***Welcome to the Globe and Mail readers! As a scoop, I can tell you that I have sold my house within 2 weeks at 330K. So I saved $18,810 in commission (5% commission rate + taxes). If you like this article, please subscribe to our RSS feed***
Last week, I announced that we were selling our house to move to a better place (hopefully!). We spent the previous week painting, buying frames and other decorative goodies and moved our furniture around to make our house look its best. I will write more about staging our own home later on (you probably guessed that I will be writing a few “selling your own property” articles in the upcoming weeks!). But today’s article is about all the reasons in the world I have to NOT use a real estate agent to sell my house.
I actually have no doubt that some real estate agents are pretty good at presenting and selling your property. The problem is how much they charge to do it! If I calculate a 5% commission fee (that is taxable!), I will end-up paying an agent around $18,000 to sell my property.
Since I will probably have to buy a second car once I move to my next property, the real estate agent commission represents more than what I will actually pay to buy my car! In the end, I really wonder what they can do that I can’t for this sum of money!
When I look at properties myself, I always have 2 websites that come to mind: mls.ca (which houses all the properties listed by real estate agents) and bytheowner.com (which is the most popular site for individual sellers). I don’t know if you have taken a look at the site but it is probably one of the most efficient and appealing real estate sites.
Searches are convenient and there are enough properties for sale that most people consider taking a look before visiting properties. Then, it comes down to the fees; $800 (tax included) to put a full time ad with 12 pictures (10 + 2 in extras). There is a guy that come to your place, take professional pictures and put the “for sale” sign in front of your property. $800 vs $18,000… any questions?
Another thing I don’t like about real estate agents is that you never negotiate directly with the buyer/seller. Therefore, when you have a quick question or you want to negotiate something, you always have to go through a third party. It’s even worst if you are buying with an agent and you are looking to buy a property that is being sold by another agent! The 2 agents are negotiating together (i.e. talking about how much commission they will both make) while the seller and the buyer don’t discuss anything.
I really like talking to people and getting their feelings about my property. Therefore, I find it easier to offer them a nice cup of coffee and negotiate at my kitchen table. As opposed to telling my agent that will tell the other agent that will tell his client that I would like to move earlier!
The key idea behind this article is simple; what does a real estate agent do that I can’t and justifies the huge commission I’ll give them? Do they provide legal advice? Very few and they are not responsible for what they say so you are better off checking with a lawyer/notary for real advice. Do they ensure a legal transaction? Hey! A 3 page contract that you can print from the internet… I don’t call it a legal transaction! Even the notary is not responsible if he makes a mistake so what is the real estate agent is responsible for? Do they negotiate for you? Well, for them, if you sell your house 300K vs 325K, it only makes a difference of $1,250 in their pocket (while they will still make 15,000$ at 300K). Do you really think they will encourage you to wait to get your price if they can do a quick sale? You are losing 25K, they are losing 1.25K… who’s the winner, who’s the loser?
I dealt with a real estate agent to sell my previous property and I was quite disappointed. It took 6 months and all my agent did was create confusion between the buyer and us as regarding the possession and moving dates… In the end, he cost me all the profit I was going to make on the house and I didn’t feel he did much more than take a picture and put it on a website (oh wait… I am doing that for $800!).
A few years ago, I helped my parents sell their house through bytheowner.ca. Back then, the system was less effective than today (less options, no professional pictures, no online tools, etc.). but even then, they were able to sell it within 2 months (and they had 2 buyers fighting for it!). The transaction went pretty smooth and my parents just kept a good $15,000 in their pocket instead of giving it to a third party!
What about you?
I would be curious to hear about your stories or even better, if a few real estate agents can tell me why I should pay them 18K to sell my house?
Image source: Kiz
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