- advertisement -
 

Should you use a real estate agent?

Only a practised Frisbee thrower has any hope of predicting exactly where her spinning plastic missile will land. Frisbees have a devious knack for curving away from the waiting crowd and settling on a dusty patch of ground.

The same applies to "fizbos," more properly spelled FSBOs -- the acronym for properties For Sale By Owner.

Think about it: no real estate agent as the middleman between you and the buyer. No hefty commission sucked out of your pocket somewhere between pounding the sign into the lawn and watching the ink dry on the contract. It's a tempting prospect.

So tempting, in fact, that an estimated 13 percent of all sellers go the FSBO route. Those who score get to decide how to spend the tens of thousands of dollars they save in commissions. And those whose deals curve away and hit dust rather than pay dirt can always return to the comfort of a real estate agent.

- advertisement -
- advertisement -

Tonia Hradecky, of Port Moody, B.C., expects to save $11,000 by selling her $264,000 two-bedroom condominium herself. A veteran of four real-estate transactions through agents, she feels she has earned her wings to fly FSBO and make it work. The reward is substantial -- after all, the average real estate agent's commission is, as she points out, seven percent on the first $100,000 and 2.5 percent thereafter.

"But I wouldn't recommend it for a first-time seller," she says. "You have to have some experience and be willing to do a lot of research before you put your home on the market."

Decide on a reasonable asking price
The first step Hradecky had to take was figuring out a savvy asking price. Whereas many FSBOs pay an appraiser about $300 for this service (which has the added benefit of putting potential buyers' minds at ease), Hradecky was lucky in having several comparable units for sale in her building. So, coming up with a reasonable market price wasn't difficult.

Next, she had to decide where to place ads: in newspapers, on the Internet or on cable television. Fees for FSBO ads range from $80 to $1,000 per listing and come with extras ranging from For Sale signs to Internet profiles, photos, marketing advice and forms for closing a deal. So far, Hradecky says newspapers have delivered the best results.

Next, she had to turn a deaf ear to the flood of calls she received from agents who were after the listing. "They were very aggressive, claiming they could meet my asking price, yet they were reluctant to subtract the projected $10,000 savings off their commissions," she muses.

Are you a negotiator?
When offers start coming in, Hradecky's next task will be to get comfortable with hardball negotiating. Not everyone is mentally prepared to handle a shrewd bargainer. And should she accept an offer, both she and the buyer will need to hire real estate lawyers to check over the contract.

One of the downsides to selling your home yourself is the amount of time it takes. Unlike buyers referred to her by a real estate agent, many who come looking at Hradecky's place will not have been pre-approved by a bank, which means she'll meet a lot of what she calls "looky-lous," who are more interested in window shopping than putting in an offer.

"It's time consuming," she admits. "But I'll try the market, and if I'm not successful, I'll go with an agent."

One thing in Hradecky's favour is the current hot seller's market. When Deb and Pat Moran recently placed an ad in their local newspaper for their three-bedroom, ranch-style home in Ocean Park, B.C., they found themselves with three offers on the table within days, all higher than their asking price of $375,000.

"My wife found the wheeling and dealing stressful, but in the end, we went with the highest offer," says Pat Moran, a communications consultant who does a lot of negotiating as part of his work. By selling their home themselves, they saved $40,000 in commissions.

Agents can provide expertise
If FSBOs are more likely to thrive in a hot market, agent-led transactions have some advantages in any climate.

Victoria Bell, a Vancouver real estate agent with 25 years' experience, says she has nothing against FSBOs, but "I just don't think they can expect to get the top dollar. Selling a house is stressful. Negotiating is stressful. A professional is trained to take that stress away from home buyers and sellers," she says.

FSBO sellers who don't live in or near their property will suffer the inconvenience and expense of travel, while those with demanding careers or busy family schedules often find they simply don't have the time to field incoming offers. Even those who think negotiating will be fun can be overwhelmed when multiple offers come in.

So, FSBOs aren't for everyone. But they are certainly tempting. So what should you do? Before you erect your For Sale By Owner sign, ask yourself if you are willing to dedicate the time and energy to make sure you receive the top dollar for your home. If that question raises serious doubts, phone a real estate agent, and while he's holding your open houses, go enjoy a massage or golf game.

Pam Withers is a business journalist, business-book editor
and author of a best-selling teen novel.

-- Posted: Sept. 20, 2004
top of page
Home Buyers's Guide
B Y  T H E  N U M B E R S
  9 questions to ask when applying for a mortgage
  10 dos and don'ts for getting an ideal mortgage
  20 things that can alter the value of your home
  Top 5 home-buying mistakes
C A L C U L A T O R S
  Estimate your FICO score
  Mortgage calculator
  How much house can you afford?
  Get a biweekly mortgage payment plan

- advertisement -