The 4 Most Common Ways To Sell Your Property: Pros And Cons
If you’re a homeowner, you’re well aware that you have a number of different options for selling your Toronto home.
From self-selling on classified sites, to “full-service” real estate agent services, your options are virtually limitless.
But not all options are created equal.
I’ve seen time and time again with clients who have tried to “go it alone” with “budget” selling, more often than not, they get lost in the paperwork, price the home wrong, don’t stage the home, and make other mistakes that lead to massive headaches. This is not to say that it can never be done; instead, I point out that some of the ‘cheaper’ ways of selling real estate come with ‘hidden costs.’
The good news is, if you’re looking to sell your home, there is always a way to sell that fits into your budget. In this article I will explore 4 of the most common ways, and weigh the pros and cons of each.
Note: the advice in this section ALSO applies to any other popular classifieds site, including Craigslist, Kijiji, and others.
FSBO is one of the most popular ways to sell real estate when not using a listing agent. Offering sellers the opportunity to list their home in a matter of minutes and post it on MLS, it has become one of the most popular ways to sell Toronto homes.
The main pro of FSBO is the ability to list quickly and easily, without paying any agent’s fees.*
There are unfortunately a number of cons associated with selling on FSBO.
First off, you’re on your own when it comes to any associated services required for the sale–appraisals, legal services, inspections, etc. Where an agent could help you with this, you’ll be required to do it yourself if you hope to self-list your toronto home on FSBO.
Secondly, Navigating a strong seller’s market is something only experience can manage. I see a lot of homeowners leaving 10’s of thousands of dollars on the table.
Thirdly, FSBO gives you no access to accurate market research. Basically, you’re going to be basing your pricing on what other homeowners nearby seem to be selling their places for; but these prices may actually lag the final settled price by quite a bit. This could leave you asking much less than your home is actually worth.
Something these companies will not disclose is that you’ll still pay around 2.5% to a buyer agent. Realtors do show FSBO’s and generally have a contract with their client indicating fees to be paid. With lower commission realtor options available, how much are you really saving, if anything?
A mere posting on MLS
MLS is the industry-standard listing service. Virtually all real estate agents in Canada review MLS listings for buying and selling opportunities. This means if you post a listing on MLS, you may connect with a buyer’s agent and be able to sell your home that way.
The main advantage of selling on MLS is that it is relatively affordable and, unlike selling on FSBO, there is at least some interaction with a real estate professional. The buyer’s agent may be able to help you with finding a lawyer and other professionals to assist with the ‘paperwork’ of your transaction.
If you’re trying to sell your home, listing on MLS yourself can be a massive headache.
For one thing, the software is usually only used by real estate agents, and getting access to it yourself can prove challenging.
Secondly, if you list only on MLS, your listing will be seen mainly by buyer’s agents–meaning you will be negotiating with an experienced real estate agent who knows more about the market than you do. This is not a favorable position to be in. Instead, it is better to go into the sale with a seasoned agent by your side.
Flat Fee Brokerages with minimal cooperating brokerage commission
Flat fee brokerages are professional real estate sales organizations that represent you for a standard service fee. Unlike many real estate agents/brokers, their fee is set at a certain rate–usually a few hundred dollars–while the cooperating brokerage takes just a tiny percentage commission.
Affordability is the main advantage of these flat fee arrangement. Coming in at as little as $59 for a 3 month listing, this is certainly one of the most affordable ways to sell your home with the help of a broker.
The devil is in the details. Most of the time these flat-fee deals come with very little more than just an MLS listing (they may come with some costly mistakes, however!). Even with brokers who offer a little more than this, suffice it to say, the lack of financial incentive to do more, means you’ll probably wind up waiting longer and getting less.
Full service real estate agent with reduced fees
Working through a full service real estate agent with reduced fees is probably the best way to sell your home. This option gives you the best of both worlds: the reduced fees associated with flat fee brokerages, as well as the complete range of services you’d expect from a commissioned agent (photographs, staging, showings, listing, etc).
Full service real estate agents with reduced fees come with a number of advantages:
Complete range of service, comparable to that which all “5%” agents offer.
Help with showing and negotiating with potential buyers.
Putting up signs, preparing your home for viewings, and other logistical matters.
And much, much more.
Compared to almost every other way of selling a home, ‘reduced fee’ arrangements are more convenient, more affordable, and more economical. A few slight concerns may be mentioned for those who are unfamiliar with this new and innovative type of real estate arrangement:
Some agents in the industry charge less because they’re new and just want business
Depending on price point there may be a lack of motivation due to the reduced commission
Lacking advertising other than MLS
But overall, the jury is back with a unanimous decision:
Reduced fee full service agent representation is the way to go. Offering the best compromise between low commission and high value, this new way of doing real estate deals is the best option for sellers who are price conscious and value-savvy.
Now for my “plug”. Yes the word is out, I work for Royal LePage and I charge 1% + 2.5% (buyer agent fee) = 3.5% commission. I’ve been buying and selling properties for 10+ years and I know what works, what doesn’t, what’s needed and what isn’t. My strategy is based on getting Seller’s to list (who usually buy). Listings are leverage; the more listings you have the more potential buyers come your way and maybe they have a house to sell too. It’s not rocket science. It’s knowledge, experience & a little bit of an open mind.
If you’d like to learn more about myself and the services I provide please feel free to download my pre-listing package here; www.onepercentguys.ca/selling-process/