January 27, 2017:

5 Things To Consider If You’re Thinking About Selling Your Home Privately

Are you thinking about selling your home without the services of a professional Realtor®? Many home owners who choose to sell their property privately will naively enter the project thinking it’s not drastically different than selling equipment on Kijiji. Not so. Before you decide, there are a few things to consider:

Marketing & Professional Services

Consider the professional resources you’ll need to sell your home without a Realtor® and ensure you allot appropriate time to find, organize, work with, and fund them. You will need to take or, ideally, commission professional photos of your property. Don’t forget to source a sign for your yard. Remember that not all signage is created equal, so you will need to do some research with marketing and signage experts who can advise you on the best signage to attract the attention of potential buyers, be visible enough to see from a distance while driving by, and be able to withstand the weather.

Services like online marketing, print advertising, and inclusion on Realtor.ca will help you sell your home faster and for top dollar, so you will need to include graphic design or marketing firm fees in your budget. Remember that critical exposure on Realtor.ca, or the Simcoe or Toronto Real Estate Boards will be closed to you without engaging a broker. The Multiple Listing Service (MLS) is sponsored by the Canadian Real Estate Association and as such, only a Realtor® can post a listing. When you work with a Realtor®, any costs associated with this service are included in your Realtor’s® fee (which is zero unless your home sells). Selling privately, you have to source and pay a third party Broker to post your listing for you. Outside of an independent Broker, there are companies that will offer you various supports throughout the selling process, including MLS Realtor.ca, but be mindful, especially if cost was a primary reason you chose to sell privately, that these companies usually charge for a package of services.

Whether you’re talking about marketing services or signs, bear in mind that there will be no refunds. If your home doesn’t sell or receive the offer you’re looking for, you’ll be out the cost of hiring a support system, whereas engaging a real estate brokerage in the sale of your home will only cost you when your property sells.

Hidden Expenses

Theoretically, selling your home privately can help save you money by eliminating the commission you would normally pay a Realtor®, but if the buyer is working with a Realtor®, you likely won’t escape paying a commission, even with a private sale. The seller traditionally pays the commission of the buyer’s agent as well, so prepare to pay up to 2.5% of the final sale price. Offering anything less than the industry standard for commission may deter agents from presenting your home as an option to their clients, and thus affect the size of pool you’ll receive offers from. If you work with a Realtor®, the commission you pay covers all commission fees in addition to all marketing efforts to help you sell your home. When you sell privately, all expenses will come out of your pocket.

Finally, remember that legal fees can be higher when a home is sold privately as the lawyer may have to devote, and thus charge for, extra time and paperwork to sort out the conditions of the sale and advise in areas where a Realtor® normally would.

Industry Knowledge

If there’s any area worth investing in during the process of selling your home privately, it’s the appraisal of your home’s value. Paying a few hundred dollars for a professional appraisal can help establish, not only what your home is worth, but what it would sell for in the current market. Often, companies that offer a portfolio of services for private sellers will include help in the home appraisal process, but remember, nothing replaces a licensed professional when it comes to determining property value.

You’ll also want to devote some time to research common protocol that a Realtor® would intrinsically know when representing the sale of your home. For example, determining which items in your home are included and not included as part of the sale, otherwise known as “fixtures” and “chattel.” Generally, a fixture is anything that’s attached to the house to the point where its removal would damage the house or require repair, like a bathroom sink or lighting, whereas chattel is any tangible, moveable property, like a book shelf. If you, the seller, wish to keep easily removed items like a light fixture or hanging pot rack, these items must be explicitly excluded from the contract of purchase and sale. You may want to swap out your favourite fixtures for less expensive replacements before your home lists to ensure there’s no confusion. Appliances like your washer, dryer, fridge, and stove aren’t fixtures, but are often included in the sale for a price if the buyer wants them. Demystifying the difference between fixture and chattel, however, can be tricky. Is a hot tub a fixture or chattel? If the hot tub is built into a deck, does that change the answer? These are important distinctions to make before accepting an offer.

Managing the Sales Process

Remember that when you sell privately you will be responsible for all showings, phone calls, emails and other correspondence related to your listing. In this hot market, buyers will often want to book a showing at a moment’s notice, and the more responsive and flexible you are with booking those appointments, the better your chances are of receiving multiple offers. Where will the calls and communication be directed, who will be responding, logging, and following up on those communications, and how will you manage all this while working a full-time job and potentially managing a family and other responsibilities? Remember, you’ll be the main point of contact for any communication regarding your property, including questions, comments and concerns from interested buyers and their agents.

Negotiation

The final stage of the sales process that you’ll be responsible for is negotiating the final offer to purchase your home. Remember that Realtors® are often trained and certified in the art of negotiation, so you’ll want to decide on the areas you want to stay firm on ahead of time, and where you’re willing to negotiate. When a buyer knows you’re selling privately, they will often expect a discount on the list price as they know you’re saving on commission. Realtors® have experience in the art of negotiation, and The Faris Team has additional negotiation certification, so you will be facing some stiff competition at the bargaining table.

After factoring in the time, money and possible 2.5% commission awarded to the buyer’s agent, it’s worth an interview with a local Realtor® to compare if services they’ll manage on your behalf outweigh what you’ll save on commission

If you’re still undecided, The Faris Team would be happy to meet with you to show you how we go full out® for our clients, so you can make the best decision for your family.

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