What are the pros and cons of working with a real estate agent instead of selling my home myself?
For people with a DIY spirit, it can be tempting to handle the sale of your home on your own. This is known as “for sale by owner,” often abbreviated as FSBO — pronounced “fizbo.”
Keep in mind that selling a home can take a lot of time and effort. You’ll be responsible for everything, including setting the listing price, advertising the property, making yourself available to let interested buyers view the property, reviewing offers, negotiating terms and managing the paperwork once an agreement has been reached.
The upside is that you will save the money that would have been paid to a salesperson to handle these tasks for you. But consider what your time is worth, and whether you have the knowledge and expertise to handle this type of transaction.
If you’re thinking about working with a real estate rep, know that you don’t have to make an “all or nothing” choice about the services you’ll need. Brokerages can offer a wide variety of service levels, with varying fees.Whatever path you choose to take, it is a good idea to hire a real estate lawyer to advise and assist you with preparing for and closing your real estate transaction.
Note that a home seller typically covers both agents’ commissions for the transaction. As a seller in a FSBO, you can choose whether you will agree to pay the commission to the buyer’s brokerage. If you don’t, the buyer will consider that expense when they decide whether to put in an offer.
Also know that there are consumer protection benefits when you work with a registered real estate salesperson — the three pillars: knowledge, professional standards and insurance.
Knowledge means that a salesperson is trained to help you navigate the selling process, including determining the best way to market and show your home to buyers, handling paperwork, and negotiating on price and terms.
Salespeople in Ontario must also uphold professional standards under the legislation that RECO enforces. These standards require them to treat everyone involved in a transaction with fairness, honesty and integrity, and to follow rules and regulations that are in place to protect consumers. In the rare instance that something goes wrong, you can file a complaint with RECO about your representative or the brokerage. RECO will investigate the complaint and take appropriate steps to hold them accountable for their actions.
The final pillar of protection is insurance, which protects consumers in two ways. First, deposit insurance provides buyers with peace of mind knowing that their deposit payment will be insured against fraud, insolvency or misappropriation by a brokerage. Second, real estate salespersons and brokers carry errors and omissions insurance to pay for damages and legal costs that arise from mistakes they may make in providing services relating to a real estate transaction.
Ultimately, it’s a personal choice whether to sell your home on your own, engage a full service brokerage, or find a middle ground where a salesperson helps you with certain aspects of the sale.
Joseph Richer is Registrar of the Real Estate Council of Ontario (RECO). He is in charge of the administration and enforcement of all rules that govern real estate professionals in Ontario. You can find more tips at reco.on.ca, follow on Twitter @RECOhelps or on YouTube at http://www.youtube.com/RECOhelps.