Sell Your Edmonton Home

As a home owner you’ve probably considered selling your home yourself, instead of hiring a Realtor. In some cases home owners are successful selling on their own, but the statistics show that more often than not you are better off with professional help.

If you are going to go it on your own, here are some tips to help you out:

• Advertise where the buyers are looking (most buyers look on the MLS® System, which is a cooperative marketing program among members of the Canadian Real Estate Association). Think of when you were looking for your home – where did you look? Other than the MLS® System you may have looked in the newspaper, and you may have searched online on sites like Kijiji.ca and Craigslist.org.
• Be available – if you are able to show the home on short notice, day or night, week day or weekend, then you may not need access to something like the Keybox system REALTORS® use. Of course, you have to feel comfortable taking phone calls from strangers, and inviting them into your home.
• Assemble a team of professionals – if you’re marketing your home yourself, you’re still going to need help with other aspects of the sale. A competent real estate lawyer can help you with the closing of the sale, and may also assist you with completing the purchase contract – note that many lawyers charge a higher rate if a REALTOR® is not involved, since the lawyer ends up doing a lot more work than they would otherwise. Most lawyers will also require that you sign a waiver, as they are not going to take any responsibility for any mistakes you’ve made. A surveyor will be required to complete a real property report (unless you are selling a condo) if you have made any changes to the exterior of your home, such as adding or changing a deck, shed, or hot tub. If you haven’t made any changes then your existing RPR will probably suffice depending on the buyer, their lawyer and their lender. A mortgage broker will be required to qualify any buyers interested in your home, it may be helpful to have one ahead of time.
• Be prepared to work with buyer’s agents – about 95% of buyers today are represented by a buyer’s agent, so there is a very good chance you’ll end up negotiating with an experienced negotiator, and paying their fee. If you refuse to work with buyer’s agents you’re only going to be able to deal with about 5% of the buyers.
• Be skeptical – many buyers looking at private sales are looking for a bargain, or an unaware seller. Be skeptical of verbal offers, and offers that include “creative” financing options such as mortgage assumptions or vendor take back loans. Also know that as of June 23, 2008 all REALTORS® are required to verify that the parties to a transaction are not involved in terrorism or money laundering through FINTRAC – as a private seller you could become a victim in a money laundering scheme or mortgage fraud since this is only required if a REALTOR® is involved.

Lets compare the costs of selling on your own and hiring an agent for a $400,000 home.

The “FSBO Discount” – The first thing you’ll hear from marketing companies that assist private sellers, is that you should drop the asking price of your home by the amount you’d pay in commissions, in order to be more competitive in the market place. So right off the bat, you have to lower your asking price.

Up front costs - listing with a private sales marketing company will run $500-$1500, depending on the marketing options you choose, and you’ll have other costs for newspaper ads and the like.

Negotiating/Experience/Knowledge – this is very hard to estimate, but the national survey of home buyers and sellers shows that homes sold privately sell on average 16% lower than homes sold with a professional, which can mean as much as $64,000 less. Personal experience tells us it’s more likely to be between 5 and 10%. For argument’s sake, lets say the difference is only 5% which is $20000.

Buyer’s Agent Fee - In many cases (96% of the time according to land titles studies) the buyer is represented by an agent, and the seller willingly pays a commission to have the buyer professionally represented. Lets say the buyer’s agent agrees to a rate of 2.5% on $100,000 and 1% on the balance, which is less than many buyer’s agents will charge. This lower amount equals $6325 including GST.

Your time is valuable too…Time spent marketing, planning and preparing, taking phone calls and arranging showings (average home needs 11-22 showings to sell). A showing takes 30-45 minutes. Valuing time at only minimum wage, your time cost would be a minimum of $880.

Our Fees: For a home in this price range, Coldwell Banker Johnston’s ultimate service marketing fee (our top tier plan) is is 6% of the first $100,000 and 4% of the balance (including paying the buyer’s agent 3.5% of the first $100,000 and 1.5% of the balance).

If you sell your home privately, how much are you really saving? Maybe you’re not saving anything at all…

A private sale can not only easily cost you more money, and take up much more time than selling with a professional, but it has risks as well. You are not covered for errors and omissions, and face the risk of showing unqualified buyers your home and everything in it. Over 80% of private sellers up listing with a professional. Save your money and time and contact us today.

–>Next…Selecting a REALTOR®