Is 25% of Real Estate in Canada Really Sold Privately??

There was a post here recently by a FSBO company blogger that claimed that to be a fact.

You have to ask yourself is it all hype to promote the FSBO services offered?

In reading the post I noticed that the poster claimed that no real estate agents are involved when you purchase from a builder. Hang on there just a minute if these sales are included in the 25%  then the 25% just suddenly took a real kick in the seat.

Interesting that he/she says he/she is a former real estate broker and yet his/her information about how new homes are sold is not correct so I can only surmise that he/she never personally sold new homes.

First builders are a very sophisticated group of vendors, with huge marketing budgets that the ordinary home owner just does not have. They are selling many, sometimes hundreds of homes from their web sites and advertising. They effectively have their own private co-operative listing system with properties and sales offices that stretch across the GTA and beyond. they have the wherewithal to get the buyer to come to them on their terms. What private for sale by owner has that kind of reach or budget?

I also am a former real estate broker and during my time as an agent I sold many new homes both as a licensed real estate agent, and as a broker. I also worked direct for a Major Builder who shortly after I left opened their own real estate company and hired professional licensed real estate people to handle their new homes.

Just because a builder does not put his properties on MLS does not mean they are being sold privately the correct word is exclusively and yes some properties are still listed exclusively but for those who want maximum exposure MLS is still the best way for most residential resale properties. Do all Builders list their homes , no but many do and even more do when they get down to a few at the end of a project. Now ask yourself why would they do that even with their huge marketing ability? Perhaps Because they know it works!

Can you really save $10,000, $20,000 and even more in fees as the poster claims. Perhaps, but lets look at a home that is located in a subdivision of homes with several similar homes on the market. Lets assume similar homes have sold for $400,000 and they were listed at 5%, a common listing commission in a good market. If the home sells for $400,000 the Commission or fees would be $20,000.

Now put yourself in the shoes of todays buyer. They have access to all the same information you had, they have done their homework they know all of the above and they know you are expecting to save the fees but so are they.

They also know you do not have the marketing strength behind you that the other homes have so they are potentially in a great position to haggle over the price, offering much less than they would on other homes. Will you save some of the fees, possibly. Will you save them all, not likely.

If they are truly sophisticated buyers they may put conditions in the offer that seem Ok but literally tie your property up for months and in the end they do not complete the transaction as their conditions were not met.

What you would expect the real estate professional to do is NOW YOUR JOB.

The post also says “you have to step into the shoes of an agent” in so doing you need to ask yourself if you have what it takes? Do you have the tools you will need to do that? Do you have the knowledge, the ability to negotiate, can you show the property at a moments notice or at the prospective purchasers convenience, do you have someone to answer your phone 24 hrs a day 7 days a week, can you show the prospective purchaser comparable properties.

I could go on but they most important point is; while you are at work, or away on vacation, or even out for the evening, that potential buyer whose call you did not answer is out with your neighbourhood real estate professional buying a home they were shown, that is comparable to yours because it was what they were looking for and the price negotiated was acceptable to them.

Everyone has the right to buy or sell in the manner they choose but for the widest possible exposure you need more than a sign on the lawn and a post on a blog or add in the newspaper.

You need the exposure that only the combined membership of your  local real estate board can give You through the various networks and interrelated web sites in addition to a co-operative listing system.

Many agents today not only put your property on their own web sites they put them on their company web sites, other agents web sites, and many other web sites that promote real estate for sale. A really good agent will ensure your property is exposed to the widest spectrum of potential buyers by putting your home on literally hundreds of web sites as well as the MLS web sites.

This post was contributed by Barrie Clulow