A national spike in private home sales has reignited the debate around the value of hiring a realtor versus trying to sell your home yourself.
Even though the private sale market has grown, realtors are still the best bet in terms of selling or buying a home without issue.
In Vancouver, the country’s busiest and most lucrative housing market, the number of For Sale By Owner (FSBO) listings climbed from 7,154 in 2014 to 8,561 in 2015, and is expected to increase again this year.
Even though the uptick in FSBO listings appears promising for those who have the notion that they should list their own homes, listing numbers don’t reveal how many of those homes actually sold, if the seller received the price they were asking for or how long the house remained on the market.
The popularity of private sales (For Sale By Owners) has been credited to the rise of Do-It-Yourself television programs, combined with the internet and digital tools that provide resources for homeowners to theoretically sell their own home. While the power to sell anything is essentially now in the palm of our hands, experts advise against listing a home privately, especially in heavily saturated markets such as those in Vancouver and Toronto.
The current housing bubble in Vancouver and Toronto is also responsible for giving homeowners a false sense of security when it comes to listing their home for private sale. Many FSBO sellers think that because there is a high demand for homes in their area, all they have to do is list their home and it will sell.
Many are mistaken.
According to the latest housing report from the Canadian Real Estate Association (CREA), “National sales and price trends continue to be heavily influenced by a handful of places in Ontario and British Columbia and mask significant variations in local housing market trends and conditions across Canada. All real estate is local, and realtors remain your best source for information about sales, listing and price trends where you live or might like to in the future.”
As the CREA states, realtors are privy to a wide range of information and housing stats that the average home buyer or seller are not usually exposed to.
Famed firefighter and American inventor Red Adair once famously quipped, “If you think it’s expensive to hire a professional to do the job, wait until you hire an amateur.”
Adair might as well have been referring to the amateur home sellers, who think paying a realtor is a frivolous expense.
When asked, a majority of private sellers admit to having opted out of hiring a realtor due to the cost involved. But, with the average realtor earning a 5% commission on housing sales, are they really an over-priced commodity?
Although Do-It-Yourself television shows make selling a home look effortless and easy, once you remove the magic of television and the clever editing, you begin to see the abundance of time, effort and skill required to sell a home successfully.
For private sellers (For Sale By Owners) who more than likely have a full-time job, the burden of selling their home themselves becomes evident early on.
Part of the exclusive knowledge a realtor possess relates to local housing trends in various areas. As Guelph-based real estate broker Ria Plas points out on her website, “With knowledge and training in marketing strategy, negotiation tactics, and the workings of the current real estate market, a realtor will be able to guide you through the steps of the home-selling process and be able to explain exactly what to expect.”
Realtors are also able to inform buyers and sellers about their legal rights and responsibilities, as well as discuss financing options.
Larry Weltman at AccessEasyFunds, a Canadian commission advance company, speaks with realtors daily and understands the valuable service they provide their clients.
“I think most people underestimate the amount of emotion that can be stirred up during the buying and selling process, which, in turn, can make negotiations difficult, if not impossible,” Weltman said. “Realtors act as a buffer between parties before and after the transaction, which is very important.”
Weltman, who works with realtors across the country to secure advances on their commissions, pointed out that the 5% commission realtors bring in per sale is well worth it in terms of the amount of service and access they provide.
“A good realtor knows who to market the property to and how to get top dollar, which essentially means they pay for themselves,” Weltman said.
At the end of the day, buying a home is the largest purchase and investment most people will make.
Failing to secure the guidance of a professional can not only be foolhardy, it can cost money.
Read the full post in Toronto Sun
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