Real Estate Talk: Rewards and
risks of selling on your own

In response to the Financial Post article “How to sell without a broker”

By Joseph Marovitch

July 28, 2021

In a recent Financial Post article written by Clayton Jarvis and published July 27, 2021, Mr. Jarvis stated reasons a seller would want to sell residential property without a broker, which is possible. However, after examining the article, there are statements I decided to clarify so those considering selling on their own are aware of the rewards and risks.

In the article, the following is stated:
“Not everyone feels paying 5% to 7% of their home’s value to an agent is a worthwhile investment, especially if it means forking over $60,000 or $70,000 – an easy thing to do if you’re selling a home for over $1 million. For these homeowners, selling without the use of an agent’s services is a logical alternative.”

The average residential city commission in Quebec being “forked over” is 5%, divided between brokers, agencies and government. It is also worthwhile to note that brokers pay expenses upfront whether they sell a property by the contract’s expiry date or not.

… after examining the article, there are statements I decided to clarify so those considering selling on their own are aware of the rewards and risks.

“Selling a home privately is something thousands of Canadians do every year. It’s not for everybody, but it’s not exactly brain surgery, either.”

Do you perform brain surgery on yourself too? Professional brokers are experienced and have expertise in contract law, property evaluation, marketing, contact base, conflict resolution, bylaws, right of ways, infringements, property construction, mould issues, contamination, phase one reports… and the list goes on. This knowledge is used to keep the average seller out of trouble.

“You won’t need an agent to do most of their usual duties, but to get a home listed on Realtor.ca – a veritable must if you want to sell quickly – the listing must be made by a licensed real estate professional. Nobody without a license has access, but you’ll still have options when choosing who will help you get your listing in order.”

A broker’s marketing consists of Centris, agency national and international websites, the broker’s website, newsletters, ads, open houses, flyers, mailings. Marketing must be targeted to the right audience and buyers vetted.

“Once a listing has been made public, you essentially take the agent’s place. You organize showings, field questions and vet buyers. And when an offer comes in that you’re happy with, you bring a real estate lawyer into the process to ensure the sale is legal and to everyone’s satisfaction.”

Offers have conditions and deadlines and must be permissible within the real estate brokerage act. Measurements must be accurate, or the deal can be reversed after signing.

‘A broker’s marketing consists of Centris, agency national and international websites, the broker’s website, newsletters, ads, open houses, flyers, mailings. Marketing must be targeted to the right audience and buyers vetted.’

If there are title issues or infringements, resolutions must be acquired such as a repair or title insurance. Selling without a broker to navigate a minefield of possible issues is easy, as long as there are no hiccups.

“A private real estate transaction can be anything you want it to be. So long as your home sells for a price and in a timeframe you’re happy with, it doesn’t really matter if you mimic the methods of successful real estate agents or do something different when marketing your home.”

In Quebec, real estate brokerage is under the jurisdiction of the provincial government. Whether a seller is a broker or not, all actions fall under the real estate brokerage act. Therefore, a seller’s declaration is required, as well as an up-to-date certificate of location and accurate measurements. Property cannot be sold if there is an environmental contamination issue. One can sell as they choose privately, however, if there are issues the buyer is not happy with, there are several legal loopholes a buyer can invoke to litigate or reverse the sale should they choose to do so. A professional broker is aware of this and can safely navigate through all issues to solidify a sale.

“While third-party platforms can help you determine a good price for your home, you can also do the research yourself. Sold data from Canada’s local multiple listing services (MLS) is publicly available, so you have the option of seeking out properties similar to yours and pricing your home comparably.”

Centris does not provide sold and expired information to the public. The information can be found via research at the respective municipal city halls or by asking a broker. There are calculations to compare price by a property’s location, features, the number of bedrooms, bathrooms, garages, and by breaking the price down to price per square foot to accurately determine the sale price and then the asking price. Not as simple as this article states.

‘In Quebec, real estate brokerage is under the jurisdiction of the provincial government. Whether a seller is a broker or not, all actions fall under the real estate brokerage act.’

Another factor that can influence pricing is emotion and connection to the property. A professional can accurately calculate the price of a property devoid of emotion to obtain an accurate sale range. Most homeowners cannot, therefore they come up with a price that includes sentimental value. Buyers are not sentimental.

“Many sellers agree, thinking that paying 2% or 3% commission is still a bargain. But Mooney says these sellers need to ask buyer agents an important question: What services will you be providing me?”

A broker will provide accurate pricing, professional marketing, full exposure, resources for contractors, inspectors, surveyors, notaries, mortgage brokers, navigation through all issues between an accepted offer and signing, facilitation of inspectors, evaluators, surveyors, and mortgage brokers to ensure conditions and deadlines are met – knowledge, expertise, and experience.

“Sellers are completely empowered but I think organized real estate has them believing that in order to sell your house, you have to jump through certain hoops. That’s not true. If you’re selling your house to me, we could write a deal on a cocktail napkin.”

OACIQ documents are binding, legal contracts with terms and deadlines. Write an offer on a cocktail napkin and an issue arises, and you will find the napkin more useful to wipe your mouth. Commercial real estate transactions are not under the jurisdiction of the government and, yes, a cocktail napkin could be used, however, even in commercial, a notarized legal contract is advisable.

‘A professional can accurately calculate the price of a property devoid of emotion to obtain an accurate sale range. Most homeowners cannot, therefore they come up with a price that includes sentimental value. Buyers are not sentimental.’

“You don’t need a professional real estate agent to ensure your home gets a high-quality listing. You just need to hire the same professionals real estate agents do: photographers and possibly a home-staging company.”

A professional broker serves as a contractor and will let the seller know if they require a home stager or cosmetic repairs before listing. A broker will contract a photographer and direct them to accentuate certain features of the property, etc.

“When a listing is getting stale, the usual reason is a mistake in pricing and an unwillingness to shave off a few dollars to get buyers interested. In these cases, Mooney says it isn’t uncommon for agents to contact FSBO sellers and offer to step in and get their property sold.”

“But in more than a few cases, agents have simply relisted these properties at the same price only to wind up lowering them a week or two later. The home sells for less and the seller is on the hook for the agent’s commission.”

Professional brokers accurately price property backed by facts and research. Sellers do not always agree with brokers on the price. If a broker agrees to sell at a price that is too high because the owner insists, the broker lays out the risk and ways to determine after 30 to 45 days if the price is accurate or not. The broker provides a report indicating how many hits the Centris listing received, how many inquiries were received and how many offers were received.

Many Centris hits with few calls are a clear indication there is interest but not at the stated price. This is not “rocket science.”

‘OACIQ documents are binding, legal contracts with terms and deadlines. Write an offer on a cocktail napkin and an issue arises, and you will find the napkin more useful to wipe your mouth.’

“Buyers are going to be very concerned about the condition of your home – and whether you’re being upfront about it. One way to put their fears to rest is to arrange and pay for a home inspection yourself and make copies of the report available to anyone who views your home.”

If the home is inherited or a wreck and the seller never lived in it, it is a good idea to have a pre-inspection. If the house is your own, fill out the seller’s declaration to the best of your knowledge and do not perform a pre-inspection. Let the buyer see the home first, fall in love with the location and the house, then let the buyer perform an inspection. If the buyer’s inspection indicates issues but the buyer is already attached to the house, then it may be easier to negotiate post-inspection, if required.

“Trust yourself,” Mooney says. “It’s not rocket science.”

Nothing is rocket science if you are experienced at it and know what you are doing. It is also not rocket science as long as there are no hiccups.

“Then again, there are a lot of questionable real estate agents out there, including thousands of part-timers who have little to no experience in pricing a home or negotiating. An analysis of Toronto Real Estate Board data found almost 35% of the city’s agents had sold one property or less in 2017. If you get sloppy in picking an agent, you could easily wind up with someone who sold as many homes last year as you did: zero. Is that person worth 6% of your home’s value?”

Vet a broker, ask questions such as: How long have you been a broker? Where have you sold? What type of property have you sold? How many properties have you sold? Look for accurate knowledge and confidence in their answers.

Hint: If they negotiate their commission, they will probably negotiate the price of your house.

‘Nothing is rocket science if you are experienced at it and know what you are doing. It is also not rocket science as long as there are no hiccups.’

Brokers must be confident, knowledgeable, and tough but fair negotiators.

For further information on pricing, market strategy and the selling process leave your comments below or feel free to contact me. Should you have questions or comments, please refer to the comments section at the bottom of the page. As well, to view past articles, click here.

Next article: Pricing the property

State of the market

We are in the construction holiday period. This means contractors, builders, plumbers, and everyone associated with services required to prepare a property are probably camping at Tremblant. It also means anyone searching for a property this month is very serious. So, if you are on vacation, find a broker you trust, give them a key and wait for the good news. However, preparation for the September market is a good idea as well.

Have a great week and enjoy the summer!

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Other articles by Joseph Marovitch