again, great looking site, with better search technology, but NO listings in Dundas at all. Cheap at $299 (now with a $100 discount, for $199)
I phoned a few people who were currently listed with PRE.ca and asked them about their selling experience. They were quite pleased with the level of support and amount of interest they were getting, and one woman was actually in the process of closing after a few weeks of being on there. The amount of action in my area was what prompted us to pay the big bucks for PRE.ca.
Here's what happens when you list with PrivateRealEstate.ca: (My house listing, for reference)
1. The same day as you list, your file is opened and your page goes up. You can immediately put in the description and particulars for the house via your "admin page" but you cannot upload photos yourself. They call you back to book an appointment with their "professional photographer" who will also drop off your signs, info book, copies of documents, etc.
2. The next day, the photographer came by, ran through the house with a crappy camera shooting pictures like a madwoman, dropped off the signs (nice enough, and plenty of them), installed the lawn sign, and gave me all the information, while repeating again and again that they do NOT help you with any sales/legal/closing advice. You do get a free one hour meeting with a local lawyer to review an offer, ask advice, whatever, but I didn't use that.
3. Amazingly, some of the pics the woman took were actually usable, but I replaced the majority of them on the site with ones I took myself. You cannot do this yourself through the admin page - you have to actually email them over and communicate how you want them displayed and laid out. There is no functionality to describe what you're looking at in the pics....they have to speak for themselves.
4. That's it. You are officially finished with PRE.ca, other than fielding calls and email received via their site. If you do sell while listed with them, you are obliged to leave your sign on the lawn with the "SOLD" insert for 2 weeks after your sale.
We received our first phone call before the pictures were even online, and our first visit two days after we listed - that was exciting in the extreme! In the first two weeks, we received probably 15 phone calls and 10 emails about the property, and had about 8-10 families come through. Our house was listed on Feb 6th, by the way. On Feb 8th, we had our first visit, and that visitor ended up making an offer on the house one week later.
The offer process:
I had my lawyer draft an offer to purchase for my house, which is not completely normal, but I wanted to be sure I was being protected. I essentially filled in the blanks for the woman who wanted to purchase it, and then she took it to her lawyer to review. We had a very brief negotiation over price and inclusions with her. We had already made up our mind what price we would accept, and which appliances in addition to that. She offered, we went halfway, and that was that. Conducting this negotiation face to face is 100x less frustrating than doing through intermediaries....and involved less paperwork, fewer faxes, and 98.3% less BS. The home inspection showed almost nothing abnormal for a 40 year old home. However, there were enough little things to worry her, as she was now on her own and didn't have anyone to take care of such things. This is where the problems began. She wanted to renegotiate the price, which we weren't willing to do. She was having trouble with financing. Suddenly, BS had crept into the deal. She was dragging things out to the very limit of the offer expiry. We let the offer die without extension, and had our lawyer return the deposit.
The second offer: (AKA the TSN Turning Point)
This is the feel good part of the story. On the day that the offer was to expire, one of the people who had expressed interest in the place phoned to say that they happened to be in town, and what was the status of the offer? We told them it was near expiry, and they asked to come by. One rushed housecleaning later, we invited them (and their parents) in for a tour. After my usual 30 minute tour job, they asked for some time alone in our living room, and then asked if we would be willing to discuss a non-binding offer than we could firm up after expiry of the first. These people were amazing - complete straight shooters, no games, and they were ready to buy the house outright, with no conditions. Also, their offer was our asking price, with fewer inclusions than the first offer, and more flexibility on the closing date. The next day the offer was formally written up (using the same offer my lawyer had drafted for me, modified to remove conditions), reviewed by their lawyer, and we were done. The day after that we had the home inspection, they signed off on the waiver (also prepared by my lawyer in advance) and we closed the deal. Completely painless.
Thoughts on the offer process:
- Most buyers won't know what they are doing, and need to be told how to make the sale happen. You need to have all the paperwork prepared in advance, from offer sheets to waivers, and let them know what needs to be done with them, in what order, and where the copies need to go. You need to know how to accept a deposit (for us, it was a cheque written to my lawyer, in trust) and how much you need (for us, 2.5% of the sale price...this could be lower in small towns, higher in hot markets). You may have to do some pushing on timelines, make sure they are setting up their inspection, etc. I cannot stress enough the importance of providing the paperwork for them. If they walk out with nothing but the idea that they need to "contact their lawyer to get something drawn up" it's not going to happen, or at least not in a timely manner.
- Be realistic, polite, and make sure the process is painless and friendly.
- Be ready for frustration.
In the end, it took us exactly one month, to the day, to close our sale. We got our asking price, no conditions, and are really happy with the people that bought the place. They have also written us to tell us "...thanks to you both for being such a pleasure to work with. What an easy and enjoyable experience!" (actual quote from an email) which is nice.
I highly recommend the private sales route, but think about the situation I described at the top of this horribly longwinded post and decide for yourself if might be in your best interest to distance yourself from the sales process, if you have enough time to do it right, etc.
