You Can Be Your Own Real Estate Agent and Pocket the Commission Yourself
• Stewart Clayton on owner selling (From our archives)

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FOR SALE 2 Bed Apt, Den, 2Bath, Bijou Patio Near Schools

So you own a home or condo and you’ve decided the time is right to sell. You’ve slapped a fresh coat of paint where needed and cleared the clutter in the closets. Perhaps through the years you have developed into a capable ‘do-it-yourselfer’ around your home, and as you debate about which real estate company to contact you think to yourself: "Hey, I can sell it on my own." Why go through the hassle of the ‘for sale by owner’ (FSBO) route? In a word: commission.

Although real estate agent commission can be negotiated on a case-by-case basis, their typical share is around five percent of the selling price. By selling your own home, it is conceivable that you could save several thousands of dollars, enough for a new car, for a luxurious around-the-world vacation, or, for the more practical among us, a bundle of money to apply towards the next home.

In addition to the commission there are more expenses you can expect to pay, collectively known as ‘closing costs.’ These include lawyer’s fees and disbursements and various government charges (including a land transfer tax). These costs quickly add up, adversely affecting your bottom line.

If you choose to use an agent, there are some facts you should know. The commission, which comes out of the seller’s proceeds, is typically split between the listing agent and the buyer’s agent based on terms set by the listing agent. The commission covers expenses for marketing, including classified ads, brochures or flyers, and listing fees, and also the agents’ time, including performing open houses. A listing agent charging a low commission may find it difficult to find a buyer’s agent to look at his/her property if they will end up with less than their typical share.

Don't forget to mention parking- sunsets- good neighbours -schools- people want to know what it's like to live on your street

Photo: © Sam North

Ads and listings that the agent puts out are more for promoting the home to other agents. This kind of promotional clout is impossible for a FSBO to match. However, two effective promotions that agents regularly use– and which a FSBO can effectively replicate (notwithstanding the time and hassle factors)–are the open house, and the delivery of flyers to the local neighbourhood. The Multiple Listings Service (MLS), once a treasured resource only available to agents, is now accessible to anyone via the Internet, which, in a few short years, has revolutionized the way homes are bought and sold. Although a FSBO cannot list in the MLS, there are numerous other ways to market a home on the ‘Net.

eBay.ca is one way for a FSBO to reach a large audience. Homes and properties listed on eBay cannot be bid on; they are advertisements only, with contact information at the end of the listing. For whatever reason, many of the listings on eBay are for sprawling mansions selling for a million or more.

There are several FSBO websites within Canada. Some of them look very amateurish and sometimes it isn’t clear how recently they have been updated. FSBO-BC.com offers a basic listing for C$39.00. This site has existed for more than five years, and has been growing consistently, according to Andrew, their spokesman. They are now getting repeat business. "People are coming back and listing a second home with us."
'"Homeowners can expect to save money," states Andrew. However, how much "depends on the value of the home and [the amount of money spent on] advertising."

PropertyGuys.com is causing a stir in Eastern Canada with their slogan of "0% commission." They are actually a FSBO listing service; for a flat fee the seller receives a package which includes a marketing plan and a listing on their site. They began in 1998 and have grown rapidly. Based in Moncton, New Brunswick, they are franchising their concept and gradually moving westward across the country.

Vancouver-based One Percent Realty Ltd., was formed in 1999 by Ian Bailey, after 20 years experience in the industry. As their name suggests, they charge a low commission — with a couple of conditions: there is a five thousand dollar minimum, and the seller pays all disbursements (including MLS fees and other advertising).

For the completely confident do-it-yourselfer, you can’t beat the legal forms from Self-Counsel Press: "Contract of Purchase & Sale for BC" can be yours for only C$6.95 at your local bookstore. Of course, you will still need a lawyer to check the paperwork.

Put yourself in the shoes of a buyer. The only real motivation for a buyer to seek out a FSBO home is the belief that they may find a bargain. They will likely expect at least a 2-3% discount from the prevailing market rates, thereby cutting into the seller’s commission savings. As the buyer typically does not pay the real estate agent any commission, they will readily seek an agent’s assistance when shopping around for a home.

Think carefully before you decide to list on your own. This is a transaction most people won’t be involved in more than a few times in their lives. Can you afford to lose the leverage and connections that a listing agent can bring in promoting your home? An agent’s marketing clout will get the word out that much faster than if your house is listed on an obscure, poorly-designed website. If your FSBO listing takes twice as long to sell, will the cost savings really be worth it to you?

http://www.propertyguys.com
One Percent Realty
http://www.onepercentrealty.com
For Sale By Owner-BC

(Hackwriters does not endorse any of the above and always seek advice before listing your home)

© Stewart Clayton November 2002 - who lives in New Westminster and is currently writing a novel

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