You Can Be Your Own Real Estate Agent and Pocket the Commission Yourself
Clayton on owner selling (From our archives)
2 Bed Apt, Den,
you own a home or condo and youve decided the time is right
to sell. Youve slapped a fresh coat of paint where needed
and cleared the clutter in the closets. Perhaps through the years
you have developed into a capable do-it-yourselfer
around your home, and as you debate about which real estate company
to contact you think to yourself: "Hey, I can sell it on
my own." Why go through the hassle of the for sale
by owner (FSBO) route? In a word: commission.
Although real estate agent commission can be negotiated on a case-by-case
basis, their typical share is around five percent of the selling
price. By selling your own home, it is conceivable that you could
save several thousands of dollars, enough for a new car, for a
luxurious around-the-world vacation, or, for the more practical
among us, a bundle of money to apply towards the next home.
In addition to the commission there are more expenses you can expect to
pay, collectively known as closing costs. These include lawyers
fees and disbursements and various government charges (including a land
transfer tax). These costs quickly add up, adversely affecting your bottom
If you choose to use an agent, there are some facts you should know. The
commission, which comes out of the sellers proceeds, is typically
split between the listing agent and the buyers agent based on terms
set by the listing agent. The commission covers expenses for marketing,
including classified ads, brochures or flyers, and listing fees, and also
the agents time, including performing open houses. A listing agent
charging a low commission may find it difficult to find a buyers
agent to look at his/her property if they will end up with less than their
forget to mention parking- sunsets- good neighbours -schools-
people want to know what it's like to live on your street
|Photo: © Sam North
Ads and listings that the agent puts out are more for promoting the home
to other agents. This kind of promotional clout is impossible for a FSBO
to match. However, two effective promotions that agents regularly use
and which a FSBO can effectively replicate (notwithstanding the time and
hassle factors)are the open house, and the delivery of flyers to
the local neighbourhood. The Multiple Listings Service (MLS), once a treasured
resource only available to agents, is now accessible to anyone via the
Internet, which, in a few short years, has revolutionized the way homes
are bought and sold. Although a FSBO cannot list in the MLS, there are
numerous other ways to market a home on the Net.
eBay.ca is one way for a FSBO to reach a large audience. Homes and properties
listed on eBay cannot be bid on; they are advertisements only, with contact
information at the end of the listing. For whatever reason, many of the
listings on eBay are for sprawling mansions selling for a million or more.
There are several FSBO websites within Canada. Some of them look very
amateurish and sometimes it isnt clear how recently they have been
updated. FSBO-BC.com offers a basic listing for C$39.00. This site has
existed for more than five years, and has been growing consistently, according
to Andrew, their spokesman. They are now getting repeat business. "People
are coming back and listing a second home with us."
'"Homeowners can expect to save money," states Andrew. However,
how much "depends on the value of the home and [the amount of money
spent on] advertising."
PropertyGuys.com is causing a stir in Eastern Canada with their slogan
of "0% commission." They are actually a FSBO listing service;
for a flat fee the seller receives a package which includes a marketing
plan and a listing on their site. They began in 1998 and have grown rapidly.
Based in Moncton, New Brunswick, they are franchising their concept and
gradually moving westward across the country.
Vancouver-based One Percent Realty Ltd., was formed in 1999 by Ian Bailey,
after 20 years experience in the industry. As their name suggests, they
charge a low commission with a couple of conditions: there is a five
thousand dollar minimum, and the seller pays all disbursements (including
MLS fees and other advertising).
For the completely confident do-it-yourselfer, you cant beat the
legal forms from Self-Counsel Press: "Contract of Purchase &
Sale for BC" can be yours for only C$6.95 at your local bookstore.
Of course, you will still need a lawyer to check the paperwork.
Put yourself in the shoes of a buyer. The only real motivation for a buyer
to seek out a FSBO home is the belief that they may find a bargain. They
will likely expect at least a 2-3% discount from the prevailing market
rates, thereby cutting into the sellers commission savings. As the
buyer typically does not pay the real estate agent any commission, they
will readily seek an agents assistance when shopping around for
Think carefully before you decide to list on your own. This is a transaction
most people wont be involved in more than a few times in their lives.
Can you afford to lose the leverage and connections that a listing agent
can bring in promoting your home? An agents marketing clout will
get the word out that much faster than if your house is listed on an obscure,
poorly-designed website. If your FSBO listing takes twice as long to sell,
will the cost savings really be worth it to you?
One Percent Realty
For Sale By Owner-BC
(Hackwriters does not endorse any of the above and always seek advice
before listing your home)
© Stewart Clayton November 2002 - who lives in New Westminster and
is currently writing a novel
Resilient Royal City
West, has suffered many snubs and as many disasters over the years
the Street and Onto the Wall
Artist Martin Budny shines at DV8
and Stormy Nights on the Gulf Islands
the darkness at nights.