Perils of Selling Your Own Home

I listened to a CBC Radio One discussion on November 3rd, 2010, between The Current host, Anna Maria Tremonti and Bernadette Lonnegan, who paid a flat-fee for a REALTOR® to list her Calgary home on the local MLS® in June.

Although Bernadette had previously sold a number of homes over the years and always with the help of a REALTOR®, this meant she would now be doing everything herself. This sales model type is most often referred to as a for-sale-by-owner or FSBO (pronounced fisbo).

This time her circumstances had changed so she decided not to pay, the REALTOR® fees and do it on her own, and because she was at home all of the time she didn’t think it would be “that” difficult.

“Well it was quite difficult”, she said, even though there was the extra exposure from MLS®, and two other units for sale in her complex that attracted better traffic.

Bernadette acknowledged that she was in a “Buyers Market” with lots of product available allowing Buyers to be choosy.

Host Anna Maria asked her to what degree having access to more data from the MLS® would have helped her. Bernadette said it would help to know what others had sold for, how much was being asked and how much prices had been dropped.

Bernadette conceded that, “REALTORS® know the business, they network and they can generate way more leads” than her as a homeowner.

Almost five months later, it was taken off the market.

After expressing her frustration, Bernadette was asked if she was thinking of getting an agent now and she responded, “I am indeed!”

She also expressed her concerns about some really “dodgy” characters that contacted her by email and by phone, who from her story, were obviously predators.

The host asked Bernadette if she was looking for some protection from an agent; “Yes, I am”, she answered with some assertion.

So here are three points from the discussion.

First, this case confirms that flat-fee (or “mere posting” as it is now called) service models were evidently available before any agreement negotiated between CREA and the Competition Bureau existed.

Second, the topic of MLS® data is a mute point. In BC for instance, the MLS® data does not include new home sales (or FSBO’s), accounting for approximately 30 per cent of sales, which deems the MLS® data by itself, meaningless.

A local company called LANDCOR, provides customized information and analysis to help the public answer virtually any question related to BC real estate. I subscribe to an online service they offer called, The Property Valuator, which provides an opinion of value based on all (not just MLS®) recent comparable sales, and all for under CDN$35.

LANDCOR’s real estate data originates from the Land Title Office, which is an online point of access for an appraiser, notary, etc. to data, including sales data.

Another source of real estate valuations is BC Assessment Authority.

So why would the significantly incomplete data collected by MLS® be under attack when there is clearly better information already available to the public?

Third, REALTORS® play an important role in protecting the best interests of clients by qualifying buyers, and the difficulty and frustration that Bernadette experienced going alone is only going to reinforce the value of using a good REALTOR®.

The majority of the Canadian public already gets this anyway, which is why they will continue to use a local REALTOR® to represent them.

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