Selling or buying a home without hiring a Realtor
People told me the other day that they would sell their own home because they wanted to save money on a Realtor.
What can I say? I’d like to save money as well, when I sell or buy something; wouldn’t we all? But do you think it is all about saving money or are there more things to consider when you are selling or buying a home without the help of a Realtor? And is it really true that a Realtor actually cost you money? Did you ever think of the fact that if you don’t use a Realtor, then it could cost you money?
Selling or buying a home is not as easy as many people think
Selling a house without a Realtor
Examples of the hassle that you as an owner have to go through if you do not hire a Realtor are getting phone calls from potential buyers, Realtors of potential buyers and Realtors who just want to solicit you for your listing. Depending on how aggressively you have priced your home, there can be many phone calls, each day. Then you have to arrange for all the prospects and showings of your home. Do you want to call each one of them for feedback?
How about the questions you can get, like:
- Is your Real Property Report up to date?
- Can I review your title?
- What do the bylaws say about my pet?
- Do Dower rights apply?
Most home owners do not know how to prepare ahead of time, so they can easily answer all of these questions.
Protection by a Realtor
And how is your protection? If you work with a good Realtor, you know exactly what you need to disclose by law to potential buyers. Also, your Realtor knows exactly what questions to ask potential buyers that they, by law, need to answer. If you do not disclose, for instance, material latent defects of your property, you might end up being sued later on. Negotiations are another important part of selling your home. If you do not ask the right questions to a potential buyer, the negotiations might end up negatively for you.
Pricing your home to sell
It is a fact that home owners often price their home too high. The reason is simple: they do not have the tools to establish market value. Because it is their own home, their objective value is often higher than the current market value. The consequences are that there are not many showings and, therefore, less chance of any offers coming in. The danger of this is, that you are now chasing the market down. By the time you realize your home is priced too high you may drop the asking price. But effectively you will be priced too high again for the current market if it is a buyer’s or a balanced market. You might end up not selling at all, or many (thousands of) dollars less than when you would have priced your home right the first time. That money would have been well spent on a Realtor in the end. And you would have been protected on top of that!
On the other side, if you price your home too low, you might end up with less money in your pocket than you should have. Again, money you would have been better off spending on your Realtor, with the legal protection as a bonus.
Pricing your home right needs research. We have several articles about pricing your home for selling. You can also request a monthly report with sale prices at no charge.
Buying a house without a Realtor
Let’s look at the buying part. A lot that counts on the selling part also counts for the protection a buyer would receive if s/he were to hire a Realtor. As a buyer,
- Do you know how to check the seller’s title?
- Where to look at the RPR or condo documents for potential problems?
- Understand the difference between a deposit and a down payment?
- Do you know the current market value of the property?
- Are you a good negotiator?
You just give the MLS numbers of the listings you like to your Realtor, and s/he will take care of all the rest. You just look at the homes and concentrate on making the right decision.
The Realtor you hire gets paid out of the proceeds of the sale.
Double commission for the selling Realtor
Some buyers think that if they do not hire their own Realtor, they will get a better deal on the home. This is a widespread misunderstanding of how the real estate dynamics work. Because if you do not hire your own Realtor, the listing Realtor will end up with double the commission instead of getting a deal for yourself. And, you are not protected by someone who only works in your best interest, as the selling Realtor only owes fiduciary duties towards his client, the seller.
Ultimately, selling or buying a home is not as easy as many people think; it is often in your best interest to at least interview one realtor when you are considering selling or buying a home.
If it would help you to make an informed decision on to do it yourself or to work with a professional, please feel free to contact us to discuss all that is involved, totally free of charge and obligation!
The above is general information only. It is not meant as legal advice upon which anyone may rely. If you have questions about a specific property or transaction, please speak to counsel for definitive advice.