Wes Hoover – Real Estate Magazine

1. They charge upfront (in most cases thousands). Agents don’t.

When it comes down to it, listing with an agent shouldn’t cost you a cent. I know you probably read that a few times. Agents don’t charge upfront, we only charge when results are provided. This gives you an advantage in more than one way. On the other hand I have heard of individuals paying upwards of $2,000 upfront just for a sign and a spot on a website, only to end up having their house listed and sold by an agent.

Comment: Property Guys doesn’t have pricing on their site anymore. But when I last checked a few years ago, the full package with signs and all was $2,800. Whether or not you sell.

2. They aren’t held to any code of ethics.

Real estate agents across Canada are held to a strict code of ethics by CREA. They take the liability if something goes wrong. They are also held to higher standards in advertising and they have duties to you as a client.

Comment: FSBO companies – and sellers in general – do not have the same regulation we do. No specific laws, licensing bodies or associations to report to. Same as buying something off Kijiji.

3. Just because you’re a real estate professional does not mean you’re rich or overpaid.

This has been the fuel for many slanderous ad campaigns released by popular for sale by owner websites over the years. The truth of the matter is, if it was that easy and they got paid a “small fortune” to sell a house, everyone would get into the business. Selling homes is hard work. Agents often find themselves working for free and hoping to receive a commission.

Consider this situation: A buyer has his agent show him 30 houses over the course a month. The agent spends hours of his time to assist the buyer. The buyer decides not to buy. The agent has worked for free and lost money on expenses. This is a common situation.

Comment: Hey, I work for my pay, same as you do. I don’t slag your job, don’t insult mine.

4. They can’t put your home on the MLS system.

This system was built by Realtors for Realtors. No one is allowed to list a property on it unless they have a license to trade in real estate. These websites will just refer you to an agent (how ironic), often one from the other side of the country, to put your home on the MLS and nothing else. In most cases the listing won’t even be on your local MLS board, making it sometimes hard to find.

Comment: I don’t even want to get into THAT argument. MLS is our system, we built it. We own it. It is OURS. Forcing us to list private sales is the same as you taking your used to car to the local dealership and expecting them to put it on their lot. That is THEIR lot, they built it, they paid for it.

5. They actually petition agents to sell their houses.

After years of bashing the profession, certain for sale by owner websites are now calling on agents to come to their rescue, so they can take credit for selling homes. Tell me another business model where you ask your competition to do the work for you. This is really an admission of one thing – serious buyers go to an agent. Why? Because it will cost you nothing to buy through an agent.

Comment: I get emails every week from private sellers, trying to get me to show their properties. If they want me to see it, put it on MLS. And you do that by hiring another real estate agent. And if they feel the need to reach out to me, how much interest are they getting in their property? I have actually seen some of them wind up on MLS later – and sell.

6. They don’t have a real estate license.

This is something a lot of people do not realize. These so called “private sale” websites are just that. They are not licensed to trade in real estate or to give you real estate advice. They can’t even advise you on how to price your property because doing this would fall under an agency relationship and would be considered trading in real estate. That requires a license. These parameters are set in place to protect you, the consumer.

Comment: Your brother-in-law could do your brakes for you… or you could go to a licensed mechanic. Which would you prefer? Who gives better medical advice, your doctor or Google? I don’t change my car’s oil for a reason, same as I don’t do my own dental work. There are professionals who know better.

7. You pay them so you can do all the work.

Since these companies are not licensed to trade in real estate they are not permitted to represent you in a real estate transaction. This means they can’t answer buyer inquiries for you, show your home, host open houses, handle paper work, mediate negotiations, advise you on market conditions… the list goes on and on.

Comment: No, you only pay them to get on their website and get a sign. And you pay them $2,800 for that. Even if you don’t sell. You have to answer all calls and emails, do all showings, do paperwork (if you can find proper forms and make it actually legal), negotiate, all that fun stuff. Personally, I am not a huge fan of private sales and tend to avoid them. I am not comfortable dealing with someone with no training or knowledge of the process. Private sellers don’t know market value, legal issues, etc. I do not want to end up in the middle of a lawsuit because of what someone didn’t know or did wrong. Nor do I want my clients involved in a mess like that!

8. Privates sales carry a stigma and uncertainties that make buyers uncomfortable.

Ever gone to view a private sale as a buyer? Then you know it can be extremely uncomfortable and limiting to view someone’s house with them in it. It can be even more uncomfortable to negotiate with them. On top of all this, private sales beg the question, why didn’t they use an agent? Is there something wrong with the house? If they are trying to cut costs now, did they cut costs/corners with repairs?

Comment: Or if they are trying to keep every penny for themselves, how high is the price? Is it accurate? Will they negotiate or be hard-headed? Or do they just think they know better? Not someone I want to deal with… do you?

9. Agents don’t hate for sale by owners.

These companies would have you believe that agents think FSBOs are ignorant. This isn’t the case. We get why you would want to go this route. It can be done, but just because you can do something doesn’t mean you should. Like many DIY projects you are putting yourself at risk. In this case you are taking a risk with the biggest investment of your life. It will not be an easy process.

Comment: I don’t hate them, I am just leary of them. So much can go wrong – and they have no accountability. Like buying a used car privately or from a dealer. You have recourse through a dealer, none with the private sale.

In the end, in today’s buyers’ markets you need an agent who will work tirelessly for you to get your home noticed above the thousands of others on the market.  Just remember that limited service will always equal limited results and if it seems too good to be true, it is more times than not.

Comment: I also want to add #10 to this list. They don’t publish any stats. I would love to know what percentage of their listings sell. And for what percent of list? And in how many days? Give the same stats as TREB if you are so good. And maybe break down the sale prices by condo/detached/semi/town so we can compare to properties sold by agents – let’s see if their sellers get the same prices as we do. But none of them give any stats at all – what are they hiding? If the numbers were so good, you would think they would shout them from the roof tops.

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Contact Laurin Jeffrey for more information – 416-388-1960

Laurin Jeffrey is a Toronto real estate agent with Century 21 Regal Realty.
He did not write these articles, he just reproduces them here for people who
are interested in Toronto real estate. He does not work for any builders.
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