In: Real Estate News23 May 2008
Choosing to sell your own home places you in the role of the real estate agent for your property with the benefit of allowing you to keep the commission you would normally have to pay a real estate agent to sell your home.
This commission fee can be up to 6% of the total sales price of your home in Canada.
PropertySold.ca is a private sale real estate listing service helping people to sell their own homes using the private sale method. The For Sale By Owner method is not necessarily for everyone so please read the rest of this webpage for more information about the steps involved in the home sales process in Canada.
Private Sale – Can it Work for Everyone?
In short, no. Making the decision to buy or sell a home is one of the most important financial decisions people make in their lives. There is a large amount of money involved in a real estate transaction and making sure that as much of this equity ends up in your pocket as possible when you sell should be an important part of the decision making process.
In order to make the private sale method successful the home seller must do the work of a seller’s agent on their own behalf. As the old saying goes, "there are no free rides". As a private seller, you stand to gain a lot when you sell but only if you do your homework and diligently market your property.
Traditionally, home sales in Canada are brokered by a certified real estate agent. A seller’s agent & is responsible for;
& there are two types of real estate agents. Buyer’s agents who broker deals on behalf of home buyers and seller’s agents (also known as listing agents) who list and market properties on behalf of home seller’s. The 5% sales commission is split between these two parties when a successful deal is brokered. Both types of agents are not necessarily involved in every real estate deal such as in a private sale where the home seller performs the role of the listing agent and may or may not work with a buyer’s agent to broker a deal.
All of these services are essential to selling your home and most real estate agents are fully capable of providing these services in a highly professional manner. Typically, these services are provided for a set percentage of the total sales price of your home with the rate agreed to prior to listing a property with the agent. The fee is known as a commission and can be up to 5% of the total sales price of your property in Canada.
For home sellers to save this commission fee they assume the role of the seller agent for their property and either perform all of the tasks outlined above themselves or arrange a third party to perform these tasks on their behalf.
Let’s breakdown each of the roles a real estate agent plays in the home sales process and compare this with what is required using the For Sale By Owner method:
Qualifying Potential Buyers
A real estate agent will qualify potential buyers for you to ensure that only people who are serious about viewing your home and have the means to complete the sale if they are interested. This is a valuable service and can save you a lot of time over the for sale by owner method.
Using the FSBO method home sellers will have to qualify potential buyers themselves. The most important consideration is to ensure that a buyer is pre-qualified for a mortgage. This information can be asked for by the home seller and verified with the company issuing the mortgage.
Any sales offer received by the home seller should be given immediately to your real estate lawyer for review to ensure there are not clauses in the offer that especially favor the buyer.
Real Estate Lawyers
Real estate agents will refer you to a real estate lawyer for you if you do not have one of your own. A real estate lawyer will charge additional fees in addition to the agent commission when completing the sale but a real estate lawyer is required whether you choose to use a real estate agent or sell your home privately. A real estate lawyer will arrange all of the funds transfers and hold money in escrow for clients, draw up the sales contract and any disclosures associated with your property and review any sales offers you receive to ensure your best interests are represented. If you can find your own lawyer to help you with your real estate sale the services of a real estate agent may not be required in this regard.
Real Estate Agent or For Sale By Owner?
All of the tasks listed above are important and must be completed in any real estate transaction. Real estate agents are professionals and in most cases offer their services in a professional manner. If you are interested in the For Sale By Owner method you have to ask yourself if you have what it takes to diligently perform these tasks. Most home sellers who try the for sale by owner method and fail do not fully understand the amount of work involved in marketing a home.
The benefits are obvious but diligent marketing work is required in order to succeed.
If you would like help with your private home sale in Canada please visit our main website at:
* MLS® and Multiple Listing Service® are trademarks of the Canadian Real Estate Association. PropertySold.ca Inc. is not associated with CREA or their trademarks.
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