In: Real Estate News25 Jul 2011
One of the most common Real Estate questions we receive at PropertySold.ca is “How can I sell my home myself and advertise on MLS.ca/Realtor.ca?”. This is a popular real estate question because home sellers want to be able to advertise their property on MLS.ca/Realtor.ca, but also save money.
Many people these days want to do as much work as possible in order to save as much money as possible. This is true with many different industries. Many people will do their own house painting, their own landscaping, and their own online banking and online travel bookings. They have the choice to pay a professional to do this work for them, but they choose to do the work themselves because they want to save money. This is true when it comes to selling a home privately.
Some people might say that they sell privately because they enjoy the interaction with the buyers, or that they don’t trust real estate agents. However, the main reason that people sell privately is to save on the real estate commission.
However, in selling privately and saving money, sellers still want the maximum exposure for their home. They don’t want to limit the pool of buyers because less buyers sometimes means less demand for a home, and this can affect selling price. So people want to be on MLS.ca and still save money.
There are two sides to the “real estate commission” and thus two areas to potentially save money. The first side is the “listing side”. Typically the “listing side” of real estate commissions costs sellers 2.5% . This “listing side commission” is added to the other side (the 2.5% paid to the buyer’s agent) to bring the total cost to the seller to 5%. The “listing side” is usually the easiest side on which to save money. In Toronto, will allow real estate sellers to list their home on MLS.ca for only $499.95, plus the cost of a PropertySold.ca listing is included in the price.Thus, the cost to list a home on MLS.ca is now only $499.95. The seller has reduced the cost from 2.5% to $499.95.
The other “side”, as mentioned above, is the commission offered to an agent for bring a successful buyer. The cost for this, again, was typically 2.5%. This amount is slightly more difficult to save. Sellers need to ask themselves a few questions. For example, what % of buyers are using agents. The seller should also ask themselves if an agent will be less or more motivated to bring their buyer to a home that is offering 2.5% vs a home that is offering less than 2.5%. Buyers get to choose exactly how much they want to offer as commission to an agent to bring a buyer. Some buyers choose 2.5%, some choose 2%, some choose $0.
When considering using or not using an agent, you must think about some facts. In Toronto, there are approximately 30,000 real estate agents and brokers. These agents/brokers are responsible for 80,000-90,000 home sales per year. Other facts include that 85% of buyers begin their home search online. This means that although agents sell thousands of homes every year, there is a chance that a buyer will see your home for sale and bypass the real estate agent.
The difficult part about selling a home these days is that the market is becoming more fragmented. In the past, selling privately was not common. Everyone just paid 5-6% and that was the way it went. But today, there are options to save money, but there are no guarantees. People want to know “how often” a home sells privately or “how often” an agent is involved. There is really no statistics available on these questions. The large factor that drives people to try selling privately, is that they can alway switch to the more traditional method of a full service agent if needed. If you try selling privately, you might be successful and save thousands of dollars in real estate commissions. If you are not successful, then you can choose to pay commission and rely on the standard traditional real estate services.
For all of your real estate questions please call PropertySold.ca Inc. today at:
1-855-900-SOLD and speak to a customer service representative. We have licensed real estate professionals on staff ready to take your call right now. List your property for sale by owner today. New! We now accept real estate listings from real estate agents and new home builders & developers. More Information »
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