For Sale by Owner

After almost 4 years of discussions and intense negotiations, Canada’s Competition Bureau reached an agreement with CREA (Canadian Real Estate Association) on September 30th, 2010. The change was made after the competition bureau argued that the old rules stifled competition and raised the price of selling a home. As a result, Canadian home owners can now choose which services they want from a real estate agent when selling their home, and to pay only for those selected services. For example, a home seller hires a real estate agent only to list his or her property on the MLS system and agrees to handle all other details of the transaction directly. For real estate agents, the new rules ensure that they will be able to offer the variety of services and prices that meet the needs of consumers.

According to an Environics poll sponsored by the TitlePlus only 11 per cent of Canadians are aware of the rule changes. Despite the low percentage, the poll also indicated 45 per cent of Canadians would consider bypassing realtors to sell privately with the advice of a real estate lawyer.

The Internet, cell phones and a more hands-on approach by consumers are changing the industry to be sure, but not every consumer is ready or able to sell their home and full realtor services will remain a viable option for many.

If the FSBO market is to become truly successful, a consolidation of websites would be nice. Potential home buyers currently have to visit too many sites to find all the listings and likely don’t even know all the websites to search. Paying to have your property listed on MLS would solve that problem and maximize your exposure. Remember no one works for nothing. If you want agents to show your listing you will have to offer a commission like any listing agent would. Your savings comes from paying one agent only.

And what do the banks have to say about the increase in private sales? I would like to hear from mortgage originators in other channels. Private sales are an area associated with mortgage fraud and some lenders will not lend against private sales. Competition and other market forces will influence bank policy to be sure. Already today one lender has emailed the mortgage broker channel and changed their policy on private sales. More documentation up front will be required to eliminate any foul play.